EU, Baltic states, Poland agree €720 million network synchronisation deal

Mateusz Morawiecki, Gitanas Nausėda, Ursula von der Leyen, Jüri Ratas and Krišjānis Kariņš, from left to right.
Mateusz Morawiecki, Gitanas Nausėda, Ursula von der Leyen, Jüri Ratas and Krišjānis Kariņš, from left to right. Source: European Commission.

The European Union, Latvia, Lithuania, Estonia and Poland have reached a deal worth €720 million for the second phase of the electricity synchronisation programme which will see the Baltic countries join the European grid.

On Thursday (October 1), the coordinating committee of the Connecting Europe Facility (CEF) of the EU Infrastructure Network agreed to allocate the maximum possible funding to the key projects of synchronisation of the Baltic States with the continental Europe grid.

Following the application of the transmission system operators of Lithuania, Latvia, Estonia and Poland, € 719.7 million will be issued in funding to support the smooth implementation of infrastructure projects.

This will allow the Baltic States to start operating on the same frequency as Poland and other continental European countries by 2025. The Baltic states are currently connected to the Russian BRELL network. The EU is funding 75 percent of the project and work has already started on synchronisation.

In total, €493 million has been allocated for the construction of the Lithuanian-Polish interconnector Harmony Link, the installation of synchronous compensators in Lithuania, Latvia and Estonia will be supported with €166.5 million.

The remaining part is awarded for the modernization, development and enforcing of the local grids required for the integration of the Harmony Link interconnection.

All together four transmission system operators PSE (Poland), Augstsprieguma tikls (Latvia), Elering AS (Estonia) and Litgrid (Lithuania) received the majority of this year's total CEF budget for energy projects, which totals €979.6 million.

The European Commission allocated €55.5 million to Elering to co-finance synchronization investments.

Taavi Veskimägi, CEO of Elering said: "We have been very successful in mobilizing European Union funds and have secured a maximum grant rate of 75 percent from the European Commission, both in the recent and in the previous call. We can now turn our attention to the realization of investments in order to be ready for synchronisation by the end of 2025, as previously planned."

In total, Elering has involved more than €700 million of EU funds in energy infrastructure projects, which have come to Estonia in addition to general EU subsidies.

Elering will use the allocated money primarily for the construction of synchronous compensators. The company is in the process of public procurement for the construction of three synchronous compensators at the Viru, Püssi and Kiisa substations, respectively. The deadline for tenders is in the second half of October.

The synchronisation project is important for the creation of a common European electricity market, ensuring secure electricity transmission. It will also have the effect of closer economic cooperation

Prime Minister Jüri Ratas (Center) wrote on Twitter that this is an "important step towards greater energy security in the region and reaching EU green deal objectives."

Ratas said in a statement that Estonia is very pleased an agreement has also been reached on the conditions of electricity trade between the Baltic States and third countries.

On September 24, the Baltic states reached an agreement on the principles of electricity trade with non-EU countries after the switching on of the Astravyets nuclear power plant in Belarus. 

The agreement is estimated to halve the trade between the Baltic States and third countries and divert trade to the Russia-Latvia cross-section. The agreement is valid until the synchronization of the Baltic electricity networks in 2025.


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Editor: Helen Wright

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