Cablegate: Nordic-Baltic Electricity Cable Up and Running

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RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHTL #1090 3451529
ZNR UUUUU ZZH
R 111529Z DEC 06
FM AMEMBASSY TALLINN
TO RUEHC/SECSTATE WASHDC 9329
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHMO/AMEMBASSY MOSCOW 2463

UNCLAS TALLINN 001090

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ENRG PREL FI EN

SUBJECT: NORDIC-BALTIC ELECTRICITY CABLE UP AND RUNNING

1. On December 4th, simultaneous inauguration
ceremonies took place in Estonia and Finland opening
the Estlink electric power cable between the two
countries. The Estlink submarine cable, finished
roughly five months ahead of schedule, marks the first-
ever linkage of the Baltic and Nordic power grids.
Estlink's capacity current is 350 MW. The current plan
is for energy to flow from Estonia to Finland;
Estlink's capacity can meet approximately 2% of Finnish
electricity demand. It is possible, however, to send
power in either direction. According to Einari Kisel,
Director of the Energy Department at the Estonian
Ministry of Economic Affairs and Communication (MOE),
Estlink's capacity could meet 100% of Estonia's
electricity needs during off-peak demand in the summer,
or roughly 1/3 of peak demand during the winter.

2. In planning and financing stages for over six
years, the opening of the Estlink cable increases the
number of energy supply choices available to Estonia
and connects the Baltic energy network with that of the
EU. While EU funds paid for the Estlink feasibility
study in the late 1990s, financing for the final EUR
110 million (USD 146.3 million) project came solely
from the three Baltic power companies Eesti Energia
(40%), Latvenergo (25%), Lietuvos Energija (25%), as
well as Pohjolan Voima and Helsingin Energia (10%) of
Finland.

3. At a July 2006 conference on EU-Russia Energy
Relations in Tallinn, Andris Kesteris, spokesman for EU
Energy Commissioner Andris Piebalgs (who attended the
December 4 inauguration), said that Estlink is one of
the best examples of cooperation in energy markets.
Also, MOE's Einari Kisel told us that the cooperation
displayed by the three Baltic energy companies on the
Estlink project could be a model for further progress
on the planned replacement of the Lithuanian nuclear
power plant at Ignalina. This project, however, will
be privately financed, as opposed to the much smaller,
publicly financed Estlink project.

4. Comment: Though a modest step towards greater
energy independence for Estonia, the opening of the
Nordic-Baltic Estlink cable serves as a successful
example of effective partnership between the two
markets. End comment.

WOS

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