On 7 November, the Economic ministers of Estonia and Luxembourg signed an agreement that will enable Estonia to sell energy statistics from renewable sources to Luxembourg. The proceeds of the sales, € 10.5 million, will be routed to reduce national renewable energy costs.
"The total amount of renewable energy in Estonia is approaching 30% and this gives Estonia the chance for a greater contribution to the achievement of the goals of renewable energy use in the European Union. Luxembourg has achieved its milestones, but due to its small size, it is necessary for them to implement cooperation mechanisms with other countries with potential for renewable energy in order to achieve their ultimate goals. Both Estonia and Luxembourg will benefit from this cooperation," said Kadri Simson, Minister of Economic Affairs and Infrastructure.
One of the main priorities of the European Union is to increase the use of renewable energy sources, based on the general principle that energy must be produced where the best conditions and opportunities are available. While domestic renewable energy sources can be used in all EU countries, some regions of Europe, due to their geographical peculiarities, have more potential for renewable energy than others. For example, in some countries, there are several rivers suitable for hydroelectric power plants, while in other countries there is a high potential for biomass that can be exploited by efficient district heating systems or suitable coastal areas for the development of wind energy.
As a consequence, the Renewable Energy Directive (2009/28/EC), having entered into force in 2009, sets individual renewable energy targets for the Member States to be completed by 2020. Luxembourg's share of renewable energy in its final consumption should be 11%. Estonia, however, met the target set for 2020 already in 2011, when energy from renewable sources accounted for 25% of final consumption.
Due to the limited area of Luxembourg, the Grand Duchy found that in order to meet their goals, transnational cooperation mechanisms, such as trade statistics needed to be deployed.
Cooperation mechanisms allow the Member States to achieve agreements for the statistical transfers of energy from renewable sources from one Member State to another. Countries with higher potential are therefore encouraged to surpass their targets in order to contribute to the overall EU 2020 goal via various collaborations.
In accordance with the agreement, the Republic of Estonia will transfer statistical quantities of renewable energy to the energy statistics of the Grand Duchy of Luxembourg, including all energy types produced from renewable energy sources, such as renewable electrical energy, renewable heat energy and renewable energy in transport. Only statistical quantities exceeding the national renewable energy target of Estonia in 2020, are for sale. With this deal, Estonia will sell about one-third of the amount exceeding the EU objectives.
With the agreement, the Grand Duchy of Luxembourg will receive the 2018-2020 amounts of renewable energy statistics. Estonia will receive a return of € 10.5 million. Additional conditions have been agreed on, that would allow Luxembourg to increase its purchases. The proceeds from the sale of renewable energy statistics go to the state budget and revenue is allocated to the System Operator for the purpose of compensating renewable energy subsidies that help increase the share of renewable energy and improve energy efficiency.