AgriPolicy

Enlargement Network for Agripolicy Analysis

ANALYSIS OF
RENEWABLE ENERGY AND ITS IMPACT ON RURAL
DEVELOPMENT
IN ESTONIA
NOVEMBER 2009

Work Package
Deliverable
Coordinators
Author

WP2: Studies
D2.2 Study 2
Axel Wolz, Klaus Reinsberg, Gertrud Buchenrieder (IAMO)
MATI SEPP, CZ TEAM (TWINING PARTNER), GERTRUD
BUCHENRIEDER

AgriPolicy

ACKNOWLEDGEMENT
This report forms part of the deliverables from a project called "AgriPolicy" which has been
awarded financial support by the European Commission under the 7th Framework
Programme.
The project aims to establish a network of experts involved in agricultural policy analysis and
rural development in the 12 New Member States and in 8 Candidate and Potential Candidate
Countries. More information on the project can be found at www.agripolicy.net.

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CONTENT

Acronyms ................................................................................................................................... 4
Tables and Charts ....................................................................................................................... 5
1 Introduction ........................................................................................................................ 6
2 Overview of the use and relevance of renewable energies ................................................ 7
2.1 Relevance of renewable energies in national energy supply...................................... 7
2.1.1
Production and share in total electricity supply ................................................. 8
2.1.2
Production and share in national transport ....................................................... 11
2.1.3
RE production and share in national heating consumption.............................. 12
2.2 Sources of renewable energies: implications for farms ........................................... 14
2.2.1
Wood as a object of RE.................................................................................... 14
2.2.2
Other energy sources: wind energy, solar energy, hydro-energy..................... 15
2.3 Main effects with respect to agricultural and forestry production ........................... 15
2.3.1
Change in land use patterns.............................................................................. 15
2.3.2
Change in cultivation practices, innovation and investments .......................... 16
2.4 Overview of the installations producing bio-energy ................................................ 17
2.4.1
Number and capacity development over the last years .................................... 17
3 National policy and concepts promoting renewable energies .......................................... 18
3.1 National policy ......................................................................................................... 18
3.2 National concepts and programmes ......................................................................... 18
4 Impact of the promotion of renewable energies............................................................... 22
4.1 Impact on the agricultural sector .............................................................................. 25
4.2 Impact on rural development.................................................................................... 25
4.3 Impact of internet ..................................................................................................... 26
5 Strengths and weaknesses of renewable energies ............................................................ 27
5.1 Strengths and weaknesses ........................................................................................ 27
5.2 Opportunities and Threats ........................................................................................ 28
5.3 Summary of SWOT analysis.................................................................................... 29
6 Conclusions ...................................................................................................................... 29
Bibliography............................................................................................................................. 30

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Acronyms
ARIB
CAP
CHP
CM
EC
Ect SF
EE
ERDP
Est. SF
EU
EWPA
FADN
FAO
GDP
GWh
IPECTP
kWh
MAFA
Mo E
MW
NDP
NEAP
NES
OPET
PHARE
RDP
R&D
RE
RES
SAPARD
SPD
TPES
TrJ
TWh
UAA
WTG

Estonian Agricultural Registers and Information Board

Common Agricultural Policy
Combined Heat and Power
cubic meter
European Commission
Estonian Science Foundation
Estonia
Estonian Rural Development Plan
Estonian Science Foundation
European Union
Estonian Wind Power Association
Farm Accountancy Data Network
Food and Agriculture Organization
Gross Domestic Product
Giga Watt hour
Implementation Plan for the Energy Conservation Target Programme )
kilo Watt hour
Multi-annual Financial Agreement
Ministry of Environment
Mega Watt
National Development Plan
National Environment Activity Plan
Estonian National Environment Strategy
Organisation for the Promotion of Energy Technologies
Poland and Hungary: Assistance for Restructuring their Economies
Rural Development Plan
Research and development
Renewable Energy
Renewable Energy Sources
Special Accession Programme for Agriculture and Rural Development
Single Programming Document
Total Primary Energy Sources
Terra dzaul
Terra watt hour
Utilised Agricultural Area
Wind Turbine Generator

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Tables and Charts

Section 2
Chart 2.1 Structure of domestic energy production in Estonia (2007)
Chart 2.2 Annual forest cutting and increment in 20002006
Table 2.1 Estonian Energy Balance 20002007
Table 2.2 Share of renewable electricity production
Table 2.3 Production and price of wood pellets in Estonia in 200020008
Table 2.4 New projects for WTGs construction in Estonia
Table 2.5 Diesel and share of bio diesel consumption in Estonia 20002007
Table 2.6 Petrol and share of bio ethanol consumption in Estonia 20002007
Table 2.7 Forest resources and utilization in Estonia in 2002.2007
Table 2.8 Heating share of Renewable Energy in Estonia 20002007
Table 2.9 Production of energy from wood-based fuel in Estonia in 2007
Table 10 Theoretical and economic potential of the resources of renewable fuels usable in
20032008 for electricity and heat production
Table 2.11 Changes of the area of the rapeseeds in Estonia in 200020008
Section 3
Table 3.1 Basic principles guiding national policy on renewable energies
Section 4
Table 4.1 Grants awarded for research and development in the field of renewable energy
sources:
Table 4.2 Number and share of farms producing energy grasses for renewable energy
production in Estonia
Table 4.3 Impact of renewable energies on rural development
Table 4.4 Development of internet in Estonia (2000...2007)
Section 5
Table 5.1 Summary of SWOT-analysis

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1 Introduction
Similar to the rest of the developed countries, sustainable development and preservation of
environment has become one of the priorities of many of the companies and citizens of the
Republic of Estonia. Besides generating electricity from oil shale, renewable energy sources
water, wind, wood, and biomass - are becoming more and more significant alternatives to the
conventional fuels.
More than 90% of electricity consumed in Estonia is produced by Estonian Energy. Estonian
Energy is a state owned power production, transmission and distribution company of the
Republic of Estonia.
The energy production from renewable energy (RE) sources of Estonia in 2007 was close to
30 GWh, comprising 16 % of the countrys total energy production. About 94% of electricity
consumed in Estonia, was produced from local fuel oil shale.
Before Estonian Energy initiative, sustainable energy has not been sold to the electricity
consumers as a separate product in any of the Baltic Countries and Russia. We anticipate that
the positive example created by Estonian Energy will challenge the power generators,
distributors and suppliers of other countries in the region to follow our footsteps, and,
consequently to improve the living environment of people and nature in this region.

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2 Overview of the use and relevance of renewable energies

Renewable energy sources
From the renewable energy sources in Estonia biomass and wind have the highest potential.
Practically applicable reserve of hydro energy is about 30 MW. Attention should also to be
pointed to energy from waste in light of implementation of the directive 2000/76/EU
(http://deepzone2.ttu.ee/soojus/loengud/poobus/asj3030_8.pdf) . Utilisation of renewable
energy carriers is in coming years bounded to small scale power mainly.

2.1 Relevance of renewable energies in national energy supply

Domestic energy production in Estonia accounts for 77% of total energy supplies in 2007.
Imported fuels (natural gas, fuel oils, coal, motor fuels, Russian oil shale, liquid gas) made up
only 28% of the fuels utilized in 2007. Oil shale is the largest source of primary energy in
Estonia, representing 84% of Estonias TPES in 2007 and Estonian oil shale accounts for
about 70% (Source: Statistical Office of Estonia, www.stat.ee) of overall world oil shale
production.

Other sources
Hydro and wind
0%
0%
Firewood
Peat 14%
2%

Oil shale
84%

Chart 2.1 Structure of domestic energy production in Estonia (2007)

Sources: Estonian Statistical Office; Electronic database

The share of renewable energy production reached 16%, wood fuels formed the main part of
it. Other sources (mainly peat) remained on the level of 2% in 2007 (Chart 2.1).

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Table 2.1 Estonian Energy Balance 20002007
Unit: (TrJ)
2000
2001
2002
Beginning stocks
20713
20064
14578
Energy production
132389 131999 140265
..oil shale
108330 106183 111103
..peat
3345
3427
6416
..firewood
20617
22279
22608
..other energy sources (solar, wastes..)
76
82
112
..hydro and wind energy
21
28
26
Import
74161
79975
74327
Export
11915
12644
14746
Ships bunker
4393
4189
4956
Ending stocks
20064
14578
15620
Primary energy supply
190891 200627 193848
Consumed for energy transformation
159019 160254 157854
Production of transformed energy
82038
85862
88694
Self consumption of the energy sector
7456
7620
7220
Consumed for raw materials
7751
8057
3864
Fuel and energy losses
9483
10134
9792
Final consumption
89220 100424 103812
Estonian Statistical Office; Economy, Energy, Electronic database

2003
15620
162400
132096
3531
26592
113
68
79076
19873
4711
19289
213223
177037
94620
8896
5099
8951
107860

2004
19289
154123
124121
2678
27132
84
108
88500
21650
6249
15074
218939
178640
96317
8274
8526
8856
110960

2005
15074
161071
129423
3550
27678
150
270
81113
22425
5004
15250
214579
174356
96867
8209
8180
8188
112513

2006
15250
155265
125022
4726
25044
150
323
87238
21160
8825
19565
208203
167134
96216
7419
7310
7863
114693

2007
19565
176666
146747
4405
24890
219
405
97481
33504
10180
19710
230318
186609
105831
9191
7061
8850
124438

Last years the oil shale and wind energy production significantly increasing (Table 2.1)
The peculiarities of Estonia in the reserves and utilisation of primary energy could be
summarised as follows:

Share of domestic energy sources in energy reserves and balance of primary energy is
high, basing mainly on the oil shale. It gives considerable strategic independence in
electricity supply (we have the share of imported energy sources about 1/3, in states of
European Union about 2/3 in average)

Reserve of the biomass is the biggest among the renewable energy sources, from
which wood fuels are mainly used so far; wind energy is perspective resource in
future.

Supply of fuels and energy as a whole satisfies customer's basic needs and there
should be no fear of rapid exhaust of domestic energy sources.

Supply of natural gas originates from one country only.

2.1.1

Production and share in total electricity supply

The share of renewable electricity production in Estonia is rather small and consist 1.40 % of
total electricity production in 2007 (Table 2.2).

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Table 2.2 Share of renewable electricity production
Total electricity supply (GWh)
Renewable electricity (GWh)
Peat
hydro-electricity
Wind electricity
others RE sources
total RE (GWh)
Share of RE %

2000
8510

2001
8481

2002
8524

2003
10158

2004
10302

2005
10201

2006
9729

2007
12188

19
5
0
22
46

20
7
0
22
49

20
6
1
27
54

20
13
6
26
65

15
22
8
31
76

14
22
54
33
123

16
14
76
38
144

22
22
91
36
171

0,54

0,58

0,63

0,64

0,74

1,21

1,48

1,40

Estonian Statistical Office; Economy, Energy, Electronic database

Estonian national goal is to achieve the share of renewable electricity 5.1% from the gross
production by 2010 (Electricity Market Act. (2003)). . This figure is also that recommended
for Estonia by European Union (Long-term Development Plan for the Estonian Fuel and
Energy Sector up to 2015 (2002)). To achieve this goal priority should be given to bio-fuel
based cogeneration electricity and wind energy should be developed, in addition to the small
hydro applications.) For building wind farms favourable by the wind condition areas should
be used. Taking in consider the existing knowledge and production capacities the expediency
of the manufacturing of wind energy equipment in Estonia will be analysed. As an additional
opportunity in the development of renewable energy the development of the so-called market
of green certificates in Europe is being considered.
The use of renewable energy sources in the production of electricity is regulated in Estonia by
the Electricity Market Act, which entered into force in 2003 and was last amended in 2007
(RT I 2003, 25, 153; 2007, 23, 120), when substantial changes were also made to the system
of aid for renewable energy sources. The version of the Act applying until 30 April 2007,
which had come into force on 1 January 2005, required network operators to purchase in a
trading period (at a price of 0.052/kWh) all the electricity generated by a producer of
renewable energy to the extent of the operators network losses. The main problem with this
scheme was that a network operator who did not have a licence to sell electricity could not
buy more electricity than the amount equivalent to his network losses in the trading period.
This kind of support scheme was above all a source of uncertainty for wind farms connected
to the grid, since at times of low electricity consumption (for example summer nights)
network losses are small and so the purchase obligation was also small. Despite the
shortcomings of the support scheme in operation, the production of electricity from renewable
sources increased in the period 2005 -2006. At the same time consumption also increased (6
022 GWh in 2005 and 7 904 GWh in 2006), and therefore the share of renewable energy
sources in total consumption even fell, from 1.8% in 2005 to 1.6% in 2006. For this reason a
start was made back in 2005 on amending the Energy Market Act to introduce a new aid
scheme, and this process was concluded on 15 February 2007, when Parliament passed the
Act that came into force on 1 May 2007. The new aid scheme for producers of renewable
energy allows them to use the purchase obligation as before, but adds the possibility for a
producer to sell the electricity produced itself and be given aid for the electricity sent to the
grid and sold. The mandatory purchase price for electricity produced from renewable energy
sources has been raised by 42% (to 0.073 /kWh), and the possibility of using the purchase
obligation is no longer restricted to the network losses. In addition to making use of the
purchase obligation, producers of renewable energy can now receive aid of 0.054/kWh for
electricity sent to the grid and sold, which offers the possibility if sales are good of earning
considerably more than from the purchase obligation. The duration of the aid scheme has also
been extended: 12 years from the start of production (the previous Act allowed the aid scheme
to be used for between 7 and 12 years, but no longer than until the end of 2015).
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Wood energy
The wood processing industry is well developed in Estonia. Waste wood derived from wood
processing processes can be effectively collected. For example, about 95% of waste wood is
used for energy production. Several enterprises are producing wood chips, wood briquettes
(77 000 tons in 2006) and pellets (300 000 tons in 2006). The market for wood chips,
briquettes and pellets is well developed and operates on a combination of contracts and
demand-supply basis, with the price being set by the market. The lower price in the Baltic
States makes the export of wood products attractive.
Wood products from Estonia are an important export item to Denmark and Sweden. Similarly,
in Latvia the largest part of wood products is exported to Sweden. As exports increase, local
wood fuel users are concerned that they cannot offer as high a price as exporters of wood fuel
products can receive from abroad.
Due to the extensive use of firewood resources in Estonia, alternative options have been
considered, such as using of brushwood and cultivating fast-growing energy trees in areas not
suitable for agriculture. The biomass reserves of brushwood have not yet been thoroughly
investigated. A few experiments on growing energy forests were performed in Estonia.
Table 2.3 Production and price of wood pellets in Estonia in 200020008
Production of wood pellets (000 t)
Price (retail) of wood pellets (/t)

2000
na
9.6

2001
na
11.8

2002
na
13.8

2003
10
16

2004
6
19.6

2005
11
24.7

2006
12
25.9

2007
16
34.5

2008
19
26.7

Source: Estonian Statistical Office

Production of wood pellets increasing in last years (Table 2.3). But the energy share of pellets
still remains quite modest. The main reason is high price compared with other wood energy
types (natural woods, rests).
Wind energy
Most prospective areas for wind energy utilisation are West-Estonian islands and coast areas
on North-West and South-West Estonia, also the areas of North-Estonian coast and coast of
Lake Peipsi. Taking into consideration the present state of the electrical system it is possible
to install wind generators with the total capacity of 90100 MW, what would deteriorate
power system operation quality (without any influence on the operation the absorptive ability
is 3050 MW). Technically it could be possible to install wind generators with the total
capacity of 400500 MW, but this requires corresponding investments into electrical
networks and power plants to provide transmission, control and required reserves. In addition
to the electrical networks the utilisation of wind energy in Estonia is limited also by relatively
low electrical load, large unit capacity of existing power plants and by their poor
manoeuvrability. The problem is cushioned to some extent by the strong electrical
connections to Russia and Latvia, which can be used to smooth the irregularities of wind
energy.

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Present situation
In 1997 the first modern wind generator started working at Tahkuna peninsula in Hiiumaa
Island. The owner of the wind generator is the Centre of the Hiiumaa Biosphere Reserve. The
wind generator operates at its maximum capacity at the wind speed of 14 m/s and the average
annual electricity production reaches up to 300 MWh, which is about 1% of the final
electricity consumption of Hiiumaa. In October 2002 the first Estonian advanced wind park
Virtsu Wind Park was commissioned. This project was supported by German Ministry of
Economy and Technology and Estonian Regional Development Foundation. The Virtsu Wind
Park is the common project of O Roheline Ring, AS Eesti Energia and German wind
generators producer Enercon GmbH. The total capacity of the three wind generators is 4.8
MW and with this amount of energy ca 500 of households could be supplied with electricity.
The towers in Virtsu Wind Park are 63 meters high, rotor diameter with blades is 44 meters
and the length of blades about 19 meters. The electricity produced in Virtsu Wind Park is sold
to the Green Energy system of the AS Eesti Energia, where every private and/or legal person
can support the production of green energy by purchasing the corresponding certificate.
Future perspectives
In Estonia the electricity production from wind energy is developing steadily. Several new
projects for the construction of wind parks are under preparation. AS Eesti Energia has
received a large number of applications to connect the new wind generators to the grid (Table
2.4). All projects have been publicly discussed in local communities. Taking into account the
current trends, it is anticipated that in Estonia ~50 new wind turbine generators (WTG) will
be erected by 2010 with a total capacity ~50100 MW (compared to about 2 MW in 2002).
Estimations indicate a good potential for wind energy development, nevertheless the potential
can be realized only if economic incentives are sufficient.
Table 2.4 New projects for WTGs construction in Estonia
Project/Investor
Pakri Wind Park (EU support)
O Meritreid
O Meritreid
O "Roheline Ring"

2.1.2

Site
Pakri pensula
Srve pensula
Coast of Lake Peipsi
Virtsu pensula

Capacity kW
8x2500
230
150
5 units (including 1.8 Mw unit)

Production and share in national transport

Diesel consumption
Estonia doesn't produce the bio-diesel and therefore consumption is quite low reaching only 1
000 ton in 2007 (Table 2.5).
Table 2.5 Diesel and share of bio diesel consumption in Estonia 20002007

National diesel consumption (000 ton)

Bio diesel (000 ton)
Bio diesel share (%)

2000
284
0
0

2001
324
0
0

2002
348
0
0

2003
393
0
0

Estonian Statistical Office; Economy, Energy, Electronic database

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2004
417
0
0

2005
447
0
0

2006
480
0,6
0

2007
528
1
0

AgriPolicy
Patrol consumption
Bio-ethanol consumption is fixed beginning of 2007 and amount of consumed fuel is close to
1000 ton (Table 2.6).
Table 2.6 Petrol and share of bio ethanol consumption in Estonia 20002007
2000
306

Petrol consumption (000 ton)

Bio ethanol (000 ton)
Share (%)

0
0

2001
335
0
0

2002 2003 2004

2005
2006
2007
311
306
288
290
308
323
0
0
0
0
0
1
0
0
0
0
0
0

Estonian Statistical Office; Economy, Energy, Electronic database

2.1.3

RE production and share in national heating consumption

Forest resources and RE

Estonia is rich in forests (about 47.9% of whole territory is coved by forests) and has a high
potential for energy production from wood-based fuels - firewood, wood by-products (e.g.,
wood chips, pellets, granules, briquettes), forest residues, waste wood.
Table 2.7 Forest resources and utilization in Estonia in 2002.2007
(Average per year)
Area covered by forests
Total stock of food
Net annual increment of the wood biomass
Felling volume of wood
Production of wood-based fuels

2 Million ha (47.9% of total territory)

400 Million m3
1213 Million m3 /year
Up to 13 Million m3
3700 Thousand m3

Source: Statistical Yearbook of Estonian 2002 - 2007 Statistical Office of Estonia, 20032007

Forest resources and their utilization in Estonia are presented in table 2.7 and 2.8. Although in
official statistics the felling volumes correspond to growth rates, some experts have expressed
an opinion that recommended felling volume has already been exceeded in Estonia (Koppel,
A., Perttu, K., Ross, J. 1996).
Table 2.8 Heating share of Renewable Energy in Estonia 20002007
Total heating consumption (GWh)
Renewable energy (GWh)
peat
wood
Total RE
RE share (%)

2000
3777

2001
3983

2002
4011

2003
3951

2004
3809

2005
3750

2006
3835

2007
3570

74
214
288
7,6

147
220
367
9,2

155
243
398
9,9

146
195
341
8,6

98
248
346
9,1

75
324
399
10,6

87
277
364
9,5

136
220
356
10,0

Estonian Statistical Office; Economy, Energy, Electronic database

The wood processing industry is well developed in Estonia. Waste wood derived from wood
processing processes can be effectively collected. For example, about 95% of waste wood is
used for energy production. Several enterprises are producing wood chips, wood briquettes
(77 000 tons in 2006) and pellets (300 000 tons in 2006). The market for wood chips,
briquettes and pellets is well developed and operates on a combination of contracts and

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AgriPolicy
demand-supply basis, with the price being set by the market. The lower price in the Baltic
States makes the export of wood products attractive.
Wood products from Estonia are an important export item to Denmark and Sweden. Similarly,
in Latvia the largest part of wood products is exported to Sweden. As exports increase, local
wood fuel users are concerned that they cannot offer as high a price as exporters of wood fuel
products can receive from abroad.
Due to the extensive use of firewood resources in Estonia, alternative options have been
considered, such as using of brushwood and cultivating fast-growing energy trees in areas not
suitable for agriculture. The biomass reserves of brushwood have not yet been thoroughly
investigated. A few experiments on growing energy forests were performed in Estonia.
The potential for energy production from forest residues is still not efficiently utilized in
Estonia. For example, the use of forest residues accounts for only 10% of energy production
from wood-based fuels. Among the reasons for this are that residues are picked up manually
due to small area of clear-cuts, as defined by environmental regulations. Thus the use of
heavy equipment is not suitable for the pick-up of residues
Present situation
In Estonia wood-based fuels are mainly used for heat generation in centralized heating
systems having boiler houses utilizing mainly firewood and waste wood. Another large group
of users are households that use mainly firewood (Table 2.9). So far, the use of wood-based
fuels for energy production in combined heat and power (CHP) plants has been limited mostly
due to an unbalanced demand for heat during the year. An overview on energy production
from wood-based fuels in boiler houses and households is presented in Table r
Table 2.9 Production of energy from wood-based fuel in Estonia in 2007
Production of heat in households TJ
Number of wood fired boiler houses
Capacity of wood fired boiler houses, (MW)
Production of heat in boiler houses, (TJ)
Total production of heat from wood based fuels, (TJ)
Share of energy produced from wood to the total primary energy supply ( %)

n/a
792
768
6174
21782
11.2

Source: Energy Balance 2007; Statistical Office of Estonia, 2007

Future perspectives
In general, energy production from wood-based fuels has a good potential in Estonia.
Extended use of wood-based fuels for energy production will largely depend on support
schemes established by the Government. It is envisaged that the full potential of wood-based
fuels can be realized best by increasing the use of forest residues, waste wood and brushwood.
Further harvesting of wood for energy production cannot be considered sustainable. The
efficiency of the utilization of forest residues, waste wood and brushwood can be improved by
increasing the efficiency of the collection process. Furthermore, the competitiveness of the
market price of wood-based fuels and transportation costs are factors that will influence the
use of wood-based fuels. If the market price is too low and transportation costs are too high
then, for example, forest residues are mainly left lying on the ground or burned in forest.

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Table 10 Theoretical and economic potential of the resources of renewable fuels usable in
20032008 for electricity and heat production
Renewable fuel
Wood
Straw
Energy plants
Reed
Bio-gas
Food waste
Total

Theoretical potential
PJ
TWh
52.13
14.48
5.46
1.52
40.50
11.25
1.98
0.55
1.44
0.4
0.36
0.1
101.87
28.30

Economic potential
PJ
TWh
20.60
5.72
2.11
0,59
20,25
5,63
0
0
0
0
0
0
42.96
11.94

Source: Long term Development Plan for the Estonian Fuel and Energy Sector up to 2015

Calculations proved that for the electricity and heat production based on the biomass
theoretical and economic potential highest for wood and energy plants (Table11)

2.2 Sources of renewable energies: implications for farms

2.2.1

Wood as a object of RE
Private forests and RE

Of the total forest area, 38% or about 860 000 ha belong to the state, and 39% or about 900
000 ha belong to private owners. Most of the remaining woodlands are still subject to the land
reform. After the end of the land reform, which commenced in 1991, about 60% or 1.3
million ha of forest land should be in private ownership. The overall volume of cutting has
increased as a result of forest management; for example, the cutting volume of 2003 exceeded
that of 1993 by more than three-fold. In 2005, 5.12 million cubic metres of timber was cut in
the Estonian forests (7.63 million cubic metres in 2004), which is the lowest cutting volume
since 1997. In 2005, in private forests, 2.76 million cubic metres of timber was cut and the
total cutting area was nearly 82 000 ha. By type of cutting, 63% was regeneration cutting,
36% was improvement cutting, and 1% was selection and other cuttings in 2005. Sanitary
cutting has increased compared to the previous years and was at its highest level in the past
ten years in 2005. In connection with cutting, reforestation has increased year after year,
especially in private forests. Reforestation work was carried out on 10 000 ha in 2002 and 11
307.3 ha in 2003. In 2005, reforestation covered nearly 8200 ha, of which 6000 ha was
planted with new forest and contributions to natural reforestation were made on 850 ha. Forest
plantations were established on 6500 ha of clear cut areas, 170 ha of former quarries and 520
ha of agricultural land (Long-term Development Plan for the Estonian Fuel and Energy Sector
up to 2015 (2002)).
The share of RE energy supply from the private forest compared with state owned forest quite
modest. Farmers dealing with agricultural activities specialising mainly to the crop or
livestock production. Therefore the forest products still remain on the second position. Mainly
farmers using his forest resources for the own farm heating purposes.

Annual crops

Most potential crop for bio-diesel production in Estonia is rapeseeds. The area harvested
increased compared to year 2000 close to 2.7 times and production 2.8 times (Table 2.11)
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AgriPolicy

Table 2.11 Changes of the area of the rapeseeds in Estonia in 200020008

2000

2001

2002

2003

2004

2005

2006

2007

2008

Rape seed (000 ha)s

28.8

27.5

32.9

46.3

50.4

46.6

62.5

73.6

77.7

Rapeseed production (000 ton)

38.6

41.3

63.9

69.2

68.6

83.1

84.6

133.3

110

Human consumption (000 ton)

2.3

2.4

2.2

2.2

2.5

3.2

2.5

2.2

5.5

5.7

5.8

3.5

3.1

3.7

3.8

3.0

1.7

5.0

% of production

Source: Estonian Statistical Office, Electronic database

At the same time the human consumption still quite stable and varied between 2200...5500 ton
per yea. Therefore taking into account the small share of human consumption significant part
of oilseeds production possible to use for bio-diesel production or other purposes (export,
food industry etc).
2.2.2

Other energy sources: wind energy, solar energy, hydro-energy

Wind, solar and hydro energy are not significant on the farm level. Small number of farmers
producing the natural grasses from the idle land for the RE purposes. This activity is quite
highly subsidised by EU support schemes:

Direct RE support, if the farmers collected and selling the grasses for heating
purposes;
Single area payment scheme (SAPS) to maintain the agricultural land in good
condition;
Supports for environmentally friendly production schemes (full or partial
commitments).

Last measure is broadening only to the arable land which is rather exceptional among the
farmers.

2.3 Main effects with respect to agricultural and forestry production

2.3.1

Change in land use patterns

Main effects with respect to agricultural area and production are significant increase of
oilseed cultivation. The main reasons are the low production costs and rather high support for
rapeseeds.

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AgriPolicy

16
13,9
14
12,7
12

12

11,5
10

mill. cm

10
8

6,4

5,2

4
2
0
2000

2001

2002

2003

2004

Actual cutting

2005

2006

Annual increment

Chart 2.2 Annual forest cutting and increment in 20002006

Source: Prt Enn Viimase paarikmne aasta raiemahud Metsakaitse- ja Metsauuenduskeskus;
(http://www.zbi.ee/talkk/materjalid/TA%20LKK%2029052008%20Enn%20Part.pdf)
Last seven years the annual amounts of forest cutting significantly decreasing. During the last ten

years, the area of the abandoned farmlands has increased. Considering the present situation in
cereal production, use of 25% of total straw production for fuel would make 100-150
thousand tons. In the future, with more intensive cereal production, the amount of fuel straw
could be as much as 200-250 thousand tons. Based on the calorific value of straw, it would be
possible to produce at present 0.4-0.6 TWh of energy, while in the future the corresponding
amount could be 0.8-1.0 TWh (Laur, A. and Tenno, K. Main (2002)).
Concerning the forestry sector the optimum annual cutting volume is expected to be 12.6
million CM and average annual increment is about 13.9 million CM (Chart 2.2)
2.3.2

Change in cultivation practices, innovation and investments

Estonian Rural Development Plan 20002006 (ERDP) formed the basis of the SAPARD
programme, which was implemented in Estonia in 20012006. The main objectives of the
ERDP were to support the implementation of acquis communautaire concerning the Common
Agricultural Policy and the related policies, and to solve the priority and specific problems for
the sustainable adaptation of the agricultural sector and rural area. The specific objectives of
the programme were the following:

to improve the efficiency of agricultural production and to bring agricultural

production into compliance with the EU internal market requirements;
to contribute to the socio-economic and infrastructure development of rural area;
to ensure the development of efficient and competitive food industry;
to provide conditions for sustainable rural development.

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Commentaire [MSOffice1] : p
ut also in list of references at end
of report

AgriPolicy
The first objective indirectly influenced the RE production through the technological
improvements of crop production.

2.4 Overview of the installations producing bio-energy

2.4.1

Number and capacity development over the last years

No bio-ethanol, bio-gas and bio-diesel capacity developments over the last years in Estonia on
the farm level.

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AgriPolicy

3 National policy and concepts promoting renewable energies

The fuel and energy sector is an important part of the infrastructure of the state, which has to
function and develop in the manner providing Estonian uninterrupted supply with proper fuel,
electrical energy and heat at the prices as low as possible. Thereby the energy sector has to be
as efficient as possible and comply with safety and environmental requirements. The energy
policy in Estonia is based on the :
1) Long-term Development Plan for the Estonian Fuel and Energy Sector (1998);
(Long-term Development Plan for the Estonian Fuel and Energy Sector up to 2015
(2002))
2) National Energy Conservation Programme and Action Plan for Energy Conservation
(2003)
3) National Environmental Strategy
(1997).

3.1 National policy

For updating the energy policy goals of Estonia, the Ministry of Economic Affairs and
Communications has started the process of drafting new Long-term Development Plan of the
Energy and Fuel Sector. The draft plan was presented to the Government in June 2004. As to
renewable sources, in the preliminary draft the following indicators have been proposed for
the year 2010: the share of renewable in total primary energy supply 11-13% and in electricity
production 5.1%.
As to international agreements, Estonia signed The Energy Charter Treaty (ECT) in 1994.
The ECT together with the Protocol of Energy Charter on the More Efficient Energy Use and
the Related Environmental Aspects were ratified by the Parliament of Estonia in February
1998 and entered into force on 2 August 1998. In December 1998 Estonia signed the Kyoto
Protocol of the United Nations Framework Convention on Climate Change. The Kyoto
Protocol was ratified by the Parliament in September 2002.

3.2 National concepts and programmes

The Long-term National Development Plan for the Fuel and Energy Sector (hereinafter the
Plan) is a document, which was approved by the Parliament (Riigikogu) in 1998 as a national
level plan for the energy sector (RT I 1998, 19, 295). There the targets are set for
development of the fuel and energy sector up to the year 2005 and principal development
trends given till 2018. As the environmental impact from energy sector cannot be reduced to
the required level without restructuring the use of energy sources, the major part of energy
demand increase is projected to be met by natural gas resulting in doubling its share in
primary energy supply in 10 15 years. Regarding the sustainable use of local resources, the
wider deployment of renewable sources is planned, especially in the form of electricity and
heat cogeneration based on these fuels. The Plan sets a target to increase the share of

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AgriPolicy
renewable and peat in the primary energy supply by 2/3 to the year 2010 against 1996. It
was also provided that to implement the Plan, a Target Programme Economically Feasible
Implementation of Peat, Bio-fuels and Other Renewable in Energy Production shall be
developed. Up to now, the programme has not been presented to the Parliament. As to
renewable fuels, in the draft of the programme the share of 13-15% was predicted for year
2010, and 20-25% for 2025.
At the beginning of year 2000, the National Energy Conservation Programme was approved
by the Government. The main objective of the programme is to propose concrete measures to
ensure the achieving of the relevant objectives set by the Long-term National Development
Plan for the Fuel and Energy Sector. General targets of the program include among others the
reduction of environmental impacts of the fuel and energy sectors. One of the main goals of
the programme is to ensure the CO2 emission level to be kept lower than limits fixed in Kyoto
Protocol (in 2008 2012 the emission level has to be at the level 8% lower than in 1990).
This document was followed by the Implementation Plan for the Energy Conservation Target
Programme (IPECTP), which was approved by the Government in March 2001. Both the
programme and the implementation plan cover the period 2001-2005. In the Programme there
is a provision ensuring the decrease of the emission of carbon dioxide by 8% as compared
with the year 1990, i.e. according to the Kyoto Protocol, by increasing the efficiency of
energy production and transportation by using environmentally friendly fuels and by reducing
energy consumption in all sectors and households.
The IPECTP includes a project Development and implementation of programme on
economically feasible exploitation of biomass, other renewable energy sources and peat in
energy production. The project was planned for the period of 2001 2005 with the total
financing of 2.9 MEEK (0.185 MEUR) from state budget. The target groups are the
following:
Ministry of Economic Affairs and Communication;
Ministry of Environment;
Counties governments;
Local governments;
Energy companies;
Users of local heating.
In the accompanying explanation to the project, it is pointed out that the experience gained in
1990s in expanding the use of bio-fuels and peat has indicated that the success of respective
projects directly depends on how well such projects are planned and prepared. Since in
exploiting renewable energy sources and peat is linked to regional development, regional
employment, pricing policy of fuels and energy and financing opportunities, the preparation
and launch of a national programme dealing with these issues is vitally important.
In the framework of the project, economically viable conditions of using renewable energy
sources and peat are planned to be analysed, environmental and regional aspects of
corresponding projects would be assessed. Also, the national programme should enable to
outline the assessment to the potential of economic viability of exploiting peat and renewable
energy sources both regionally and nationally.

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AgriPolicy
The national programme on economically viable use of renewable energy sources and peat
would be the basis for applying for international aid for financing respective pilot projects
through co-operation projects including European Union and Baltic Sea countries.
The National Environmental Strategy sets as a goal to orientate the energy policy towards
technological development, the use of renewable resources, a reduction in the generation of
greenhouse gases and internalisation of external costs of the energy production and
consumption in the price of energy. With accession to the EU, new rules for energy
production and requirements for the protection of the environment will need to be
implemented. Concerning the use of RES for energy production, the relevant national
legislation has been adopted in Estonia. Presently, in Estonia the main legislative acts besides
the regulation in the energy field defining instruments for the use of RES for energy
production are the Pollution Charge Act and Value-Added Tax Act. A substantial reform of
the legislation regulating the energy sector has been carried out in 2003. In July 1st, the old
Energy Act was repealed and four new acts entered into force: District Heating Act, Natural
Gas Act, Liquid Fuel Act and Electricity Market Act. The topics linked with RES use have
found largest attention in the Electricity Market Act and in its sub-ordinary regulation.
Various legislative measures for environmental protection and nature conservation are taken
into account when implementing policies to promote the use of RES (e.g., Planning Act,
Shores and Banks Protection Act, Protected Natural Objects Act, Heritage Conservation Act).
Presently, there are about 700 nature protection areas established in Estonia where, for
example, erection of wind turbine generators can be problematic.
Responsibility for the drafting and implementation of energy policy (incl RE) in Estonia lies
with the Ministry of Economic Affaires and Communication. There is no energy agency in
Estonia.
Table 3.1 Basic principles guiding national policy on renewable energies
Guiding principles
Need for a substitution of traditional fossil fuels
Development of a national concept promoting renewable energies
Financial support in promoting renewable energies
National focus more on promoting of renewable energies based on biomass (biogas,
biodiesel, bio-ethanol)
National focus more on promoting renewable energies based on non-biomass (wind,
solar, hydro-energy)
Stimulation/support of the private sector
Competitiveness of renewable energies with fossil energy
National independence of fossil energy supplies

Ranking
0=non relevant
5=highly relevant
5
5
5
4
3
2
2
4

Source: Compiled on the bases of interviews: Ministry of Economic Affaires and Communication

The evaluation results of the basic policy principles of RE by specialists are presented in table
3.1.
The RES main actors
The biggest energy company is 100% state owned Eesti Energia Ltd. (AS Eesti Energia) (a
company producing, delivering and selling electricity and heat), together with its associated

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AgriPolicy
companies Eesti Plevkivi (Oil Shale) Ltd (extracts oil shale) and Narva Electric Power Plants
Ltd (produces electricity and heat from oil shale). AS Eesti Energia has established an
alternative way to increase development of renewable energy production in Estonia by issuing
green energy certificates for producers and customers. Green Energy Producer Certificate is
issued to all the generators of alternative energy who sell their production to Eesti Energia.
Any company, governmental institution and residential customers having a contract with AS
Eesti Energia may purchase electricity produced from RES and receive a Green energy
customer certificate. The price for this green electricity depends on the amount of purchased
power. Each Green energy customer supports the Estonian Fund for Nature (ELF) through
donations. ELF uses these funds to finance projects related to nature conservation,
environmental education and sustainable development.
Estonian Biomass Association was founded in 1998 as a non-profit organisation. Their fields
of activity are biofuels research, resources estimation, development of renewable types of
energy, promotion of the use of RES on national and personal level. There are 42 members
(enterprises, organisations, research institutions, individuals) in the association. In 2001
Renewable Energy Council (about 15 members of very different background) was founded to
consult and advise the Minister of Economic Affairs and Communications.
EWPA - Estonian Wind Power Association was founded on September 2001. EWPA has
four members: AS Tuulepargid, SeeBA Energiesysteme GmbH, Ostwind Verwaltungsgesellschaft GmbH and Tuuleenergia O. The mission of EWPA is to:

provide a common voice for the wind power developers and related organisations in
Estonia and to provide a platform for joint activities;

advance the wind energy application in Estonia and thereby contribute to the main
objectives of energy policy in Estonia and Europe - energy market liberalization,
decentralization, and security of energy supply through wider use of renewable
energy;

improve the legislative environment for wind power development in Estonia;

represent its members in the relations with legislative and executive authorities, to
stand for the rights of its members, and to represent the member organisations both in
Estonia and abroad;

ensure public understanding of the benefits of wind power application;

create a forum for constructive dialogue with the Estonian government and other key
stakeholders.

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AgriPolicy

4 Impact of the promotion of renewable energies

Expected effective support instruments for promotion of RES based on the expert opinion of
specialist on the counties (Harju, Paldiski and Vndra ) level are:
Education and training of those who will be involved with the planning, development,
operation or promotion or renewable energy projects;
Establishment of state or public institutions promoting RES activities; raising public
awareness regarding RES, in combination with climate change mitigation issues,
through the media, informative brochures, study programs, etc.
Organization of conferences, workshops for experts and project developers concerning
legislation, technologies, market and financial instruments for RES.
The public is primarily made aware of RES through mass media (television, radio,
newspapers, etc.). A number of articles have been published in daily newspapers and
professional periodicals. Numerous leaflets, booklets, funding projects, etc have been
published. Also special conferences, workshops, etc have been held for the public to increase
their awareness about RES issues. Of course the co-operation with the Ministry of
Environment and of Economic Affairs and Communication & NGOs, work with
communities, journalists, etc. help to give better results.
From the year 1999 a special RES conference has been annually organized in Estonia
Investigation and Usage of Renewable Energy Sources. The main organizer of the event is
Estonian Agricultural University in co-operation with the Estonian Biomass Association and
Foundation Archimedes. The conference proceedings are published and distributed to all
interested people.
The second example is connected with the international OPET Network where Estonia has
been participated from the year 1998. The network is co-financed by European Commission
and established for promotion of energy efficient and renewable energy technologies. OPET
Estonia has developed a close relationship with the Estonian governmental institutions,
research institutes, energy centres, Estonian energy companies, energy specialists, etc. The
dissemination work through organised seminars, workshops, training courses and also OPET
library with excellent information on RUE and RES technologies has successfully reached the
target groups. The project has become very popular and well-known in Estonia.
The Internet plays a very important role, because much information can be obtained there.
New books, conferences, environmental NGOs, nature clubs, universities, etc. - everything
can be found there. Estonians have good access in the Internet. For example 80% of the
inhabitants of Estonia, have access to the Internet from schools, libraries, Internet cafes, etc.
Because of good Internet access environmental campaigns, training, etc. can be made also via
the Internet. There are several e-mail lists on the environmental subject. For instance Loodus
ja Aeg (Nature and Time) gives good information about resent articles, MoE work,
environmental policy laws, conferences, new books, etc. To become a member of this kind of
list is free of charge and usually available for anyone who is interested.
Estonian Academy of Sciences, Estonian universities, research institutes and scientific
societies organise regularly workshops and seminars to discuss different aspects of renewable
energy and their positive impact to the environment possibilities to mitigate negative
consequences of global warming.

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AgriPolicy

Research and Development

The bases for research and development organization is laid down in Organisation of
Research and Development Act, which regulates the role of different governmental agencies,
methods of management and coordination of the whole system. The country's R&D policy is
carried out by the Ministry of Education and Science, innovation policy is the responsibility
of the Ministry of Economic Affairs and Communications. The Estonian Government is
advised in R&D strategy issues by the R&D Council (founded in 1990), whose activities are
based on two standing committees, one focusing on R&D and the other on innovation policy.
The research and development strategy Knowledge-based Estonia reflects recognition of the
increasingly greater role of research and innovation in shaping Estonia's future, aiming to
ensure reproduction of knowledge and skills, renewal of the traditional industries and their
integration into the rapidly developing knowledge-intensive areas of new economy. For
Estonia the set out key technological areas are information society technologies, biomedicine
and materials technologies, but nothing related to energy.
The key elements of the Estonian research system are the universities, whose basic
responsibilities are scientific research, post-graduate training and provision of higher
education, but also more and more extensive cooperation with other R&D institutions and
users of research outcomes; followed by minor institutes and R&D establishments. Besides
the above, national innovation system includes also enterprises participating in R&D
activities, different state structures responsible for R&D and innovation policy. The existence
of national competitive financing is one of the prerequisites for the development and quality
of national innovation system. Division between various categories of research and
development in 1999 was as follows: 49.8% to basic research, 34.5% to applied research and
15.7% to technological development. State financing of R&D is organized through targeted
financing, R&D grants, maintenance of the infrastructure, national R&D programmes and
support programmes for innovation. Targeted financing is planned for developing new
research areas and to obtain the information resources needed for research and remains within
the responsibility of the Ministry of Education and Science. The research grants are financed
by the Estonian Science Foundation from the budget of the Ministry of Education and
Science. Different support schemes are financed from the budget of the Ministry of Economic
Affairs and Communications through the Estonian Technology Agency with the aim to raise
the competitiveness of enterprises by developing and applying new technologies. The support
scheme is oriented to product development in enterprises, research within a market potential
undertaken in R&D institutions, and preliminary studies for projects.
Energy research as any other research in Estonia is financed by the institutions described
above. So far there are no energy oriented special funding schemes available. The only
attempt to launch a National Programme of Energy Research and Development Activities till
the year 2000 was made in 1995, but unfortunately the programme was never adopted. Two
universities and one applied higher educational institution have energy related subjects
included in their curricula. In Estonian Agricultural University both Institute of Agricultural
Energy Engineering and Institute of Forest Industry teach bio-energy related subjects
resources and technologies, theoretical and practical side. Tallinn Technical University is the
main centre of technical research and education. Institute of Thermal Engineering in the
Faculty of Mechanical Engineering provides education on fuels, boilers, combustion
technologies, energy production, energy management etc. Kehtna Economy and Technology
School provides applied higher education - processing since 1991, and production of local

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AgriPolicy
fuels since 1994, to which maintenance of energy equipment was added in 1997. They also
cover organisation of heat production in small business and exploitation of boiler plants. An
initiative has been launched by Tallinn Technical University Development Centre of Power
Engineering, with the aims of activity listed below.

Application of the newest achievements of science - new materials, renewable energy

sources, new optimisation methods, energy storage devices, power electronics,
intelligent electrical drives, information technology, productive equipment and
technology - for reconstruction of Estonian electrical power system and consumption
processes to ensure the sustainable and environment friendly development.

Development and application of innovative products, technologies and services in

mutually beneficial cooperation with companies in Estonia and abroad.

Transfer of the newest achievements of world science and know-how of the top
technologies of power electrical and mining technologies to Estonia, enhancement of
development potential and creation of product development environment at Tallinn
Technical University.

The centre may develop into a strong promoter of wider application of renewable energy
sources, new sustainable and environmentally friendly technologies and new research
programmes.
The Estonian Science Foundation (EstSF), established on July 1990 by Estonian Government,
is an expert research funding organisation. Its main goal is to support the most promising
research initiatives in all fields of basic and applied research. The EstSF uses state budget
appropriations to award peer-reviewed research grants to individuals and research groups on a
competitive basis. Grants awarded for research and development in the field of renewable
energy sources in the period 2000-2007 are presented in the table 4.1
Table 4.1 Grants awarded for research and development in the field of renewable energy
sources:
Grant name
Production Ecology of Willow Short Rotation Forests
and Combined Use of RSF as Vegetation Filters and
Renewable Energy Recourses

Grant holder and university

Katrin Heinsoo, Institute of Zoology and
Botany at Estonian Agricultural University

Period
20012004

Radiation Regime, Architecture and Biomass Production

of the Energy Forest (Willow and Grey Alder) in Estonia

Juhan Ross, Tartu Observatory

20012003

Improvement of Biofuels Grate Firing Technology Ants

Veski, Tallinn Technical University Air distribution
influence to the boiler efficiency at grate burning of
biofuels

Ants Veski, Tallinn University of

Technology

20042006

Engineering bases for producing hydroenergy on small

rivers considering environmental requirements

Mare
Prnapuu,
University

Estonian wind climate and wind energy resources

Ain Kull, University of Tartu

20032005

Possibilities and Efficiency of the Use of Wind

Generators in Estonia

Olev Liik, Tallinn Technical University

20002002

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Tallinn

Technical

20032004

AgriPolicy

Modelling of cooperation of wind turbines and power

system

Olev
Liik,
Technology

Tallinn

University

of

20042007

Definition of the Parameters for a Hot Water System and

Solar Diffusive Radiation Model for the Estonian
Conditions

Teolan Tomson, Estonian Energy Research

Institute

20012003

Investigation on the Dynamics of the Estonian Wind

Energy Resource and Arrangements

Teolan
Tomson,
University

Tallinn

Technical

20022004

Study of the efficiency of the two-step controlled solar

collectors

Teolan Tomson,
ofTechnology

Tallinn

University

20042005

Optical Coatings for Solar Cells

Tiit Varema - Tallinn Technical University

20022003

Contacts for Semiconductor Solar Cells

Tiit Varema - Tallinn University of

Technology

20042005

4.1 Impact on the agricultural sector

The number of farms dealing with RE production is rather modest in Estonia. In 2008 only
123 farms or 0.6% of all farms producing the low quality natural grasses for energy purposes
(Table 4.2). The activity is combination with EU support frame of single area payment
scheme (SAPS), taking into account the compliance rules to keep the agricultural land in good
order.
Table 4.2 Number and share of farms producing energy grasses for renewable energy
production in Estonia
All farms
Farms producing RE
Share of all farmers (%)

2000
57163
0
0

2001
55748
0
0

2002
46304
0
0

2003
36859
0
0

2004
32303
0
0

2005
27747
11
0.0

2006
25539
17
0,1

2007
23331
59
0.25

2008
21936
123
0,6

Source: Estonian Statistical Office; Electronic Database;

4.2 Impact on rural development

The main objectives on the rural development level to promote the RE are:
To avoid local pollution and to keep local natural environment in good order;
To create the new jobs inside of local government (diversification of rural economies).
Estonian Government ratified new NEAP (2001-2003) on 05.06.2001. The NEAP idea is
building a bridge between the sustainable development and the EU approximation processes.
Many actions included in the NEAP are oriented at legal and substantive approximation with
the EU environmental acquis. Much effort has been put to make sure that the NEAP is
coordinated with the EU Accession Strategy as well as with other environmental programs,
particularly the Agenda 21, the National Environmental Health Action Plan, and stimulates
development of the local and regional environmental action plans. This NEAP consists of 657
actions classified by Policy Goal and within each policy goal by objective and subsequently
by time scale (short-term actions and medium-long-term actions). The NEAP contains a large
variety of different types of actions such as education, environmental awareness campaigns
etc. The top priority actions according to the prioritization methodology applied are typically
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AgriPolicy
legal reforms, drawing of management plans or capital investment into pollution abatement in
rural areas.
Table 4.3

Impact of renewable energies on rural development

Criteria

Ranking
0=non relevant
5=highly relevant
5
3
5
3
5

Role in national rural development programmes

Provision of new jobs on farm
Provision of new jobs in rural areas (non-farm)
New/additional source of farm income
New/additional source of income in rural areas

Source: Interview with economic and environment specialist of the local government of Saku, Kiili and
Paldiski

The table 4.3 was compiled by consulting of several specialists dealing with RE problems in
local government level.

4.3 Impact of internet

Estonia is not a third-world country, especially when it comes to the Internet. Its 1.3 million
people conduct more than 90 percent of their bank transactions online. About 40 percent read
an online newspaper every day. The nation is the first one in the world to embrace online
voting. Cell phones are often used for such basic activities as paying for parking or buying
meals in restaurants. Popular voice over IP company Skype is headquartered in Tallinn. Free
Wi-Fi is widely available. Indeed, Estonias parliament passed a law in 2000 declaring
Internet access a basic human right. The main internet development indicators presented in
table 4.4
Table 4.4 Development of internet in Estonia (2000...2007)
Year
Users
Population
% population
2000
366,600
1,299,000
28.2
2004
621,000
1,344,840
46.2
2006
690,000
1,332,987
51.8
2007
760,000
1,332,987
57.0
ITU International Telecommunication Union

Usage Sources
ITU
ITU
ITU
ITU

Concerning RE Agricultural Registers and Information Board established and developed the
own internet based information system for supporting the farmers to obtain information and to
create application for energy crops support.

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5 Strengths and weaknesses of renewable energies

SWOT analysis implemented taking into account the main perspective RE types in Estonia
wood, wind and oilseeds.

5.1 Strengths and weaknesses

The production of RE contributes to secure Usually RE is more expensive compared
energy supply to substitute fully or partly the with fossil energy.
fossil fuels.
Wood and oilseed production for bio-fuels is
a useful measure for recycle a set-aside land.
In Estonia the vacant land is about 200300
thousand ha.

RE production is land consuming and the

turnover from woodland still remain rather
low.

The supply chain of wood energy can be

characterized by relatively short transport
distances (locally produced and locally used).

Local use of RE need the investments for

coexistent technological solutions.

Due to a longer value chain within the national

boundaries, RE production creates new
employment opportunities in countryside.

Needs to find and training the staff members

in quite restricted local conditions.

Wood and oilseed production has the ability

to green wastelands and to prevent further
land degradation.

Restrictions
rising
due
to
slow
implementation of Land Reform in Estonia.

The production of RE products creates an

additional distribution channel for
agricultural products and increasing the
income for farmers.

Specialisation
and
concentration
of
agricultural production in the large size
enterprises eliminated RE production (except
the bio-gas and oilseeds).

Wood and bio-fuels are not or only little Wood and bio-fuels are characterized by low
energy content per volume.
toxic.

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5.2 Opportunities and Threats

Bio-fuels have the opportunity to replace a
large percentage of fossil fuels.

The market of transport fuels is dominated by

fossil fuels and will likely be so in the
foreseeable future.

New more efficient RE crops will be found Restricted research resources (financing and
human capital - researchers).
for bio-fuels production.
New and more efficient conversion
technologies will be found and existing
technologies will be improved.

Restricted innovation resources

The EU directive and Estonian national RE

strategies are promoting wind and bio-fuels
production.

The political lobby for RE is weak when

compared to the lobby of fossil fuels.

The Estonian government has set targets to Discoveries of new oil fields rapidly decreased in
increase the market share of RE (5.1 % 2010)
the last few years.

Due to Directive 2003/96/EC2, tax Quite significant local opposition against the
reductions for ER were introduced in Estonia wind parks in Estonia
for wind electricity.
RE are characterized by constant or decreasing The RE market is a relatively new market.
fuel or electricity prices through economies of
scale.

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5.3 Summary of SWOT analysis

The summary present three most important issues through the all SWOT components taking
into account overall RE development in Estonia (Table 5.1)
Table 5.1 Summary of SWOT-analysis
Strengths
1. Rich RE potential;

Weaknesses
1. Relatively low price for fossil fuels at the
moment;

2. Liberalisation of electricity market;

2. Slow implementation of Land Reform;
3. The production of RE contributes to
secure energy supply to substitute fully or 3. RE production are land consuming and the
turnover from woodland still remaining rather
partly from fossil fuels.
low.
Opportunities
1. EU funds for RE;

Threats
1. Lack of effective cooperation between energy
and environment agencies;

2. National target for RE (5 % for 2010 and

2. Negative reaction to some RE projects on
20% for 2020.
local community level;
3. The EU directive and Estonian national RE
strategies are promoting RE production.
3. Lack of investments in regional and local
level

6 Conclusions
Estonia will have the opportunity to take part in EU regional policy and to receive
considerable financial assistance from the EU budget. In accordance with the criteria
established in Council Regulation (EC) No 1260/1999, which lays down the general
provisions of Structural Funds, Estonia is a region covered by Objective 1, which is described
as promoting the development and structural adjustment of regions whose development is
lagging behind and provides the largest support rates.
Estonian National Development Plan for the Implementation of the EU Structural Funds
Single Programming Document 2004-2006 (hereafter referred to as SPD) serves as a basis
for the common activities of Estonia and the EU in promoting Estonias social and economic
development.
Regarding renewable, the Estonian SPD includes Measure 4.2: Development of
Environmental Infrastructure. The general objective of the measure is to improve the
environmental situation in Estonia. The specific objectives, among others, include the goal of
reducing the environmental impact of the energy sector, improving efficiency and increasing
the share of renewable energy. In the SPD it is emphasized that the main problems in the
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Estonian energy sector are related to high spatial concentration of the electric power
production and the considerable environmental burden caused by it. Therefore, the Measure
4.2 is planned to foster the use of renewable energy sources like biomass, wind and small
hydro. This would give rise to decentralization of the electric power production and would
reduce the use of fossil fuel sources that in turn helps to save the environment. Under the
Measure 4.2 the following projects are preferred:

Projects having bigger positive impact on the environment;

Projects contributing to the public-private partnership;

Projects having a higher share of applicants co-financing;

Projects promoting local employment.

Biomass activities are of special importance for Estonia due to its significant forest potential
and due to the fact that 25% of agricultural land is unused in this country. Energy crops and a
forestation of abandoned land could mitigate the underemployment problem in rural areas and
generate a sustainable energy. They will also contribute to the production
of liquid bio-fuels in line with Directive 2003/30/EC.

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