First large-scale collective procurement of renewable electricity for state institutions in Estonia

We are advising Riigi Kinnisvara AS (RKAS), a real estate development and management company established for the efficient management of the real estate belonging to the Estonian state, on the purchase (public procurement) of electricity produced from renewable sources.

Commitment to renewable energy

As one of the largest electricity consumers in Estonia, RKAS is starting a phased transition of public sector institutions to renewable electricity by the decision of the Estonian government. The purpose of the procurement is to ensure the stability of energy costs of state institutions, as well as increasing the share of renewable energy in consumption, establishing new renewable electricity production units, and increasing the country’s energy security.

As a part of the procurement, the bidders are required to develop and construct new renewable electricity generating installations that are capable to generate up to 100 GWh of green electricity each year and supply this electricity to RKAS under a long-term (10 years from the start of electricity production) power purchase agreement (PPA).

Innovative throughout

This procurement is the first of its kind ever undertaken in Estonia, aiming to incentivize the development of new large-scale renewable energy production facilities via entry into long-term PPA.  Entry into long-term PPA should give the developers and their creditors the necessary certainty for a guaranteed income and enable the development of projects without public subsidies.

This will also be one of the first cases in Estonia where a new large-scale renewable energy project will be implemented under a long-term PPA. Until now, most projects have been implemented against public subsidies, no longer applicable to new projects. Hence, this kind of PPA project is necessary to bring new renewable energy projects to the market and thereby help Estonia to reach its renewable energy and climate targets.

Our services and client team

We advised RKAS on legal aspects concerning the public procurement, including public procurement and energy sector-specific laws, development of the suitable PPA model, as well as drafting all the relevant procurement documents such as technical description, PPA contract, qualification, and selection criteria.

Our client team is led by counsel Kaspar Endrikson supported by senior associate Mario Sõrm, partner Kaupo Lepasepp, and counsel Kadri Härginen.