Fingrid granted permission to build a transmission line between Finland and Sweden
The Ministry of Economic Affairs and Employment has granted Fingrid Oyj a permit to construct a transmission line of 400 kilovolts that will cross the border between Finland and Sweden. The interconnector would increase the transmission capacity between Finland and Northern Sweden from Sweden to Finland by 800 MW and from Finland to Sweden by 900 MW.
“The new interconnector between Finland and Sweden is important for ensuring the transmission of electricity and for the development of the Nordic electricity market. The connection will benefit the national economy, and electricity users by hundreds of millions of euros. Functional transmission connections are an important part of supporting the electrification of industry and society”, says Minister of Economic Affairs Mika Lintilä.
In the summer, the main grid owner responsible for the system, Fingrid Oyj, applied for a permit from the Ministry under the Electricity Markets Act to construct a power line between Vuennonkoski and Viitajärvi. The interconnector is set to be completed towards the end of 2025.
The importance of the project has also been recognized in the EU, as it is part of the Aurora Line project, which has been selected for the list of Projects of Common Interest for Europe (PCI) in November 2017.
A precondition for granting the permit is that the construction of the transmission line is necessary to secure transmission of electricity. Another precondition for granting a permit for a power line crossing a national border is that the construction is otherwise appropriate for the development and reciprocity of the electricity market. The permit does not specify the route of the power line.
The project is based on the need for additional electricity transmission capacity between Sweden and Finland. Cross-border transmission capacity is often inadequate, and as a result, the electricity market cannot function efficiently and electricity prices diverge. This increases the price of imported electricity in Finland. Additionally, the growing wind power production in northern Finland and Sweden due to good conditions increases the need for electricity transmission.
Price of electricity to decrease with users to save hundreds of millions of euros per year
According to Fingrid, the key benefit of the new power transmission connection will be the levelling of electricity prices between Finland and northern Sweden, which will lead to lower prices in Finland. The new transmission connection is estimated to reduce the electricity price difference between the supply areas of Finland and northern Sweden. It is estimated that the connection will lower the price of electricity in Finland and the Baltic States by about EUR 3/MWh in 2025 and by about EUR 8/MWh in 2035.
The power line is considered a profitable project for the national economy. According to Fingrid, its benefits to the national economy are estimated to be around EUR 59 million per year in 2025 and around EUR 180 million per year in 2035. In 2025, the benefits to Finnish electricity users have been estimated to be approximately EUR 400 million per year, and in 2035 around EUR 1.1 billion a year. Failing to implement the project would cause significant harm to the national economy.
The transmission line would form the third alternating current connection between Finland and the rest of the Nordic synchronous area, which would improve the fault tolerance of the electricity system. The connection would decrease by 98% the probability that a simultaneous failure of alternating current lines between Finland and Sweden would result in isolation of Finland from the rest of the synchronous area.
The new transmission connection will also significantly improve the security of electricity supply. The electricity production capacity in use in Finland is significantly lower than peak electricity consumption, and Finland is dependent on imported electricity, especially during peak consumption in the winter. While the commissioning of the Olkiluoto 3 power plant unit will improve this balance in the near future, there are still concerns about the adequacy of electricity in the coming years. The electrification of society is also expected to significantly increase demand for electricity in the coming decade.
Kanerva Sunila, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 29 504 7138
Teppo Säkkinen, Special Adviser to the Minister of Economic Affairs, tel. +358 50 516 2868