Finnish industry holds discussions on Russian electricity cable project

ElFi and United Power want 15-year contract

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Finnish heavy industry and key wholesalers and retailers are interested in a proposal for a large undersea electricity cable that would run from Russia to Finland. The proposal calls for the cable to originate in the area near the Russian Sosnovyi Bor nuclear power plant, and surface in the city of Kotka on the Gulf of Finland. The cable would connect the Russian and Nordic electricity grids.
      The cable would allow Finland to import the equivalent of 1,000 megawatts of electricity, or about the output of one nuclear power plant.
      In June Finnish industry set up a company called ElFi Oy for the procurement of electricity.
      The company’s board decided on Tuesday that it would start negotiations for a preliminary contract on the purchase of electricity with the initiator of the proposal, United Power.
     
The agreement would be both preliminary and conditional, because the process for seeking a licence for setting up the cable remains open. Minister of Trade and Industry Mauri Pekkarinen (Centre) has promised that the issue, which has been under discussion for two years, will be resolved in September.
      The matter has been controversial, because Fingrid, the company that runs Finland’s national electricity grid, is sharply opposed to the project, saying that there is not enough capacity to deal with the increase in supply. On the other hand, Fingrid’s main owners are two large electricity producers, Fortum and Pohjolan Voima, who are likely to oppose additional imports, which would be likely to bring down the price of electricity.
     
ElFi includes 18 companies, such as the beverage maker Altia, the meat packers Atria, and HK Ruokatalo, the elevator and escalator manufacturer Kone, the paper manufacturer M-Real, and the metallurgical company Outokumpu.
      Shareholders in the commerce sector include Kesko and SOK.
      The companies are concerned about recent developments in the price of electricity, and hope that increased imports might bring prices down. A 15-year supply contract would help the companies secure reliable supplies of electricity.
     
Serving as a model for the contract would be the 15-year agreement by the Swedish company BasEl and United Power, which was signed late last year. BasEl includes Swedish heavy industries with operations in Finland as well.


Previously in HS International Edition:
  Spokesman for Russian electric grid denounces proposal for power cable to Finland (21.4.2006)
  Russian company sweetens offer for large undersea electric cable (20.4.2006)
  Minister Lehtomäki: Russia not actively pushing for undersea electric cable (19.4.2006)
  Fingrid CEO gives dire warning of Russian cable project (11.4.2006)
  Vanhanen denies "pressure" from Russia on undersea electric cable issue (3.4.2006)
  Proposed undersea cable would double electricity imports from Russia (15.12.2005)
  Russia wants to extend life of Sosnovyi Bor nuclear plant through 2026 (17.5.2006)

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