On Monday 9 December, the European Commission approved a €2.6 billion Estonian aid scheme for the construction and operation of offshore wind farms to generate electricity in specific areas of Estonia’s maritime space.
According to the EU institution, this scheme meets the requirements of the Temporary Crisis Framework in terms of State aid insofar as the aid will be granted, before the end of 2025, as part of a competitive tendering procedure.
The aid will take the form of a variable payment under two-way contracts for difference (CfDs) concluded for a period of 20 years. The amount of aid will be calculated by comparing a strike price, set out in the selected beneficiary’s tender offer, with the electricity market price.
When the strike price is higher than the market reference price, the difference will be paid by the Estonian State to the beneficiary in addition to the market price, with a ceiling on aid set at €65/MWh. Conversely, when the market price is higher than the strike price, the beneficiary will have to pay the difference to the Estonian State. The annual volume subsidised will be limited to 2 TWh/year. (Original version in French by Mathieu Bion)