Baltic, Energy, Energy Market, Estonia, Good for Business, Investments

The investments in the synchronization project are divided into three stages. In the first stage, Estonia, Latvia and Lithuania will upgrade their domestic transmission networks. In Estonia, 330 kilovolt transmission lines starting in Narva and heading to Latvia via Valga account for most of the investments of the project's first stage. The estimated size of the investments of the first stage is 187.7 mln euros, the Estonian transmission system operator Elering said.

The CEO of Elering, Taavi Veskimagi, said that renewal of these transmission lines that are nearing the end of their useful life will enable to strengthen the north-south power link.

"Joining the electricity system of Continental Europe should mean for Estonian consumers lower network fees in the future as a result of the EU co-financing that is being sought, compared with when the present situation would continue. The said investments into the modernization of the Estonian electricity system would have to be done also if we were to continue as part of the electricity system of Russia," Veskimagi said.

As part of the project, Elering will reconstruct the Baltic Power Plant-Tartu, Tartu-Valmiera and Viru-Tsirguliina 330 kilovolt overhead lines, overhaul control systems and install new voltage stabilization equipment. The overhaul will increase the throughput capacity between Estonia and Latvia by 700 megawatts.

The three Baltic countries are asking for 432.5 million euros in funding for this stage of the project, which is estimated to cost 1.5 billion euros in total. The EU is expected to cover 75 percent of the cost.

The European Commission is expected to decide about the financing application in 2019.

The approved technical scenario calls for synchronizing the Baltic grids via the existing LitPol Link interconnection between Lithuania and Poland and a new submarine cable between the two neighboring countries, as well as for installing synchronous compensators at hydro power plants in the three Baltic states, officials in Lithuanian said.

The three Baltic countries and Poland signed a political agreement on the power grid synchronization in late June and their transmission grid operators filed an application for the synchronization in September. The project is expected to be completed in 2025.

The Baltic grids are still part of the post-Soviet BRELL ring, which also includes Russia and Belarus, and remain dependent on the control center in Moscow and the Russian electricity system.