Why this is important to Wisconsin businesses: The Baltic nation plans to produce excess renewable energy so it can trade with EU member countries that are not on track to achieve the 2020 renewable energy targets.
Estonia shows above-average GDP growth within the EU, with a growth rate of 4.9 percent in 2017 and a projected growth rate of 3.7 percent in 2018. The underlying driver of this growth is increased private consumption due to rising salaries.
Estonia is strategically located for the implementation of renewable energy. Wind power accounts for 65 percent of renewable energy, followed by biomass with 25 percent, and the remainder comes from biogas, solar and hydropower. In 2015, renewable energy reached a 28.6 percent share in Estonia, and the government plans to expand this, with financial support of over $570 million to build combined heat and power plants, for transportation of renewable energy, and for the building of biomethane fueling stations. Subsidies are provided as well for the installation and use of renewable energy sources (RES) for electricity. Estonia’s goal is to support other EU members that are not on track in achieving their RES 2020 targets by trading renewable energy with those member countries.
The 2017 value of trade between Estonia and the U.S. amounted to $287 million, comprising $100 million in exports from the U.S. to Estonia and $187 million in imports into the U.S. from Estonia. Imported products in Estonia are often less expensive than domestically manufactured products. The Estonian government supports local production initiatives to ensure a higher local value added.
Planned initiatives that relate to the diversification of electricity supply open commercial opportunities for U.S. companies. One such project is Balticconnector, a joint project between Finland and Estonia to connect the two countries with a natural gas pipeline. To realize this $248 million initiative, Estonia is dependent on imports of construction materials. Furthermore, there is demand for machinery and machinery parts, mainly for the gas interconnection project’s underwater portion and the construction of the gas pipeline. Details of the materials that are needed are not published yet, but will be announced soon. Balticconnector will enable gas to flow in both directions, requiring a compressor station at both ends of the pipeline.
Simultaneously, Estonia is renewing the gas transmission infrastructure in the southern part of the country. Various offshore wind parks in the Baltic Sea are planned, requiring imports of turbines, towers, nacelles and cables.
Further information on the Estonian energy transition can be found on the website of the Estonian Renewable Energy Association. Trade fairs are the best way to get to know the local market and establish contacts with businesses. The “Environment and Energy 2018” trade fair, a joint exhibition of northern Baltic countries, including Estonia, takes place in Riga, Latvia, in October 2018.
More detailed reports are available on the website of the Estonian Ministry of Economic Affairs and Communications.