The Finnish Ministry of Trade and Industry has granted a cross-border line permit to the extension of the submarine cable link between Finland and Sweden. The extension will be carried out in co-operation between Fingrid and Svenska Kraftnat.

The capital expenditure project of about E300 million – Fenno-Skan 2 – will be completed by 2010. The project will improve considerably the functioning of the Nordic electricity market.

Jukka Ruusunen, president and CEO of Fingrid, the Finnish transmissions system operator, said: The Nordic countries are committed to promoting the electricity market through highly concrete action. Electricity transmissions between Finland and Sweden are presently subject to relatively random restrictions, accounting for approximately 5% to 10% of the time. Once Fenno-Skan 2 is ready, the restrictions will reduce to 2%, and the volume of the market will be at least 250 terawatt hours.

Fenno-Skan 2 will increase the electricity transmission capacity between Finland and Sweden by approximately 40%, integrating the Nordic electricity market even more closely together. In practice, the project will reduce temporary differences in the price of electricity between the various countries within the electricity market. The cable will also reduce losses in the Nordic transmission grids and improve power system security.

Fenno-Skan 2 will be an 800MW and 500KV electricity transmission connection between Finland and Sweden. The connection will be a direct current link. The total length of the link will be approximately 270km, of which the actual submarine cable will account for 200km.