New electricity transmission connection to Sweden is progressing – Energy authorities issued a decision on the project’s cost allocation
The joint project of the transmission system operator Fingrid Oyj and the Swedish TSO Svenska kraftnät for a third cross-border electricity line between the countries was issued a decision on cost allocation by the energy authorities. The transmission line, scheduled to be completed in 2025, will even out the price differences between the countries and improve the sufficiency of electricity.
Fingrid is, in cooperation with the Swedish transmission system operator Svenska kraftnät, preparing a new transmission line from Pyhänselkä in Muhos via Keminmaa to Messaure on the Swedish side of the border. The third 400 kV cross-border connection is based on the need of the electricity market to increase electricity transmission between Sweden and Finland. The cross-border capacity between the countries has at times been inadequate, leading to the electricity market not functioning efficiently and electricity prices diverging between the countries. In an import situation, this has resulted in price increases in Finland. Furthermore, insufficient connections endanger the sufficiency of electricity in Finland in exceptional situations. The third AC connection to Sweden will be completed in 2025.
The joint project of Fingrid and Svenska kraftnät has been included on the European Commission’s list of Projects of Common Interest (PCI). As part of the PCI procedure, the transmission system operators submitted an investment request to the Finnish and Swedish energy authorities last September. On 12 March, the Finnish Energy Authority and the Swedish Energy Markets Inspectorate issued decisions on the project’s cost allocation. The decisions are in line with the cost allocation proposal submitted by the transmission system operators to the energy authorities.
The proposal was based on a cost-benefit analysis, according to which Finland will benefit the most from the project. According to the decision, Fingrid Oyj is responsible for the investments in the cross-border transmission link project that take place in Finland in full and for 80% of the transmission line investments on the Swedish side of the border. A decision on cost allocation by the energy authorities is a prerequisite for EU funding.
“The new AC connection to Sweden is very important for the functioning of the electricity market. In 2019, the transmission capacity was inadequate as much as 40% of the time. This resulted in an increase in electricity prices in Finland”, says Senior Vice President Jussi Jyrinsalo from Fingrid.
Mikko Heikkilä, Manager, Strategic Grid Planning: firstname.lastname@example.org or tel. +358 30 3955 113