Estonian Competition Authority

Press release: The Estonian Competition Authority and the Public Utilities Commission of Latvia agreed on a project of additional electricity connection

The Estonian Competition Authority and the energy regulator of Latvia concluded an submitting a project of an additional electricity connection between Estonia and Latvia to the European Commission. The transmission networks of both countries, Elering and AST, have made a prior agreement on the project. The total cost of the project is nearly 178 million euros (75 million in Estonia and 103 million in Latvia) and EU co-financing in the amount of 133 million euros is being applied for.

Taking account co-financing, Elering should pay nearly 19 million euros from the total costs of the project. The construction of the planned electricity connection is made up of two phases. The first phase includes building a 330 kV power line from the 330 kV substation of Harku to the 330 kV substation of Sindi. The second phase includes building a power line from the 330 kV substation of Kilingi-Nõmme to the border between Estonia and Latvia and from there onwards towards Riga. The project will be completed in 2020.

"Building an additional connection is a very important development both for ensuring energy security and for integrating the entire Baltic electricity market to that of the Nordic countries," said Mr Märt Ots, Director General of the Competition Authority when commenting the significance of the agreement. "With this, we could eliminate the current congestions on the electricity connections between Estonia and Latvia. While there are sufficient power production capacities today in Finland and Estonia, there is a lack of capacities in Latvia and Lithuania. Also, natural gas makes  the production of electricity there more costly. That is why today electricity moves from the north to the south, i.e. from Finland and Estonia to Latvia and Lithuania," added Mr Ots.

Within the framework of energy-related common interest projects, building of additional electricity and gas connections is being financed. The Estonian-Latvian electricity connection project is one of the first projects that has been approved by regulators and for which a funding application has been submitted to the European Commission. There are plans to use similar funding sources for financing the building of BalticConnector, a gas connection between Estonian and Finland, and a liquefied gas terminal.