- The European Commission agrees to put 100 million euros into the EstLink 2 capital project
On 8 July 2010 the European Commission officially took the long awaited decision to invest 100 million euros in the construction of the EstLink 2 cable between Estonia and Finland.
EstLink 2 is a joint development project with the Finnish electricity system operator Fingrid. The planned cable will have a capacity of 650 Megawatts (MW) and will cost a total of around 320 million euros, making it the largest ever single investment in the Estonian electricity system. Half of the construction of the EstLink 2 cable will be financed by Elering and half by Fingrid Oyj. The European Union will put 100 million euros into the capital investment project meaning Elering’s investment will be around 1.7 billion kroons.The cable is expected to become operational in early 2014 and will raise inter-regional transmission capacity to around 1000 MW. From 2014, once EstLink 2 is operational and Nordic market organisation rules have finally been adopted, it will be possible to talk about a single Nordic-Baltic power market. Chairman of the Elering board Taavi Veskimägi said that the new connection will make it possible for Nordic power producers to enter the Baltic electricity market, and for our producers to sell their electricity in a much bigger market. “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”, he added. Fingrid and Elering have been preparing for the new direct current link for three years and the work is running to schedule. All of the construction permits for the underground cable in Estonia have been obtained and almost all of the land use agreements have been signed with landowners. The Ministry of the Environment has granted a special water use licence for the undersea cable construction. Fingrid confirmed its financing of EstLink 2 on 20 May 2010. The cable project is dependent on the newly-opened electricity market launching successfully and investment support of 100 million euros from the European Union.