Producers offered 1,200 gigawatt-hours of renewable energy for the fourth reverse auction
By the deadline last week, 29 tenders were received from energy producers for the fourth reverse auction of renewable energy for producing a total of 1,201 gigawatt-hours of renewable energy per year. The volume of the received tenders exceeds the volume prescribed in the conditions of the reverse auction by 2.7 times.
The price range of the tenders received for the reverse auction, i.e. the guaranteed sales revenue expected by producers is between 18.99 to 45 euros per megawatt-hour. When paying a subsidy, the exchange price on the electricity market for the respective hour will be deducted from the offered price. This means that in the case of the lowest submitted tender, the producer will start receiving a subsidy when the hourly price on the electricity market falls below 18.99 euros.
According to preliminary data, producers whose price proposal for guaranteed sales revenue is 34.90 euros per megawatt-hour or lower will be granted the opportunity to receive a subsidy.
“The security of supply is Elering’s responsibility. The reverse auction that has now ended once again positively reassured us that interest in creating new production capacities is high. The received tenders indicate that new power plants can also be created without guaranteed subsidies,” said Taavi Veskimägi, Chairman of the Management Board of Elering.
According to Timo Tatar, Deputy Secretary General for Energy and Mineral Resources of the Ministry of Economic Affairs and Communications, the biggest reverse auction of renewable energy thus far shows that developers are highly interested in bringing renewable energy to the market. “Each and every extra megawatt of renewable energy is important for the country as it ensures a significantly cheaper price compared to fossil fuels and contributes to our climate goals. We are already able to observe on the electricity market that the solar and wind power production has a positive effect on electricity prices. The more we can ensure this kind of production, the less we need to start up power plants that use expensive fossil fuels,” said Tatar.
The statement of opening the tenders of the reverse auction along with the names of the tenderers and the offered volumes and prices is available on Elering’s website at https://elering.ee/tulemused.
This data currently constitutes preliminary and unverified data. An inspection of conformity to the requirements will follow the opening of tenders. Producers who continue to lead the list after passing the substantive inspection will be confirmed as subsidy receivers by the Government of the Republic.
According to the conditions of the reverse auction, the upper limit of the subsidy for producers declared successful will be 20 euros per megawatt-hour. The maximum limit for guaranteed sales revenue is 45 euros per megawatt-hour, which means that if the hourly price on the electricity exchange exceeds 45 euros, no subsidies will be paid to producers. Successful tenderers must begin producing renewable energy by the beginning of 2026 at the latest. A subsidy can be received for 12 years.
The recently finalised reverse auction was the fourth in total. The annual volume of the previous reverse auctions was five gigawatt hours, with the current auction providing a significantly higher volume – 450 gigawatt-hours per year.