Energy, Estonia, EU – Baltic States, Good for Business, Latvia, Legislation

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This is the first such agreement in the region, pioneering the concept of a hybrid offshore grid connecting different markets, and enabling the development of suitable offshore production sites, the Estonian Ministry of Economic Affairs and Communication said in a press release.

"This kind of cooperation is unique in the world, as two countries will combine their will and knowledge to improve the security of supply while increasing renewable energy production. It's equally important that cross-border cooperation makes it possible to apply for European Union co-funding for the construction of the grid," the Estonian minister said.

This week, the European Commission introduced a plan to establish even more ambitious goals for 2030 greenhouse gas emissions reductions. Estonia and Latvia share the vision that such cooperation in offshore wind power is an excellent solution for moving towards higher goals.

The two ministers said they believe that the project could be the first of many offshore wind flagships under the BEMIP regional cooperation. The forthcoming European Commission's Off-shore Renewable Energy Strategy should pave the way for such projects to materialize by facilitating sufficient financing.

The signing of the memorandum is the first step in conducting a cost-benefit analysis of the project. The developer of the wind farm is to be found by means of a public competition. 

According to Aas, both Estonia and the EU have set new very ambitious goals for reducing carbon emissions, and Estonia and Latvia share the vision whereby offshore wind farms are an excellent solution for achieving these goals in a cost-effective manner.

"When we talk about the production of hydrogen in the more distant future, a prerequisite for it is the availability of environment-friendly electricity," the Estonian minister added.

He said the joint project enables also to attract other investments in offshore wind farms in the region and the infrastructure to be established makes connecting to the grid more affordable for other players. This is also a good opportunity for knowledge transfer from North-Sea Energy Cooperation. 

In addition to the joint Estonian-Latvian project, three more wind farms are being developed in Estonian waters. 

The size of the planned offshore wind farm, according to the memorandum of understanding, is up to 1,000 megawatts, which equals up to 20% of the power consumption of the two countries. The project will also serve as a proof of concept for a hybrid asset consisting of dual use transmission network and an offshore wind park.

After the states have conducted the necessary studies like environmental impact assessment, they will carry out an auction for the superficies license. Estonia and Latvia will split the costs and income of the project equally.