ARVI HAMBURG ⟩ The power system shift in February – will the lights go out?

A view of the Pskov-Tartu high-voltage line at the Estonian-Russian border. The border strip itself is not visible in the photo; it is about a hundred meters away. The transmission towers further away are already on Russian territory. Photo: Arved Breidaks

• We can make our power system larger and more stable with strong connections to a large network.
• The likelihood of potential risks materializing when switching synchronous areas is extremely small.
• Changing the frequency area is crucial for the energy security of the Baltic states.

Compared to other countries, the power system of Estonia and the Baltic states as a whole is relatively small and, moreover, in deficit. The region's own electricity generation does not cover its consumption, and the share of imported electricity in recent years has been almost 40 percent, Arvi Hamburg, chairman of the energy committee of the Estonian Academy of Sciences, writes.

The situation before the switch

Boosting electricity generation with the goal of covering total annual consumption with renewable electricity in five years requires investment in strengthening and reorganizing the grid, as well as in building long-term storage facilities and dispatchable power plants. In a power system saturated with weather-dependent wind and solar power, we must balance the different production and consumption profiles with additional measures. A semi-finished product must be brought to full readiness and delivered to the consumer. For balancing, we need proportionally more reserves than a larger power system typically requires, as well as flexible system services, and trained management skills.

Like a small boat at sea, every minor gust of wind rocks it – similarly, in a small power system, even a random «hole» in generation or consumption causes a jolt. To stay on course in stronger winds, we need the extra power of an outboard engine – and in the power system, we need reserve capacities to fill a «deeper hole». In a storm, it is the correct assessment of the situation and a well-trained crew that save a boat from sinking – the same principle applies to restoring balance in the power system.

Sea travel is safer and more comfortable with a bigger ship, and we can make our power system larger and more stable with strong connections to a large network while enjoying the benefits of that bigger system. For that reason, after regaining independence, the power systems of the Baltic states—Estonia, Latvia, and Lithuania—signed a parallel operation agreement with the Russian–Belarusian power system, as historically we had been connected to the unified system via nine powerful transmission lines. We have so far operated without major disruptions in the IPS/UPS synchronous area. Automated frequency regulation throughout that synchronous area has been carried out by the Russian system operator. Most recently, when EstLink2 failed, reserve capacities in the Russian power system started up to compensate for the lost power supply.

Electricity flows like water from higher elevation to lower without human intervention. After that immediate help from the Russian side, the system operators of Estonia, Latvia, and Lithuania activated the reserves at our disposal to maintain the hourly cross-border AC balance close to the agreed minimum. In addition to domestic capacities, the Baltic system operators have agreements with their Finnish and Swedish counterparts on reciprocal use of adjustment reserves.

The «February events»

Within the European Union, we share common values—most notably a collective infrastructure and regulations for operating it. Every country's power system must be able to manage itself, maintaining a balance between generation and consumption. As an EU member state, we have long been preparing to connect our power systems to the continental European synchronous area. From the consumer's point of view, nothing changes; the quality requirements for electricity are the same in both the «old» and the «new» frequency area, and the rotation speeds of electrical machines remain the same. The only difference is the phase angles of the rotating generators.

On the morning of February 8, the Baltic states' system operators will start switching off the lines currently operating between them and the Russian-Belarusian system. First, the Lithuania–Kaliningrad connection will be disconnected, and the last one will be Estonia–Russia. This will be followed by roughly a day and a half of the Baltic states operating independently, balancing their own generation and consumption and controlling their own frequency—known as «island operation. In preparation for this, we will limit the electricity trading capacity on the direct-current (DC) interconnectors during island operation—from 700 MW to 300 MW on the Lithuania-Sweden NordBalt link and from 350 MW to 150 MW on EstLink1. This step mitigates large fluctuations in the system in the event of potential outages of high-capacity units. The freed capacity remains in reserve to compensate for any possible failures in internal power production.

During island operation, the existing Lithuania-Poland DC link will be switched to AC readiness mode.

One supply link, EstLink2, is already down. Despite an N-1 mode of operation, other interconnections and Baltic power plants can still ensure balance between production and consumption. Working in island mode is effectively a test of our ability to manage independently.

Should a highly unlikely failure occur during this «exam», the test would be aborted, and the Baltic power systems would connect to the continental European power system. If the test is successful, on Sunday afternoon the synchronization with the continental European synchronous area will begin. We will switch to parallel operation via the Lithuania-Poland AC connection and restore normal commercial power flows on the cross-border DC links. The total cost for connecting the Baltic power system to the continental European synchronous area is about 1.6 billion euros, with three-quarters of it co-financed by the European Commission.

Potential risks

The likelihood of potential risks materializing when switching synchronous areas is extremely small. During island operation, frequency may fluctuate within the permissible limits as the control systems and frequency reserves are tested in an isolated system.

The worst-case scenario would be the failure—on top of EstLink2—of other significant power sources, which we would be unable to compensate for using our own reserves and the remaining interconnectors (EstLink1, the Lithuania-Sweden NordBalt, and Lithuania-Poland LitPol). As a last resort to maintain balance in the power system, we would begin a gradual, short-term rotating disconnection of consumers, ensuring electricity supply for critical users.

It is advisable to maintain a small supply of drinking and household water and to ensure that one's car's fuel tank is adequately filled for weekend travel.

The Baltic states' system operators have rehearsed all possible scenarios, documented cooperation with their neighboring countries, assessed potential risks, and planned ways to mitigate them.

We are ready, yet in real life there is no absolute 100 percent certainty. Therefore, we will act according to Estonian common sense: «Trust and hope in others, but stand on your own two feet.» As consumers, we can review our companies' production processes. If possible, avoid using equipment or processes over the weekend that are extremely sensitive to minor fluctuations in frequency or voltage. Those with backup power sources at home may want to check their start-up readiness and fuel supplies, as well as the charge level of any device batteries. It is advisable to maintain a small supply of drinking and household water and to ensure that one's car's fuel tank is adequately filled for weekend travel.

For the average consumer, the best way to support the shift to a new synchronous area is simply to use electricity as they normally would on the weekend. However, it should be noted that during island operation, the exchange price of electricity will be higher, since cross-border DC capacity for electricity trading will be reduced by half.

Operating in the new frequency area

Synchronizing with the continental European synchronous area is a fundamental change in how Estonia's power system is operated. The system operators in the Baltic states will have to manage the real-time AC balance based on capacity and support the synchronous area's regional frequency with frequency maintenance and frequency restoration reserves. The strong ties with the old system will be replaced by just a single Polish-Lithuanian line, making the likelihood of interruption a permanent risk of falling back into island mode. We must be constantly prepared for that. Another challenge is that the same line will be used to secure frequency reserves, leaving only 150 megawatts for regular electricity trade.

This situation will likely continue until the completion of the 700 MW Harmony Link around 2030. Beyond the inherent difficulties of balancing a small power system, the volatility of wind and solar output will cause rapid changes in the volume and direction of power flows and in voltage levels, compounding the usual challenges of frequency stability (disturbances in generation-consumption balance). There are also concerns about voltage stability (voltage fluctuations) and angle stability (differences in generator rotation speeds).

The amplitude of fluctuations under normal and fault conditions, within prescribed ranges, characterizes the stability level of a power system. The local power plants must be able to adjust their output within seconds to keep the system balanced. Each Baltic country and the Baltic region as a whole must maintain common frequency reserves. Based on their purpose and activation speed, these reserves are classified into frequency containment reserves, automatic frequency restoration reserves, and manual frequency restoration reserves, with response times ranging from about 30 seconds to 5 minutes, and 5 to 15 minutes. In addition, the system must have sufficient inertia.

From the very first second, synchronous compensators help maintain frequency, as their rotating mass inertia slows the rate of frequency decline, buying time for the frequency automation to respond. Currently, Eesti Energia's oil shale power plants can also provide frequency reserves.

According to system operators, the current frequency reserves of the Baltic states, along with the Kiisa emergency reserve power plant, are sufficient for operation in the continental European synchronous area. Still, given the reliability constraints of the system elements, the coming period will be quite tense. With the 100-percent renewable electricity target, weather-dependent generation will increase. Consequently, the Baltic system operators forecast higher demand for fast frequency reserves, because the inherent unpredictability of renewable generation will increase forecast errors. Meanwhile, older dispatchable power plants in the region are planned for decommissioning, and the Kiisa emergency reserve power plant can only be used as a frequency reserve until 2027.

Switching the Baltic power systems from the Russia-Belarus synchronous area to the continental European synchronous area mitigates energy security risks.

To mitigate such risks, Elering is arranging a procurement for up to 500 MW of frequency reserves, intended to bring additional reserve capacity to the market from 2028 onward. The European Commission has exceptionally allowed Estonia to procure frequency reserves under a long-term eight-year contract. According to the procurement conditions, a generation unit must be able to start producing within 12.5 minutes and supply power for 24 consecutive hours. In addition, the provider must demonstrate how the reserve-offering unit can transition to renewable fuel in the future.

Changing the frequency area is necessary. Switching the Baltic power systems from the Russia-Belarus synchronous area to the continental European synchronous area mitigates energy security risks. System operators are well trained to face the challenges of frequency maintenance and restoration under the new regime. Building and maintaining sufficient reserve capacity is a cost that consumers will inevitably bear. System operators pay continuous compensation to reserve-capacity owners for keeping reserves at the ready.

The price of independence

The total price of electricity for the end consumer includes the exchange price of electricity, the costs of system services needed for balancing, the network service fee, renewable energy charge, and national taxes. The impact of changing the synchronous area on the exchange price in bidding area Estonia depends primarily—though modestly—on Poland's bidding area prices.

The exchange price is also affected by maintaining fast reserves when operating in the continental European synchronous area. This can mean that part of the generation is withheld from the market to serve as reserves, reducing supply, or vice versa. Additionally, due to the need to exchange reserves among the Baltic states, the commercial transmission capacity between Estonia and Latvia may be reduced, which might actually lower the price in Estonia's bidding area because there will be less of the affordable Nordic power flowing further south.

Thus, there could be a two-way impact on the exchange price in our bidding area, but it will be minor compared to the cost of system reserves.

Factors increasing the total price of electricity

* Immediately in effect: island operation fees, estimated at 35 million euros per year. Spread over an annual consumption of 8 TWh, this adds 4.4 euros per MWh, or 0.44 cents per kWh.

* From August 2025: a frequency reserve fee will apply to consumers, which Elering estimates at 60 million euros per year. Distributed over total consumption, that is 7.5 euros per MWh, or 0.75 cents per kWh. According to Elering's 2024 forecast, the cost of holding frequency reserves for both consumers and producers is 5.31 euros per MWh.

* Going forward, probably from 2028 onward, additional reserve capacities from the ongoing procurement will materialize, whereas the need for frequency reserves will also grow in a power system increasingly saturated with weather-dependent and load-dependent generation. It is not possible to accurately predict the price of these reserves.

According to Elektrilevi, the average current network service fee is 44 euros per MWh, or 4.4 cents per kWh. Therefore, we should add about 1.2 cents per kWh to the total electricity price to cover island operation and frequency reserve fees—one component of the consumer's total electricity bill.

We are not examining other components of the total electricity price that arise from the need to invest in balancing weather-dependent electricity production, connection fees for wind farms, and renewable energy charges.

The electricity exchange price is set in a large market, and it may decrease in our bidding area. However, because of the additional components, we should not expect the total electricity price to fall.