Estonia, Nordic power bourse, step up single market drive

(TALLINN) - Estonian grid company Elering on Tuesday signed a deal with Norway-based regional electricity bourse Nord Pool, in a bid to create a single Nordic and Baltic power market by 2013.

The deal, inked in the Estonia capital Tallinn, will enable Nord Pool to expand beyond Estonia to its fellow Baltic states Latvia and Lithuania, Elering spokesman Kunnar Kukk told reporters.

The Baltic trio joined the European Union in 2004 but still have few connections with the West's power grids.

Estonia has been hooked to the Nordic grid since January 2007 via an undersea cable to Finland.

From April this year, it will join a single power trading area within Nord Pool.

Nord Pool chief Mikael Lundin said the long-term goal was to "create a Baltic market connected to the Nordic market."

Taavi Veskimagi, his Elering opposite number, added that the deal "sets the ground to create a free electricity market based on common trading conditions and to integrate the electricity markets of Estonia, Latvia and Lithuania between themselves and with the Nordic States".

Estonia, Latvia and Lithuania regained independence from the crumbling Soviet bloc in 1991.

But the trio, who have a combined population of 6.8 million, are frequently dubbed "energy islands" in the EU and have more power links with Russia and Belarus than with the West.

A second Estonia-Finland link is due in 2013, and there are plans to hook Lithuania to the Swedish and Polish power grids, smoothing electricity imports from elsewhere in the EU.

In addition, Lithuania has launched a tender for a new nuclear power station to replace a Soviet-era plant that went offline in December. The project, involving Latvia and Estonia and southern neighbour Poland, is expected to be complete by 2018-2020.