Russian undersea electric cable proposal receives mixed reception

State Technical Research Centre in favour, energy industry opposes

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A numerical majority of responses to an enquiry by the Ministry of Trade and Industry concerning a proposal for an undersea 1,000-megawatt electricity cable from Russia to Finland support the proposal.
      Supporters of the cable include the Technical Research Centre of Finland (VTT), the Finnish Competition Authority, and the Technology Industries of Finland.
      Opposing the project are both the National Emergency Supply Agency and the Federation of Finnish Enterprises. The project has also come under criticism from the energy industry.
     
An application for setting up a power cable at the eastern end of the Gulf of Finland, from near the Sosnovyi Bor nuclear power plant in Russia to Kotka in Finland, was submitted to the Ministry of Trade and industry by the Russian-owned United Power more than two years ago. The ministry has promised a response at the end of the year.
      Recent comments from the ministry suggest that a decision may be delayed as new environmental assessments are called for.
     
Statements submitted indicate that opinions on the feasibility of and need for a power cable are split into two camps.
      The number of positive views is greater than the negatives. There are seven clearly positive responses, and four which are outspokenly negative.
      Mika Purhonen, Director-General of the Emergency Supply Agency, says that under present circumstances the cable project conflicts with the need to guarantee supplies of energy in emergency situations, and that even the existing level of electricity imports from Russia - about 1,300 megawatts - has caused structural dependence.
      On the other hand, Purhonen points out that the Nordic market is also unable to secure Finland’s electricity needs, because there are no legally binding arrangements. This is why Purhonen says that Finland needs to maintain sufficient generating and distribution capacity for electricity within Finland.
     
The Federation of Finnish Enterprises opposes the cable because it is not seen to bring much benefit for small and medium-sized enterprises.
      The group points out that United Power says that it has come to a preliminary agreement with 17 large industrial companies, which would consume nearly 900 megawatts of the cable’s 1,000 MW capacity. The likely result would be that these companies would get cheaper electricity, and that others might end up eventually paying more, as possibilities for domestic investments decrease.
      The federation also suspects that households would be unlikely to benefit from the cable.
      Mikko Kara of the Technical Research Centre of Finland (VTT) supports the cable, saying that for the market, it is comparable to a new power plant. He also notes that it would add to diversity in Finland’s electricity supply, and decrease the ability of the present suppliers to manipulate the price of electricity.
      He also notes that the additional electricity would ease the threat of a shortage in supply.
      According to Kara, the output of the cable could initially be kept below the maximum capacity of 1,000 megawatts, if the national electricity grid and its reserves cannot immediately be upgraded sufficiently for the purpose.
      Matti Mäenpää of the Technology Industries of Finland says that the early part of the next decade will be critical with respect to the adequacy of the electricity supply. He feels that the Russian cable would increase the diversity of electricity sources.
     
At the ElFi consortium of industrial and trade enterprises, managing director Jukka Muilu is in favour of the cable, noting that there are problems in Sweden’s electricity situation.
      Muilu says that the cable project would decrease Finnish dependence on electricity imports from Sweden.
      The Finnish Competition Authority wants to see more electricity transfer capacity from outside the Nordic countries.
      Also supporting the project are the City of Kotka and the Finnish chemical industry.
      Finngrid, the company which operates the Finnish national electricity grid, and which is dominated by the electricity suppliers Fortum and Pohjolan Voima, opposes the project, as does Finnish Energy Industries.


Previously in HS International Edition:
  Finnish industry holds discussions on Russian electricity cable (9.8.2006)
  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)
  Fingrid CEO gives dire warning of Russian cable project (11.4.2006)
  Proposed undersea cable would double electricity imports from Russia (15.12.2005)

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