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Elering to invest EUR 111 mln in grid synchronization in Phase 2

BC, Tallinn, 12.11.2019.Print version
Estonian transmission system operator Elering is planning to invest 111 million euros in Phase 2 the project to synchronize the power systems of the Baltic countries with those of Continental Europe

The Estonian TSO and its Latvian, Lithuanian and Polish counterparts have filed an application for the financing of investments from Connecting Europe Facility (CEF) to the national energy regulators for approval. 

As part of Phase 2 investments, Elering is planning to establish two synchronous compensators and improve the control systems of the Estonia-Finland electricity interconnections Estlink 1 and 2, the company announced on Tuesday.

The first stage of the synchronization investments received the EU's nod last year. Estonia's part of that investment is 187 mln euros, of which the EU provides 140 mln euros. Most of that amount is to be spent on the reconstruction of high-voltage power lines starting in the Narva area and running to Latvia via Valga.

The first stage of synchronization investments and the Balticconnector project previously decided upon are unique in that they have been awarded cover for the maximum possible rate of 75 percent of planned costs, Elering said.

After the receipt of the endorsement of the investment application and the decision concerning the division of cross-border costs from the energy regulators of the four countries, the TSOs are expected to file a financing application to CEF presumably next spring. 

The total cost of the Baltic states' synchronization project is 1.2 bn euros and the TSOs will seek EU financing equaling 75% of the amount. In accordance with the plan, each of the TSOs will finance only the investments occurring in the respective country and there will be no additional sharing of costs between the countries. 

Elering CEO Taavi Veskimagi said that co-financing by the EU allows to make significant technical improvements to the Estonian electricity system, enabling the country to join the Continental Europe frequency area, but also to keep up supply should the Baltic power supply system lose connection with the major power systems.

"In the next five years we will invest substantially in the capability of the Estonian electricity system to work independently. Due to EU support we will be able to do it in a way which does not raise the network fees for Estonian electricity consumers," Veskimagi added.

In the past seven years, Elering and partners have raised nearly 560 mln euros in EU funding for strategic projects. That amount comes on top of the general support package allocated for Estonia.

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