But national grid distributor Ellering said it had no plans to connect to Sweden, adding that over time the price difference would even out.
Moreover, the Swedes are currently not interested in new relations with the Baltic states, Elling said.
In an opinion piece published in the online business newspaper Elipaev (link in Estonian), Kissel said that an undersea cable covering much longer distances between Sweden and Estonia is of interest to both countries and their private companies. , suggested that it could probably be the cheapest method. Supplying electricity to Estonia.
The existing Estlink 1 and Estlink 2 cables connect Estonia to the Finnish power grid, with a total connection capacity of approximately 1,000MW. Elering is currently planning his third connection with Finland (i.e. Estlink 3) with a further 700MW of capacity, which is expected to be online until around 2035.
Kissel told ERR that cheap electricity should be enough to change Estonia’s mindset from north to west.
“Considering the fact that electricity prices in Sweden are even cheaper than in Finland, this is the only way to lower electricity prices to Estonia. In any case, most of the electricity generated in Sweden reaches us via Finland. “After all, Sweden itself has always sold electricity to Finns,” he said.
Electricity prices in Sweden averaged around 40 euros per MWh last year, compared to 57 euros in Finland. Estonian electricity prices in 2023 averaged 90 euros per Mwh per year.
“The situation looked even more dramatic considering the coldness of January this year,” Kissel noted.
“At that time, the average electricity price in Estonia was around 126 euros per MWh, while in Finland it was 106 euros per MWh, and in the cheapest Swedish region it was on average 54 euros per MWh per month.In other words, the price was more than double was.”
Sweden currently has electricity connections with Lithuania and Poland, but Kissel said these connections are with southern Sweden, the fourth price region, which typically has the highest electricity prices in the country. It is said to be a high-priced area. “The price level is the same as in Finland, or a little higher,” he said.
Elling: Swedes are not interested in new connections
Elering’s marine network development manager Pritt Heinla told ERR that Kissel’s low price argument is not forward-looking.
Heinla said: “In the future, Estonia will also have significantly more producers of renewable electricity, and consumption in northern Sweden will also increase significantly. This means that over time the price difference will narrow. This means that there is a trend.”
According to Kissel himself, the main argument against the Swedish connection proposal is the view that the existing transmission line between Sweden and Lithuania is sufficient for all three Baltic states.
“But when it comes to relations with Estonia, it’s not really on the table yet. But it’s definitely worth analyzing how much benefit such a project would bring to Estonia. , we also need to talk to the Swedes about other things.’They might be able to get away with it,” Kissel continued.
Meanwhile, Heinla said that Swedes have so far shown no interest in connectivity as they can do well with establishing domestic electricity connections.
He said: “Relations with Sweden have been a subject of discussion but have not materialized. Latvia in particular has expressed interest in relations with the Baltic states, but the Swedish side has not supported the project.” ” he said. Back. Establishing such a connection for the first time requires strong technical and political support from both sides. Within Sweden, there are large price differences between different price regions, but Sweden’s interest is primarily in easing restrictions within its own network. Furthermore, due to the lower energy prices seen there, many high-consumption industries are currently being planned for construction in northern Sweden. ”
Connectivity between Sweden and the Baltic states is also being discussed in the Pan-European Power Network Development Plan, but it is clear that the Swedes’ interest is now in domestic connectivity.
Heinla also said, and as Kissel also pointed out, that Swedish electricity is reaching Estonia anyway.
Heinla said: “Sweden’s challenges with respect to the development of its domestic network are clear and mean that it will also have difficulties establishing connections in a significant capacity with the Baltic states. There are no concrete negotiations on this. It is planned to transit through northern Sweden.” “It is connected to northern Finland by additional overhead lines and submarine cables. Following this, cheaper tariffs will also reach Estonia via Finland without major investments from Estonia.”
Kissel: Swedes may be interested in our wind and solar energy
Mr. Kissel’s suggestion also raises the question of why the Swedes would be interested in a connection that would provide mainly expensive electricity on the other side (i.e. Estonia), which could result in higher prices in their own country. It also raises questions.
According to Kissel, Estonian electricity currently does not have a significant impact on Swedish prices. In fact, Estonia’s offshore wind farms could provide cheaper electricity in the future, he said.
“The same applies to solar energy. Prices could actually fall further. This is one of the interesting aspects for Swedes. And another is that until now Swedish electricity retailers are Finnish “We are selling electricity to Estonia, but that means we get less electricity than we would get if we sold that electricity to Estonia, for example,” Kissel said.
Heinla said changing the decision in Sweden’s favor would mean construction of a third undersea connection would be delayed for many more years.
“Estlink 3 was included in the European Grid Development Plan four years ago. It is also included in the list of European projects of common interest and a memorandum of cooperation was signed.” [Finnish grid distributor] There was political support for the connection with Fingrid.
“When you start changing a project this drastically, the impact can be measured in years, and it’s no longer the same project,” he added.
Estlink 2 was established under free market conditions as an additional connection with Finland was needed. Heinla points out that it’s a similar story for Estlink 3.
Ellering: Just laying the cable would cost many times more.
According to Kissel, the significantly lower electricity prices currently found in Sweden means that even if the construction of the Swedish connection turns out to be more expensive than the Finnish connection, the former connection will still be profitable. It is said to mean deaf.
Kissel said: “Considering that the majority of all international submarine cables are financed by up to 80% EU funds, the resulting price difference is actually not that large. Figuratively speaking, as a result, Even if it comes down to 2 or 3 euros per megawatt hour, the price will add up, but economically speaking it’s a clear win, as you can now get power for 20 to 30 euros cheaper overall per megawatt hour.” He said.
Heinla did not want to speculate on how much the total cost of the connection between Finland and Sweden would be different, but he said the lengths of sea cables are comparable, and the cost of laying the cables is 2 million yen per kilometer. It will cost euros.
The Finland-Estonia cable will be approximately 100 kilometers long, or cost 200 million euros. The cable between Sweden and Estonia will be 700 kilometers long and will cost 1.4 billion euros.
“Therefore, the price divergence is clear. Even if the EU were to provide significant support to the project, the potential impact on prices would be difficult to assess without a full-scale analysis. “Whether this makes sense for society at all,” Heinla said.
When asked how much transmission capacity the envisaged Swedish connection would have, Kissel put the figure at around 500MW.
“A lot depends on how economically profitable it is and, on the other hand, what the potential is for an offshore wind farm in Estonia, for example, with a capacity of 500 MW. “You can speculate about cables that have that, but it’s definitely not a calculated option,” he said.
Estlink 3 will have a capacity of 700MW. Heinla pointed out that this is a limitation due to the special nature of the Baltic countries’ power systems.
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