The towns of in southern Estonia Valga and Valka in northern Latvia are split in half by the border. Local authorities have been working under the "two countries, one city" concept for several years.

When Utilitas acquired a combined heat and power plant in Valka, just across the Estonian border, in March last year, the group gained control over the heat supply for both border towns, as it already owned the Valga boiler house.

Both the Valka plant and Valga boiler house run on wood chips, but until now, excess capacity remained unused on the Latvian side, while Estonia relied on an oil shale boiler during colder weather.

"We believe that heat and electricity are increasingly integrated sectors. That's why we're pleased that the Valka CHP plant, which generates electricity at a base load, can also feed its residual heat into district heating networks. This makes it a significant and symbolic investment," said Utilitas Group CEO Priit Koit.

This is believed to be the first time in Europe that heat is being transferred from one country to another in this way.

The construction works for connecting the district heating systems of the two cities were completed at the end of August this year and more than 1,600 meters of new pipelines were built. Heat began to move between the two cities at the beginning of this heating season.

Heat production in both border towns is environmentally friendly. The nearly €2 million investment is the first of its kind made by a private company using its own funds to develop cross-border infrastructure.

"We must always compare what's more cost-effective for consumers. This pipeline is clearly more economical than building new production units. On top of that, it's a smart use of resources. If there's already a power plant on the Latvian side that's built with more capacity, then of course we should make use of it as much as possible," said Robert Kitt, head of Utilitas' district heating operations.

The ceremonial opening of the cross-border pipeline took place right on the border, where a symbolic heat valve was turned on.

If the electricity exchange brings Estonian and Latvian power prices closer together, heat will still be more expensive in Latvia.

"In Estonia, the current price is around €60 per megawatt-hour, plus VAT. On the Latvian side, the consumer price is slightly higher, but compared to other Latvian cities, the price remains at the lower end in Valka," Kitt explained.

The project did not require navigating much bureaucracy. Still, the construction team did have to explain to police why they were digging along the national border.

--

Follow ERR News on Facebook and X and never miss an update!