Elering to receive 141 million euros from European Union for synchronization investments

The coordination committee of the Connecting Europe Facility decided on Wednesday to approve Elering’s request for co-financing of a maximum 75 per cent of the expenses planned in the first phase of the synchronization of the Estonian electrical system with continental European frequency area. The decision will guarantee that the synchronization will not result in a rise in network fees for Estonian consumers when the country leaves the Russian frequency area.

“The CEF’s decision shows the importance of the synchronization project for the EU’s energy security and the quality of the financing application submitted. Seventy-five per cent is the highest possible support rate. I’m truly proud that Elering has succeeded during the last seven years to raise, outside the support channelled to the Estonian government from the European Union and along with its partners, close to 560 million euros of critical projects for the Estonian security of supply such as EstLink 2, the Estonia-Finland gas connection Balticconnector, and now, the investment into the first phase of the synchronization project, said Taavi Veskimägi, the chairman of the Elering management board.

“I’d like to thank Elering’s employees and my Baltic colleagues for preparing the financing application, and also thank the European central TSO body ENTSO-E and the European Commission’s officials for supporting a project so strategically important for us,” said Veskimägi.

The first phase of the synchronization investment includes works to be performed on Estonian territory, for renovating 330 kilovolt overhead lines that start in the Narva area and lead to Latvia via the Valga area, and for establishing voltage regulation equipment.

In the first phase of the synchronization project, Estonia plans to invest close to 188 million euros, of which the support from the CEF approved by the recent decision will cover 141 million euros. The remaining 47 million euros will be covered by Elering itself and Elering has already earmarked these funds, having raised them from auctioning off cross-border transmission capacity.

Without desynchronization, Elering would have to invest at least 222 million euros into renovation of the power grid in the decade ahead. “In light of today’s decision, it can be stated quote confidently that the synchronization project will reduce the network fees for Estonian consumers compared to a situation where we would continue as part of the Russian electrical system and have to make all investments from transmission tariffs,” said Veskimägi.

The Baltic states’ goal is to synchronize their electrical systems with the continental European frequency area by the end of 2025.