The Finnish and Estonian transmission system operators are moving closer to a firm plan for the construction of a second DC link between the two countries.

TSOs Fingrid and Elering have signed a preliminary agreement regarding the construction of EstLink 2, which will have a capacity of 650 MW and cost around EUR300 million.

The two companies say that preliminary planning for the project has progressed swiftly and that a final agreement will be signed after a decision is made on the capital investment. This will depend on the opening of the wholesale electricity market in Estonia and the provision of EUR100 million of financing for the project from the European Union.

“EstLink 2 is an important step in our vision of creating a common Baltic Sea region electricity grid,” said Fingrid CEO Jukka Ruusunen. “It gives benefits to the whole region in the form of increased security of supply and more efficient electricity market. The grid is also needed to meet the climate targets of the countries around the Baltic Sea.”

At present, there is one 350 MW direct current connection between Finland and Estonia. The new transmission link would raise the total electricity transmission capacity between the countries to approximately 1000 MW.

EstLink 2 would be brought into commercial operation by the end of 2013 at the earliest, says Fingrid.