Grid-scale
Latvia adds big batteries to complete grid sync with Europe, two major Estonian projects secure finance
The addition of two utility-scale battery energy storage systems (BESS) in Latvia marks the final milestone in synchronizing the Baltic power grids with continental Europe, according to the country’s transmission system operator. Meanwhile, Estonia is advancing two major BESS projects, backed with €85 million in financing, in another key step toward energy independence.
By
Marija Maisch
Oct 30, 2025
Finance
Grid-scale
Industry
Projects & Applications
From left: Minister of Climate and Energy Kaspars Melnis, AST Chairman of the Management Board Rolands Irklis and Rolls-Royce Power Chief Financial officer Dr. Andreas Strecker. | Image: AST, Rudolfs Liepinš
Latvia’s transmission system operator Augstsprieguma tikls (AST) has commissioned two utility-scale battery energy storage systems (BESS) in Rezekne and Tume, describing the milestone as the final step in synchronizing the Baltic power grids with continental Europe.
The 60 MW / 120 MWh battery in Rezekne and the 20 MW / 40 MWh facility in Tume will provide the Latvian power system with the balancing capacity required for the safe and stable operation.
Both battery systems have successfully completed qualification tests for providing frequency containment reserves (FCR) and automatic frequency restoration reserves (aFRR). Their participation in the balancing capacity market is set to begin on October 29, with the delivery of balancing reserves starting on October 30.
“Although the disconnection of the Latvian and Baltic energy systems from the Russian-controlled energy system and their accession to Europe took place already at the beginning of February, the work continued,” said Kaspars Melnis, Minister of Climate and Energy, at the Rezekne battery opening event.
“This year, two more synchronous compensators were installed, the operational tests of the Kurzeme synchronous compensators were successful, and now we are opening the battery project, which is the final point of more than 15 years of work on the path to the energy independence of the Baltic States. Neither during the historic weekend in February, nor during any of the other stages of the synchronization project, did residents even notice the work in the energy system, as the electricity supply was safe and stable. After the start of operation of the AST batteries, we will live in an even safer energy system.”
The new battery storage facilities will lead to a significant cost reduction for consumers and market participants in Latvia and across the Baltics. AST estimates annual savings of around €20 million from 2026 through lower balancing capacity costs.
The two projects were delivered by Germany’s Rolls-Royce Solutions in cooperation with LEC Construction International, at a total cost of €77.07 million.
The Rezekne BESS was fully financed by the European Union’s Recovery and Resilience Mechanism (RePowerEU), while the Tume system and related substation upgrades were co-financed 75% by the Connecting Europe Facility (CEF). To maximize operational efficiency, AST worked with researchers from Riga Technical University to develop a custom battery management system that optimizes performance and utilization.
“The battery project in Rezekne and Tume is the conclusion of our joint work on the most significant energy independence project in recent decades – the synchronization of the Baltics with continental Europe,” said AST Board Chairman Rolands Irklis.
“Batteries are important for the safe and continuous operation of the system. Rezekne is a special place for Latvia’s energy independence. Here on February 8, we severed the electricity connection with Russia, which was also a symbol of our historical dependence on the operation of the Russian energy system. Our largest battery project in Rezekne today is proof of our energy independence, because with the help of batteries we will continue to maintain stable operation and frequency in our network ourselves, thus ensuring safe and continuous electricity supply service to every Latvian resident and Latvian company. This is a big day for us as a company and for all of Latvia, strengthening the country’s energy security.”
Finance for Estonian big BESS In a parallel development, the Baltic Storage Platform joint venture has secured €85.6 million in financing from the European Bank for Reconstruction and Development (EBRD), Edmond de Rothschild Asset Management and the Nordic Investment Bank (NIB) for its two battery energy storage projects in Estonia.
The JV brings together French independent solar power producer Corsica Sole, Estonia’s renewable energy developer Evecon, and Mirova, an affiliate of Natixis Investment Managers dedicated to sustainable investment.
According to EBRD, this “groundbreaking transaction” represents the first project financing in the Baltic countries that is exclusively structured around the revenues generated by energy storage assets, while demonstrating the private sector’s direct investment in strategic energy infrastructure.
Both the EBRD and the NIB financing benefit from a financial safety net via first-loss risk cover from the EU under its InvestEU programme. Under such arrangements, if a project fails, the EU pays for the first chunk of losses, and the banks only cover losses after a certain threshold.
“This collaboration between multilateral institutions and private investors sends a strong signal: large-scale energy storage projects are now considered bankable assets capable of attracting private capital to support Europe’s energy transition,” EBRD said in a press release.
The financing will support two projects located in Kiisa and Aruküla, both roughly 25 km from Tallinn. Together, the Hertz 1 and Hertz 2 projects deliver a total of 200 MW of power and 400 MWh of storage capacity.
Hertz 1, located in Kiisa, has been energised on October 1, 2025, with commissioning scheduled for the end of the year, and the full suite of grid services expected by Q1 2026. This project features a major technical innovation: connection to Estonia’s 330 kilovolt transmission network through an underground cable – an unprecedented development in the country that will enhance grid resilience and facilitate renewable integration.
Hertz 2, currently under construction, is expected to become operational by the end of 2026.
According to NIB, these assets will help the Baltic countries enhance energy sovereignty, stabilize their power systems following the desynchronization from the Russian grid earlier this year, and accelerate the transition away from fossil fuels.
André Küüsvek, NIB President and CEO said:“With this financing, NIB is supporting strategic infrastructure that strengthens the regional energy security and climate goals across the Baltic region. These energy storage systems are essential for energy independence, ensuring grid stability and enabling more efficient integration of renewable energy sources.”
In February 2025, Estonia inaugurated its largest battery energy storage facility to date – a 26.5 MW / 53.1 MWh system owned by state utility Eesti Energia. The project, which cost €19.6 million, was delivered by energy solutions system integrator Diotech Group, which won Eesti Energia’s international tender in 2023. It was supplied with battery technology from LG Energy Solution. Installation and connection work were carried out by Enefit Solutions.
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