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1.7.2007 00:00

Border tariffs are abolished from electricity trade between Finland and Estonia

Border tariffs are abolished from electricity trade between Finland and Estonia. Estonia joins an European mechanism, which compensates transit costs caused by power transmission between countries. As a consequence Fingrid, the Finnish transmission operator has removed the fees on imports and exports over Estlink cable as of June 1st.
The Estonian TSO Põhivõrk joined today the transit compensation mechanism of European TSO association ETSO. The purpose of the system is to compensate costs for those TSOs which are hosting transits through their network. The operators pay to a joint fund and receive remuneration from it according to what extent the countries cause transit to each other.

Transit mechanism has allowed abolition of export, import and transit fees from the borders of most EU countries. Now this happens on the Finnish-Estonian border. Other Baltic countries, Latvia and Lithuania, did not join the system, yet.
"Removal of cross-border fees is an important step to towards integration of Nordic and Baltic electricity markets, and it has to be seen as a part of European integration as well", says Jukka Ruusunen, CEO of Fingrid. "Opening of Baltic electricity market is still at an early phase. Still the wholesale level trade between and through the countries functions reasonably well. Market integration needs to be developed further where the TSO cooperation of the region plays a key role."

Estlink, the new sea cable between Finland and Estonia became operative in the beginning of this year. Up to 350 megawatts of power can be transmitted over the link in both directions. The link is a merchant line owned by a group of Finnish and Baltic power companies. It doesn´t provide other market players with open access to its capasity. Therefore imports and exports over Estlink continues to pay Fingrid same grid fees as, respectively, domestic production and consumption. Such fees are not charged on the open Nordic interconnectors. Further information: 
Juha Kekkonen, +358 (0)30 395 5120 or +358 (0)40 560 5274