Power grid company Elering to invest €111 million with help of EU funds

Elering CEO Taavi Veskimägi.
Elering CEO Taavi Veskimägi. Source: Siim Lõvi/ERR

Estonian transmission system operator Elering plans to invest €111 million in Phase 2 of a project synchronizing the power grids of Estonia, Latvia, Lithuania and Poland, with those of the rest of the European Union, Baltic News Service reports. Phase 1 of the same project was primarily funded by the European Union.

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

In the case of Estonia, Elering plans to establish two synchronous compensators (devices used for providing fast-acting reactive power on high-voltage electricity transmission networks), as well as improving the Estonia-Finland electricity interconnections Estlink 1 and 2, the company announced on Tuesday.

Phase 1 of the synchronization investments received EU approval last year, with Estonia's component costing €187 million (€140 million of which is EU funds).

The bulk of Phase 1 involves reconstructing high-voltage power lines to run from the Narva area 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.

Should the investment application get the go ahead from energy regulators, the financing application to the CEF will be the next stage, likely to take place next Spring, BNS reports.

Synchronization across the Baltic States is likely to cost €1.2 billion, with all the states involved aiming to get 75 percent of that financed by the EU, with no cost sharing between countries taking place.

Elering CEO Taavi Veskimagi said that EU co-financing by the EU facilitates significant technical improvements to the Estonian electricity grid, enabling it to join the continental Europe frequency area while at the same time safeguarding power supply in the event of severances from major power systems.

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

Elering and its partners have received close to €560 million in EU funding for strategic projects in recent years, BNS reports, on top of overall EU support.

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Editor: Andrew Whyte

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