Numerical evaluation of profitability of Estonian electricity-generating technologies

The European Commission's proposals to adjust public intervention, diminish the costs of support and ultimately end support, raised the investors' concerns. Would the cut in the feed-in tariff stop inverters from investing and which effect will be on the already decided investment projects? In order to understand what impact this cut can have, it is important to analyze the profitability of the investments with and without subsidies, taking different uncertainties into account. This analysis evaluates the profitability of the investments of the existing and the new generation technologies in the Estonian electricity market for 2020 under different scenarios. The profitability and competitiveness of the generation technologies were evaluated through market modelling, which allows to take into account the influence of the market development and the competition of the technologies in the whole region. The profitability was estimated by the difference between generation costs of electricity and market price. Analysis gives information about how different uncertainties influence the profitability of the investments. Moreover, it provides the policy makers with data that can be used for the support scheme correction. Depending on CO
₂
policy and market development the subsidies can be still needed for some technologies.