Fingrid is making considerable capital investments to reinforce the transmission grid between Finland and Sweden, and also to improve the supply reliability of electricity in Northern Finland.
Fingrid has a major ongoing construction and repair programme for the nationwide electric transmission grid. Fingrid completed a number of substation and transmission line projects last fall, but the construction work will continue in the coming years. All the reinforcement projects for the grid in Lapland will be brought to conclusion this year.
A new 400-kV transmission connection was completed between Keminmaa and Petäjäskoski towards the end of 2009. This line was part of a more comprehensive project valued at more than 50 million euros, also encompassing new substations and compensation stations. Building the transmission link was primarily related to improving the supply reliability of electricity in the Kemi-Tornio region and to upgrading the ac connections between Finland and Sweden.
Several other contracts have been in progress in Northern Finland, as well. A transformer was acquired for the Pikkarala substation to serve as a backup transformer, to secure electricity transmission in the Oulu region and to reduce losses in electricity transmission. The 220-kV transmission lines from Petäjäskoski in Rovaniemi to Valajaskoski and further to Isoniemi in Kittilä were completed in November, and a new substation was constructed at Isoniemi.
These projects are part of the reinforcement of the transmission grid in Lapland. Increasing electricity consumption in Lapland will call for a stronger grid in Northern Finland, but the construction projects also aim to keep the electricity transmission capacity between Finland and Sweden at a sufficient level for the needs of the electricity market once the Olkiluoto 3 nuclear power unit in Finland is ready.
Fingrid is responsible for the functioning and sufficiency of cross-border transmission connections. The Finnish power system is part of the inter-Nordic power system. Moreover, there are dc links to Finland from Russia and Estonia.
This winter has indicated concretely that Finland is highly dependent on electricity imports and on cross-border connections in the transmission grid. The windy and cold weather raised this winter's peak consumption to date to about 14,300 MW, which was slightly more than what was anticipated in the fall, when domestic electricity generation totalled about 11,400 MW and imports from the neighbouring countries 2,900 MW.
Despite the recession, the peak consumption was only 600 MW smaller than the all-time high peak consumption of 14,921 MW reached three years ago. The Finnish power system has worked without significant disturbances in the period of cold weather, and the sufficiency of electricity has not been compromised. The transmission connections have not restricted electricity trade between Finland and Sweden.
Between 2009 and 2019, Fingrid will spend a total of 1600 million euros on the transmission grid. The investments on an annual level are about 100 million to 200 million euros. The objective is to build more than 2700 km (1678 miles) of new transmission lines and about 30 substations. All in all, there are about 30 grid construction projects in progress in Finland this year.
The extensive capital investment programme will be funded partly through borrowing, but it will also inevitably have an impact on the grid tariffs. A more considerable increase is to be expected in the grid tariffs after the present tariff period in 2012. The nationwide transmission grid only accounts for 2% of the electricity bills of consumers, but the transmission price naturally has more significance for Fingrid's industrial customers.