This technical assistance report was developed in two stages: initially, an action plan was presented to the Estonian DSO, Elektrilevi, outlining the status and potential options to resolve issues with renewable connections on the Estonian distribution grid, especially on the islands. Subsequently, at Elektrilevi's suggestion, the study focused on flexible connection agreements and their impact on the DSO's business model.
The study’s main findings are:
- Elektrilevi’s 2035 development plan is broadly aligned with the main EU direction on distribution planning.
- Flexible connection should be treated as a selective tool, not as an island-wide solution.
- Real-world external cases support the same conclusion.
- The Electricity Market Act now places stronger weight on the distribution network development obligation, requires development plans to describe flexibility needs, investment plans, and connection possibilities, and gives the DSO a formal route to procure flexibility.
- The business-model issue is real.
The study concludes that the right approach for Saaremaa is not to choose between “business as usual reinforcement” and “full dynamic flexibility”. The better pathway is staged deployment. Begin with simple, auditable FCA products in clearly limited areas, use the suggested methodological hosting capacity analysis to support product design and cost assessments, and then progress toward more dynamic envelopes only when data, controls, and governance are sufficiently developed.