The Finnish Ministry of Trade and Industry has granted Fingrid Oyj and Svenska Kraftnät permission to increase the capacity of the submarine cable link between Finland and Sweden. The project – Fenno-Skan 2 – will help to improve the functioning of the Nordic electricity market. It should be complete by 2010.

The EUR300 million project will increase the electricity transmission capacity between the two countries by around 40 per cent, and is one of five cross-border transmission projects given priority by Nordel, the organization of Nordic Transmission System Operators (TSOs).

Fenno-Skan 2 will be an 800 MW, 500 kV direct current link stretching 270 km between Rauma in Finland and Finnböle in Sweden. Some 200 km of the line will be submarine cable.

Nordel’s five priority interconnection projects amount to a capital expenditure of EUR1 billion and are all scheduled to be ready in 2010. The new links will facilitate electricity market mechanisms and improve system security.

“Electricity transmission between Finland and Sweden is presently subject to relatively random restrictions, accounting for approximately five to ten per cent of the time. Once Fenno-Skan 2 is ready, the restrictions will reduce to two per cent, and the volume of the market will be at least 250 TWh,” said Jukka Ruusunen, President and CEO of Fingrid Oyj, the Finnish TSO.

Fenno-Skan 2 will help to reduce temporary differences in the price of electricity between the various countries in the region’s electricity market. It will also reduce losses in the Nordic Transmission grids and lower the cost of system services.