Elektrilevi seeks €1.9 billion for network investments by 2035

Estonian electricity distribution company Elektrilevi plans to invest €1.9 billion in its network by 2035, but current network fees do not provide enough funding, ERR reported.

Elektrilevi, together with its subsidiary Imatra Elektr, owns 99 percent of Estonia’s distribution network. Its draft development plan sets out the investment needed to meet the targets of Estonia’s energy strategy over the next decade.

The company said it would also need about €350 million to strengthen the network’s resilience during crises. Current network fees do not cover that amount either.

Elektrilevi board chairman Mihkel Härm said 28 percent of the distribution network had reached the end of its designed service life, and that share was increasing each year.

“Our goal is to put a stop to this and invest nearly €1.9 billion in the network over the next 10 years,” Härm said.

Because the investment needs exceed Elektrilevi’s financial capacity, the company will launch a flexibility services pilot project in 2027 at up to five regional substations.

The project will assess whether involving electricity consumers, producers and energy storage facilities could allow some network investments to be postponed or avoided. If successful, the pilot could reduce the need for high-voltage network investments by €80 million to €90 million.

The planned investments have three main objectives: increasing network capacity to enable new consumption and generation connections, improving reliability to reduce power outages, and strengthening resilience so the network can withstand storms, disruptions and a more challenging security situation.

Resilience investments will focus on infrastructure protection, emergency stocks, network switching solutions and islanding capability to ensure the continuity of the vital service in the most difficult circumstances.

About €67 million of the investment would go toward developing information technology capacity and cybersecurity.

Electricity demand expected to rise

The investment forecast is based on projected growth in electricity consumption. Distribution network peak demand has remained between 1,250 and 1,450 megawatts in recent years, but is expected to rise by 20 to 30 percent over the next decade, reaching about 1,788 megawatts by 2036.

The forecast assumes that the biggest drivers of demand growth will be the electrification of transport, the adoption of energy storage solutions, industrial development and the transition of buildings to electric heating.

Electric transport is expected to have the greatest impact. Its peak demand is forecast to be 125 megawatts higher in 10 years than it is now.

Energy storage is expected to add about 94 megawatts to peak demand, followed by industrial development at 47 megawatts, electric heating in buildings at 31 megawatts and other factors related to consumption growth at 16 megawatts.

Together, these factors are expected to add about 313 megawatts to peak load between 2026 and 2036, in line with the overall projected increase in peak demand.