{"id":1763,"date":"2026-02-16T10:37:57","date_gmt":"2026-02-16T08:37:57","guid":{"rendered":"https:\/\/www.diotech.ee\/?p=1763"},"modified":"2026-02-16T10:40:54","modified_gmt":"2026-02-16T08:40:54","slug":"major-milestone-for-estonias-energy-sector-as-largest-domestic-battery-energy-storage-system-project-breaks-ground","status":"publish","type":"post","link":"https:\/\/www.diotech.ee\/en\/major-milestone-for-estonias-energy-sector-as-largest-domestic-battery-energy-storage-system-project-breaks-ground\/","title":{"rendered":"Major Milestone for Estonia’s Energy Sector as Largest Domestic Battery Energy Storage System project breaks ground"},"content":{"rendered":"

\"\"<\/a>Diotech O\u00dc and Transcom AS will commence construction in February 2026 of a 100 MW \/ 200 MWh battery energy storage\u00a0system (BESS)\u00a0facility in Tsirguliina, Valga County. Project Zirgu represents the largest 100% Estonian capital-based battery industrial park, designed to help balance the Estonian and Baltic electricity markets and mitigate regional power price volatility.<\/span><\/b>\u00a0<\/span><\/p>\n

According to Mart Moora, Member of the Management Board of Diotech O\u00dc<\/span><\/b>\u00a0and project lead, the Zirgu development in\u00a0Valga county\u00a0marks a significant step in structurally strengthening Estonia\u2019s energy system at a time when the rapid expansion of renewables and the evolving security environment require large-scale investments in dispatchable capacity and flexible electricity infrastructure.<\/span>\u00a0<\/span><\/p>\n

\u201cThe\u00a0battery\u00a0energy\u00a0storage\u00a0system\u00a0will increase system flexibility, reduce price fluctuations and support grid stability in a context where the share of renewable energy is rising and system management is becoming increasingly critical,\u201d Moora said.<\/span>\u00a0<\/span><\/p>\n

He added that the Zirgu\u00a0BESS project\u00a0addresses the growing structural imbalance in the Estonian and Baltic electricity markets. Although smaller and mid-sized storage solutions have entered the market, their system-level impact has so far remained insufficient. The Tsirguliina project is designed as a large-scale, rapidly expandable industrial park aimed at delivering a measurable stabilising effect on the electricity market.<\/span>\u00a0<\/span><\/p>\n

\u201cThere is an insufficient volume of dispatchable generation assets in the region with competitive input costs. As a result, price spikes hit consumers hard, while zero and negative prices undermine the business models of renewable energy producers. Large-scale battery storage is one of the fastest mitigation measures with tangible impact, capable of reducing market volatility within one to two years,\u201d Moora explained.<\/span>\u00a0<\/span><\/p>\n

Estonian capital-based development framework enables rapid execution<\/span><\/b>\u00a0<\/span><\/p>\n

The development was sold to Zirgu Bess O\u00dc by LignaMets O\u00dc. According to the seller, the decisive factors in the transaction were the local buyer team\u2019s clear vision, execution capability and readiness to implement the project on schedule. In the seller\u2019s assessment, Zirgu Bess O\u00dc demonstrated firm commitment and a realistic understanding of the project\u2019s time-critical nature and associated obligations throughout the process.<\/span>\u00a0<\/span><\/p>\n

\u201cThere was also interest from foreign investors. Negotiations were at times challenging and highlighted how different business cultures and attitudes towards project timelines can be. We sold the development project to Zirgu Bess O\u00dc because cooperation with them was smooth, efficient and constructive \u2013 they had the motivation, financing, practical experience in delivering battery projects in Estonia, and a clear action plan. Overall, we are pleased that both the development and the associated added value will remain with local entrepreneurs,\u201d said\u00a0<\/span>Mihkel Nukka, representative of LignaMets O\u00dc<\/span><\/b>.<\/span>\u00a0<\/span><\/p>\n

According to\u00a0<\/span>Paul-Kristian Padrik, shareholder of Diotech<\/span><\/b>, a development framework has been established for project implementation. Zirgu has secured a high-voltage grid connection from Elering, the required land plots, construction permits and completed\u00a0permitting procedures, enabling systematic construction works to begin immediately from February. The capital required for the initial investment has been contributed by the shareholders of Diotech O\u00dc and Transcom AS.<\/span>\u00a0<\/span><\/p>\n

\u201cThe project is fully executable based on the current equity financing. At the same time, we are analysing additional financing options to optimise the capital structure and to develop subsequent projects in parallel,\u201d said Paul-Kristian Padrik, shareholder of Diotech O\u00dc.<\/span>\u00a0<\/span><\/p>\n

In the first phase, a 100 MW \/ 200 MWh battery energy storage facility will be constructed. The high-voltage grid connection and substation infrastructure will be built to allow, subject to sustained market demand and price volatility, an expansion of the complex within 6\u20139 months to up to 200 MW of capacity and 800 MWh of storage, which would make it the largest battery power plant in the Baltics.<\/span>\u00a0<\/span><\/p>\n

Zirgu Battery Energy Storage System\u00a0to be\u00a0Completed by March 2027<\/span><\/b>\u00a0<\/span><\/p>\n

Lead technology delivery timelines enable the first phase to enter the market no later than March 2027.<\/span>\u00a0<\/span><\/p>\n

Technology selection and delivery scheduling are based on prior cooperation with LG Energy Solution, with whom Diotech previously developed, within a similar timeframe, what was at the time the largest battery power plant in the Baltics for Eesti Energia, connected to the grid prior to the Baltics\u2019 desynchronisation from the Russian electricity system.\u00a0<\/span>
\nIn addition, Diotech is currently developing, in cooperation with LG Energy Solution, Europe\u2019s largest battery energy storage facility to date in Poland, with a capacity of approximately 900 MWh.<\/span>\u00a0<\/span><\/p>\n

\u201cThe success of such projects depends on whether the team has real-life experience in managing the entire process \u2013 from grid connection and supply chain coordination to construction management, equipment testing and commissioning. These competencies are in place in the Zirgu project, and therefore the target completion date in Q1 2027 is achievable,\u201d said\u00a0<\/span>Kaspar Kokk, representative of Transcom AS<\/span><\/b>.<\/span>\u00a0<\/span><\/p>\n

Kokk added that the Zirgu project in Valga County is guided by the principle that local companies, in cooperation with the state, must play a key role in ensuring the balance and security of supply of Estonia\u2019s electricity system.<\/span>\u00a0<\/span><\/p>\n

The objective of the project is to reduce price volatility and strengthen market stability in a manner that serves the interests of Estonian households and businesses while retaining the created economic value within Estonia.<\/span>\u00a0<\/span><\/p>\n

Zirgu Battery Energy Storage System\u00a0project<\/span><\/b>\u00a0<\/span><\/p>\n

The objective is to develop a battery industrial park with up to 200 MW of capacity and 800 MWh of storage;<\/span>\u00a0<\/span><\/p>\n