Elering files application for 111 million euros in synchronization investments

Together with the TSOs from Latvia, Lithuania and Poland, Elering has filed an application to the national energy regulators for approval of the Connecting Europe Facility investments necessary for joining the Continental Europe frequency area.

With the investments in the second phase of the process of joining the Continental Europe frequency area, Elering is planning to establish two synchronous compensators and to improve the control systems for EstLink 1 and 2, the existing power connections between Estonia and Finland. In total in this investment phase, Elering is planning to invest 111 million euros for improving the Estonian electricity system. Elering received EU support for the first phase of synchronization-related investments last year. The first phase of investments totalled 187 million euros, of which the EU will underwrite 140 million euros. The principal part of the investment will be spent on renovation of high-voltage lines leading from the Narva region to Latvia via Valga. The first phase of investment into synchronization and the previously agreed Balticconnector gas connection project are unique in terms of meriting the highest possible aid intensity – 75 per cent. “In the last seven years, Elering and partners have involved a total of nearly 560 million euros of EU funding for strategic energy projects. This amount supplements the general support package allocated by the Estonian state,” noted the chairman of Elering’s management board, Taavi Veskimägi.

After the approval of the investment application and obtaining a decision on distribution of cross-border costs from the energy regulators of the four countries, the TSOs are expected to submit the financing application to the Connecting Europe Facility (CEF) next spring. The investment application specifies that 1.2 billion euros will be required for the power grid synchronization projects in the four countries and the TSOs are seeking 75% -co-financing from the EU. It is planned that each TSO will finance solely the investments that must be made in its respective country and there will be no additional sharing of costs between countries. Veskimägi says that the co-financing from the EU will make it possible to significantly improve the Estonian electricity system from the technical perspective, which will allow Estonia to join the Continental Europe frequency area as well as to keep the lights on in Estonia should the Baltic power system find itself cut off from major electricity systems. "In the next five years, we will invest significantly into the ability of the Estonian power grid to work independently. Thanks to European Union support, we can do so in a manner that does not raise the Estonian electricity system’s network charge,” said Veskimägi.

The Baltic states plan to connect their electricity systems to the continental European frequency area by the end of 2025.