The European Commission has approved a €2.6bn Estonian scheme to support the development of offshore wind energy in the country. The measure will support the construction and operation of offshore wind farms for electricity production in the areas determined by the Estonian Maritime Spatial Plan.
The aid will be granted on the basis of a transparent and non-discriminatory bidding process before 31 December 2025. It will take the form of a variable payment under two-way contracts for difference (CfD) concluded for a period of 20 years. The aid amount will be calculated by comparing a strike price, determined in the tender offer of the selected beneficiary, to the market price for electricity. When the strike price exceeds the reference market price, the difference is paid by the Estonian State to the beneficiary on top of the market price, with a maximum amount of aid granted capped at €65/MWh. Conversely, when the reference market price exceeds the strike price, the beneficiary will have to pay the difference to the Estonian authorities. There will be a limitation on the annual volume supported for a given year (2 TWh/year).
The scheme was approved under the EU’s State aid Temporary Crisis and Transition Framework adopted by the Commission in March 2023.
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