Energy security in the Baltic States will improve greatly thanks to a 650 MW power cable linking Estonia and Finland to be built with European Investment Bank (EIB) support. An EUR 75m loan signed today with Estonian grid operator Elering will provide part of the financing for the project.
Estlink 2 will connect Estonia and Finland by an undersea cable and will also include onshore converter stations and other installations. It will almost triple transmission capacity between the two countries and is to be completed by 2014.
With electricity consumption in Estonia increasing by an annual average of 2 to 3 percent, ensuring adequate supply is a key priority. This applies also to Latvia and Lithuania. By establishing a higher capacity connection between the Baltic States and Finland and the rest of the Nordic grid, Estlink 2 will lead to less congestion in an existing cable, lower price discrepancies and help ensure supply at peak loads. Estlink 2 is also one of the key projects under the Baltic Energy Market Interconnection Plan (BEMIP) which was launched at the initiative of the EU Commission in 2008.
In addition to the EIB loan, financing of the project will be in the form of a European Union grant, a loan from the Nordic Investment Bank and own resources of Elering and Fingrid, the Finnish grid operator.
“We are glad to support Estlink 2, which will contribute to the planned integration of the Baltic and Nordic energy markets and substantially increase security of energy supply,” said EIB Vice-President Eva Srejber.
“More producers, more connections and an open competitive market all make for the best electricity price possible and a more competitive economic environment in Estonia. Tougher competition will push all current sellers to become more efficient and client service focused,” said Elering board chairman Taavi Veskimägis.
Background:
The mission of the EIB, the European Union’s bank, is to contribute to the integration, balanced development and economic and social cohesion of the EU Member States by financing sound investments. In the Baltic Sea Region, it supports a number of projects of the EU Baltic Sea Region Strategy and its four priorities: sustainable environment; regional prosperity; increased accessibility and attractiveness; safety and security.
Elering is Estonian transmission system operator. Using 110−330 kV high-voltage power lines, it links Estonia’s biggest power stations, distribution networks and corporate consumers in an integral energy system.