Expert: Estlink-3 connection between Finland and Estonia may be moribund

The Estlink-3 agreement being signed in June this year.
The Estlink-3 agreement being signed in June this year. Source: Elering

Constructing a third Estlink undersea cable between Estonia and Finland only makes sense if it pays for itself within eight years, one expert says. This paying for itself entails parity being obtained in electricity prices to consumer between Finland and Estonia, in the latter case prices are much higher, whereas the growth in offshore wind energy in Estonia might render this obsolete, particularly once security of supply is met, and surpassed, enabling Estonia to export electricity.

Arvi Hamburg, head of the Estonian Academy of Sciences (Eesti teaduste akadeemia) energy committee questioned why, in the current changing circumstances with more solar and wind parks being built at a rapid pace, investment into Estlink-3 makes sense, adding that, in the short term of six to eight years, it might do, but less so thereafter.

"First of all, there is fact that we have access to the very diverse electricity production structure of the Nordic countries - hydro, wind, nuclear and fossil fuels. Looking at the [electricity to consumer] price difference today, for example, between Finland and Estonia, it certainly makes sense in our view to reduce prices," Hamburg said.

Should more domestically produced, wind farm-generated electricity arrive, to the extent that domestic needs are exceeded and from 2030 Estonia is a net exporter of electricity, this would make Estlink-3 even more redundant, Hamburg said.

State Transmission Systems Operator (TSO) Elering inked a memorandum, together with its Finnish counterpart Fingrid, last June (pictured). The memorandum pertained to constructing Estlink-3, which would almost double the transmission capacity currently provided by Estlink-1 and Estlink-2 together.

The connection would link Paldiski with Inkoo, on the North shore of the Gulf of Finland, though former Eesti Energia chief Hando Sutter had said a link running from Finland to Latvia, via the vicinity of Hiiumaa and Saaremaa, would be better in order to link up all proposed wind farms and possibly also solar panel farms in the region.

Elering itself, while it has submitted the construction permit application to the Consumer Protection and Technical Regulatory Authority (TTJA) in respect of Estlink-3, is also mulling whether the connection is really needed.

Outgoing Elering chair Taavi Veskimägi said that this application does not imply ground will be broken on Estlink-3 any time soon, adding that more analysis is required.

"If the prices really harmonize between Estonia and Finland thanks to additional production investments, then of course it does not make sense to build Estlink 3. However, if this price difference continues , then it would definitely be reasonable for the Estonian consumer to allow this cheaper Finnish/Swedish-generated onshore wind energy on to the Estonian market, and to accomplish that, Estlink 3 is definitely needed," he went on.

As reported by ERR News, Elering and German electricity system operator 50Hertz are looking at options for an undersea cable in a diffierent direction, and linking those two nations.

This would offer chances to "increase our export potential here without spending Estonian consumers' money," Veskimägi said in a statement released Tuesday.


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Editor: Andrew Whyte

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