European Commission endorses Estlink 2 investment

The European Commission made an official decision on July 8 to invest 100 million euros in the construction of Estlink 2, the second undersea electricity cable between Estonia and Finland.

Estlink 2 will be built by the Estonian transmission network company Elering together with the Finnish electricity system administrator Fingrid, Elering announced on Monday. The cable has a projected capacity of 650 megawatts and the total cost of the project is close to 320 million euros, making it the largest investment made for the Estonian electricity system, Elering said.

The construction of Estlink 2 will be financed half and half by Elering and Fingirid, with the European Commission contributing up to 100 million euros. After that the size of the investment by Elering will be approximately 1.7 billion kroons (EUR　109 mln).

The link is planned to be operational at the beginning of 2014.

The new cable will boost inter-regional transmission capacity to nearly 1,000 megawatts (MW) and after the completion of Estlink 2 together with the full adoption of Nordic market organization　rules by then it will be possible to speak of a common Nordic-Baltic electricity market starting from 2014.

The CEO of Elering, Taavi Veskimagi, said that the additional link will enable Nordic electricity producers to enter the Baltic electricity market and our producers to sell electricity on a significantly bigger market.

"More producers, more interconnections, an open competitive market - all this means better price for electricity and thus a more competitive economic environment in Estonia. Definitely stepped-up competition will make also the present sellers make their activity more efficient and customer-friendly," he added.

Fingrid and Elering have been making preparations for the second direct current link between Estonia and Finland during three years and work is going on as planned. The construction permits necessary for building an undersea cable have been issued in Estonia and land use agreements with private landowners have been concluded in most part.

An application for a permit for special use of water has been filed with the Ministry of Environment.

Fingrid made the financing decision as regards Estlink 2 on May 20 this year.

The Estonian and Finnish primary transmission system operators a month ago announced a common procurement for the components that are necessary to build 145 km of undersea cable, 12 km of land cable and converter substations.

The total capacity of Estlink 2 will be 650 MW. Currently there is a 350 MW submarine cable link between Estonia and Finland. By comparison, Estonian peak consumption is around 1,600 MW and the minimal consumption during the summer period decreases to around 400 MW.

Baltic News Service