Fingrid, the electricity transmission system operator in Finland, will build almost 3000 km of transmission lines, some 30 new substations and additional reserve power capacity in the next 10 years. This will call for considerable financial input and personnel resources. Financing the sizeable capital investment program of 1700 million euros will also require an increase in the grid fees at the beginning of 2012.

In the next decade, Fingrid will use 1700 million euros to reinforce the electricity transmission grid in Finland. The capital investment program equalling the company’s balance sheet total will require from the company strict financial control, substantial personnel resources and fluent co-operation with the stakeholders.

Fingrid intends to finance the capital investments primarily through internal financing, but external funding is also needed. Fingrid’s President Jukka Ruusunen has a confident view of the recent trends in the financial market.

“Fingrid has fairly good international credit ratings, which is important when operating in the international and domestic money and capital markets. The company has long traditions in being present in the financial market through its short-term and long-term debt issuance programs,” Ruusunen said in Fingrid’s press conference.

Fingrid’s capital investments will rise up to 200 million euros on an annual level, while in the early part of this century the annual investments were in the region of 40 million euros.

“We face great pressure to raise the grid fees, and we have estimated that there will be a two-digit percentage increase. The change is not that significant in the price of electricity for ordinary consumers, because at present grid transmission only accounts for 2 per cent of the consumers’ electricity bills.”

“In for a tough job”

The construction program will also pose a considerable challenge for transmission line contractors. Jukka Ruusunen pointed out that the basic renovation of the electricity infrastructure in Finland is a major project extending over 10 years, requiring good co-operation with customers, builders, authorities and landowners.

“We are in for a tough job. The construction of the new transmission lines alone will involve the input of thousands of person work years. We will need good interaction especially with the transmission line contractors, landowners, customers and authorities who process the permits concerning transmission lines,” Jukka Ruusunen said.

Flexible plan as per needs

Fingrid has drawn up a flexible capital investment plan for 2010 to 2020. The plan is updated as necessary, for example if required by decisions concerning the construction of new power generating units. The program makes preparations for connecting 2500 MW of wind power and two new nuclear power units to the transmission grid. Capital investments are also needed to renovate the existing grid.

The Finnish grid will be reinforced in four stages. The first stage encompasses 400 to 450 km of transmission lines and a reserve power plant in Forssa. Reserve power is used for preparing for potential disturbances in the power system. There are plans for a total of approximately 300 MW of new reserve power.

As mentioned before, Fingrid is getting ready to construct almost 3000 km of transmission lines and 30 substations. About 90 percent of the new transmission lines will be built parallel with existing lines, or the new line will replace the existing one. The routes of lines required by nuclear power units will be determined in conjunction with the environmental impact assessment (EIA) procedure.

In addition to new electricity generation capacity, the transmission grid also needs to be upgraded because of projects for the construction of cross-border lines to the neighboring countries so as to safeguard the functioning of the electricity market and the system security of the power system, and because of the renovation of substations and transmission lines originally constructed in the 1960s and 1970s.

“We are currently building the new direct current cable to Sweden. This will be complete in 2011. A project for a corresponding cable connection to Estonia is also in progress. In western Finland, the 220 kV grid will be upgraded to a voltage level of 400 kV, which enables comprehensive connection of wind power to the grid in the coastal regions. The reinforcement of the grid also continues further up north all the way to the Swedish border. The detailed solutions and schedules will become more specific once the necessary decisions on the location of new nuclear power units and wind power capacity have been made,” Jukka Ruusunen said.