Elering is to Invest 450 Million Euros in the Estonian Electricity System

Elering is investing a total of nearly 450 million euros in the security of supply in Estonia over the next five years. The company’s priority projects are the major investments in the EstLink 2 cable and the emergency reserve power station, but it is also focusing in the coming years on two major domestic high-voltage line routes, Tartu-Viljandi-Sindi and Harku-Lihula-Sindi, which will help guarantee consumers a strong national grid within Estonia.

The company’s investment budget for 2012-2016 has been approved by the supervisory council at 450 million euros. Elering believes that the planned investment in the grid will ensure that there is security of supply at all times for network operators, and that this will mean that consumers can be sure of a high-quality supply of electricity.

The new high-voltage line connecting Tartu to Sindi and Sindi to Harku will complete a strong circuit that will supply western and northern Estonia. Such solid circuits mean that there is a much lower risk of large areas suffering power cuts because of a fault in one part of the electricity grid. The improvements to the grid also make it easier for additional electricity producers and consumers to join the grid.

Taavi Veskimägi, the CEO of Elering, explained that a supply of electricity to Estonia consumers that meets the quality requirements at all times can be ensured by spending just the funds coming in from the network tariff on maintaining and developing the grid. “There is no way that we can make savings on our investments in the grid, because the social and economic costs of a shortage of connections, poor quality electricity, and long and frequent power outages would be much greater for us as a society. Some 95% of the financial level of Elering’s investment in the grid is decided by the nature of electricity and by technology, and all investments are put out to tender where the key criterion for winning the tender is the lowest bid price. This means we can achieve our goals for grid development work at the lowest possible cost to consumers,” he said.

The investment budget that has been approved covers the renovation of 27 substations in the next few years and the building or renovation of 350 kilometers of lines. Elering will invest a total of 12 million euros in improving the security of supply to the islands of Muhu, Saaremaa and Hiiumaa, replacing the worn-out cable between the mainland and Muhu by 2012 with a much more powerful cable and by building a cable across the strait from Muhu to Saaremaa. The investment budget also covers the replacement of some of the old overhead lines in Tallinn that are in bad condition with underground cables in a project that was started in the middle of last year. It is planned that almost 40 km of overhead lines will be replaced at a total cost of around 17 million euros.

The work to connect the Estonian and Nordic electricity systems through EstLink 2, the second undersea cable between Estonia and Finland, is on schedule and the new 650 MW connection is expected to come into operation at the beginning of 2014.

The emergency reserve power station that Elering is building and that should be ready at the end of 2014 at a cost of 135 million euros will ensure that there is electricity in the system even if production or transmission capacity suddenly drop out. The emergency reserve is being bought from the Latvian electricity producer Latvenergo until the end of 2013.

The investment budget decided by Elering is based on the role of the TSO as defined in the Estonian electricity industry development plan to 2018 approved by the Estonian government, and on the levels of investment agreed by the Estonian Competition Authority. Elering plans its work on the basis of the general public interest in ensuring the technical operation of the electricity system, the security of supply and the requirements of a functioning electricity market.

Read more on Elering’s investment in the Estonian electricity system here.