EstLink2 is moving towards construction

The Estonian and Finnish Transmission System Operators Elering and Fingrid today signed the final agreements about the construction of EstLink2. EstLink2 will be the second undersea cable between Estonia and Finland, at a cost of 320 million euros. The project will play an important role in the future development of the Baltic electricity market as one where competition works successfully.

EstLink2 should triple the transmission capacity between the Baltic and Nordic states by adding 650 MW to the current 350 MW. The new connection will start working in 2014.

Preparation work for the undersea cable has so far gone according to schedule. The project expects to get all the necessary official approvals during this year. It is also hoped that agreements will be signed with all the project’s major participants during 2010.

The European Commission, which is putting 100 million euros into the project, has already paid its first instalment.

“In the next month and half all the important preparatory work for the EstLink2 project will be completed. EstLink2 is an example of a major project that is required to meet the needs of the electricity market. At things stand, higher transmission capacity is essential for making cross-border electricity trading function more smoothly, and so that the market could make maximum use of the different production capacities in different countries”, said Taavi Veskimägi, Chair of the Elering board.

“The second undersea cable between Estonia and Finland is a good example of partnership on many levels, including by politicians, various state authorities, grid operators and others connected with the electricity market”, said head of Fingrid Jukka Ruusunen of the current status of the EstLink2 project.

The power exchange of the Nordic countries started operating in Estonia at the start of April, and since the start of autumn 2010 the electricity market has been using the whole capacity of Estlink 1. The former Estlink price area was renamed as the Estonia price area from October, and in October Estonia joined the intra-day electricity market Elbas, which allows market participants to buy and sell electricity for the same day. This has already made the functioning of the market much more flexible.