Timo Tatar, Deputy Secretary General for Energy, Ministry of Economic Affairs and Communications, Estonia recently spoke at Global Transmission’s virtual conference on Baltic Offshore Wind Transmission. He presented a short overview of anticipated tenders, the regulatory framework and the involvement of local and foreign stakeholders in Baltic offshore wind developments, providing insight into potential business opportunities and market conditions especially in Estonia. Key highlights from his address…

There exists a huge potential in the Baltic sea for offshore wind power development. Various studies have tried to assess the potential, with the common view that there exist significant prospects for this technology. The potential can help us in transitioning to greener sources of energy. As of 2020, only 2.5 GW of this potential has been utilised, which makes up a very small part. As per the various studies, the offshore deployment in the Baltic sea can be expected to increase ten-fold within the next 30 years. In order to achieve a quick acceleration of offshore wind deployment, we have to act now and we have to act wisely. We must carefully plan the sequence of actions to be undertaken.

The Baltic sea is surrounded by countries with ambitious carbon neutrality targets and climate action goals. Estonia is not far behind, with a target of 70 per cent carbon dioxide reduction by the year 2030. The country also targets to achieve climate neutrality by 2050. To achieve climate neutrality and renewable energy targets, we have to focus on offshore development in addition to onshore projects.

Baltic Sea Offshore Grid

The Baltic Sea offshore wind power development starts with a common vision which includes cross-border cooperation. Capital costs that may be too high in the case of one country can be brought down by the involvement of many countries. Collective action makes energy transition faster and cheaper for all nations. There is also a need for a stronger and more connected power system. Countries need to work together and develop cross-border connections across wind development areas. There are many benefits of this approach, in addition to achieving lower costs. Meshed or hybrid offshore grid combines power generation and transmission which is essential for cost reductions and efficiency in the future, ensuring that wind power in the Baltic Sea is transported to end-users in an efficient and cost-effective way. If we develop offshore grids properly, we will also be able to make sure that the generated electricity reaches the area where the deficit is higher, and not simply to the closest point onshore. This will also help manage the massive flow of electricity near the power sources which would need further investment.

If we plan it well, we can solve this problem at once and avoid expensive repairs later. Thus, while talking about offshore wind power development in the Baltic Sea, we also have to talk about developing the offshore grid. That is the most affordable way for our society to reach the common goal. The ministries need to come together to plan what is the right sequence of investments, where to start and what the cooperation should look like.

The scenario in Estonia

Although Estonia is a small country, it has a considerable sea territory. About 10 per cent of the Baltic Sea comes under Estonian territory. Thus, Estonia should cooperate with other countries which do not have ample territory in the sea. Further, the offshore potential in Estonia exceeds its domestic demand which justifies the open-door approach of the country. This is also a good chance for land-locked countries to take part in this potential in a cost-effective manner. The marine planning is nearly finished in Estonia. There are a lot of existing development areas and we are also planning new territories for offshore deployment. The potential of this could be 7 GW or higher. However, all this will not be deployed at once.

EE-LV joint hybrid project

We are not only talking the talk, but are also walking the walk. Together with our neighbour Latvia, we have initiated a pilot cross-border hybrid project concept in Baltic Sea. Estonian and Latvian ministries have agreed to work together to develop an area suitable for a wind power plant with an expected capacity in the range of 700-1,000 MW. This would be expected to generate about 3 TWh. The ministries are also working to develop a clear perspective of cross-border connection which is also available for other potential developments in the area. The final location of the hybrid project will be selected after the feasibility study. There will also be a need to conduct necessary analysis for offshore wind farm development and related grid connection licences. Thus, we will be offering a pre-cooked product to market participants where all the usual risks are taken care of.

If we have a clear perspective of the grid connection and about how much and where to build; then we will be very near to the point offshore wind becomes market ready without additional subsidies.  However, if the subsidies are required, we will be willing to provide that as well. Costs and benefits of the project will be shared equally (50-50 principle) between Estonia and Latvia. Further, the auction for finding the operator is planned to be open to market participants in 2026. We are expecting the park to be operational by 2030.


There are several obstacles that need to be dealt with right now. Most of these are quite universal in nature. Key among these is the conflict of different policy priorities. The challenge is how to combine the climate, energy and environmental priorities that the countries have agreed upon on the European Union level. However, compromises are possible and should be sought. There are also multi-uses of the sea which also include shipping and functioning of fisheries. There is also the Not-in-my-backyard effect to consider.

Further, offshore wind supply chain needs to be developed in a cost-effective manner. In building supply chains, we must also consider how the different regions can benefit from it.

Since the segment is rather new and we are doing this for the first time, there is also the challenge of lack of knowledge and experience. However, the countries that started before us have been eager and welcoming to share their experience, which is a good thing for us. This is the essence of working together; to not only share costs and benefits, but to also share experiences.

The offshore energy strategy introduced by the European Commission in November shares the same vision to make best use of the offshore potential. Member states must thus work together to bring the costs down and share the benefits which offshore wind power presents.