Green Ambitions in February: How Baltic and Nordic Countries Are Shaping the European Energy Landscape

The second month of 2024 was marked by significant strides in energy innovation and ambition in Northern Europe. The Baltic countries are considering merging their three national power exchanges into a single, more stable and capable organisation, while Estonia is sharing ideas for Estlink 3, an additional 700 MW link to Finland. Meanwhile, Germany is taking on the role of intermediary between Northern and Southern Europe to ensure energy and economic stability, and to foster a favourable environment for green energy.?

"The Nordic countries, including the Baltic states, are at the forefront of renewable energy innovation. By fostering cooperation, they are not only meeting their energy needs but also securing an important position in the EU energy landscape," says Povilas ??sna , Head of Trading and Origination at GREEN GENIUS . "Moving forward, the joint efforts of all stakeholders will be crucial in turning these visions into reality and ultimately building a sustainable and interconnected energy future."?

One significant project in February, drawing attention for its potential to enhance the region's environmental sustainability and energy security, and to pave the way for a greener future, is Estlink 3. This 700 MW undersea electricity interconnector, linking Estonia and Finland, supplements the existing Estlink 1 and Estlink 2 interconnectors, which have a total combined capacity of 1 GW.

"This could help make electricity prices more affordable for consumers in all three Baltic countries and ensure a more sustainable, interconnected energy future for the entire region," remarked Povilas ??sna .?

The tectonic interconnections in Europe are undergoing significant changes.?

Thirty-five years after gaining independence, the Baltic States are set to connect to the continental European electricity grids in 2025. Furthermore, they are advancing towards a more unified electricity market by proposing the merger of their three separate exchanges into a single, robust exchange.??

"This strategic move is aimed at increasing market liquidity, competition, and ultimately, the region's energy security and autonomy," Povilas ??sna explained.?

He added that the success of the Baltic disconnection will also hinge on Germany's Suedlink power transmission line, a vital infrastructure project designed to connect renewable energy sources in the North with industrial centres in the South. Scheduled for completion by 2028, this initiative underscores Germany's ambition to solidify its renewable energy position, enable the seamless transfer of green energy between regions, and significantly mitigate pollution.??

"All these developments are crucial in creating new opportunities for power purchase agreements (PPAs), especially for large industrial consumers. Increased connectivity with neighbouring countries facilitates the rapid deployment of renewable energy projects, enhancing market development and competitiveness," says Povilas ??sna .

However, he also emphasizes that these plans necessitate a cooperative and coordinated approach, with government support playing a crucial role.?

Initiatives such as Contracts for Difference (CFD) auctions are essential in maintaining this momentum.?

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