Elering to Start Collecting Funds Towards Building the Third Line Between Estonia and Latvia

Parallel to submitting an application for EU financial support for the Tallinn-Riga electricity line, Elering is also starting to collect money itself for the construction of the line as well as renovating other lines running towards Latvia. Elering will be henceforth channelling transmission capacity allocation revenue directly into increasing transmission capacities in the Estonian electricity system on the north-south axis.

Elering and the Latvian transmission system operator Augstsprieguma tikls (AST) are preparing a grant application for the call of proposals of the Connecting Europe Facility programme closing in August. The Estonian-Latvian third line project has been included in the list of Projects of Common Interests (PCI) which the European Union intends to fund with 750 million euros . The investment request, basis for the grant application, has already been approved by the Estonian and Latvian regulatory authorities.
According to Elering’s CEO Taavi Veskimägi, electricity lines will not only need to be built across the country borders, but also the domestic electricity grid will need to be reinforced in order to increase interconnection capacities. „At the end of last year Elering acquired EstLink 1 and the second interconnection between Estonia and Finland, EstLink 2, also became operational. As a result of these events the use of the Estonian electricity grid for north-south power trade through interconnections has increased significantly.“

„The vision is to build a cross-Baltic transmission capacity corridor with commercial capacity of at least 1000 MW reaching from the Finnish-Estonian border to the Lithuanian-Polish border. The corridor, together with the Lithuanian-Swedish interconnection soon to be completed, will finalize the process of connecting Baltic electricity markets and will lead the way for linking the Baltics to the synchronous grid of Continental Europe,“ Veskimägi explained.

Among other things in Estonia, the 330 kV electricity lines running from the North East Estonian power plants to Latvia via Valga will need to be upgraded, since they transport most of the north-south electricity flow.

Elering continues to use transmission capacity revenue to ensure the actual availability of capacity allocated on borders during the hours when an unexpected technical problem does not allow to give the agreed amounts of transmission capacity to the market’s disposal (the so called counter trade). 

The ways of using transmission capacity revenue have been set out in the European Parliament and Council Regulation (EC) No 714/2009. So far Elering has taken into account transmission capacity revenues when calculating domestic transmission tariffs – the received profits diminished the transmission tariff. Using the profits in this way is allowed in case they cannot be efficiently used for countertrade or for maintaining and increasing interconnection transmission capacities.

During the first five months of this year, Elering received a total of 11.2 million euros in transmission capacity profits. At the same time, the costs for countertrade during the same period have amounted to over 75,000 euros.