WEC Lithuania unites the Lithuanian Electricity Association; Lithuanian District Heating Association; Lithuanian Nuclear Energetics Association; Lithuanian Biomass Energy Association LITBIOMA; Lithuanian Energy Consultants Association; The National Association of the Electrical Engineering Business (NETA); Lithuanian Hydropower Association; and the Lithuanian Electricity Producers’ association. WEC Lithuania seeks to unite forces to effectively manage and rationally develop a national energy sector – to supply energy with the most favorable conditions, without compromising future generations to meet national needs in this area, and to represent the interests of the Lithuanian energy sector in the world.
Energy in Lithuania
As in previous years, the main action priorities in Lithuania’s energy sector are related to renewable energy, as well as market design reforms that are currently being implemented in the country. Digitalisation is also noted on the priorities list.
Regarding the renewable energy sector, it should be emphasised that, together with the National Energy and Climate Plan (NECP) that was approved in 2020, Lithuania started to develop its regulatory framework for offshore wind development. It is expected that the offshore wind energy auction (700MW) will take place in 2023. This auction, together with other support mechanisms that are currently in place, will create a solid basis for Lithuania to achieve a few of its strategic goals in the energy sector – to increase local electricity production, as well as to keep renewable energy as the main energy source in the country.
With reference to market design reforms, it should be noted that after long-lasting discussions in the Parliament and due to Lithuania’s EU commitments, Lithuania finally decided not to regulate electricity prices for household (B2C) consumers. Starting from 1st January 2021, regulation of the final electricity prices has been terminated for the largest household consumers (consuming more than 5,000 kWh per year), while gradually reducing the consumption threshold, prices for all household consumers will be deregulated from 2023. It is expected that this process, together with smart-meter roll-out and data-hub projects, will help to increase competition in the market as more electricity suppliers will enter the market. In addition, data availability will help energy companies to tackle their challenges and seize the opportunities related to digitalisation.
Regarding the synchronisation of Lithuanian, Latvian and Estonian electricity power systems to the Synchronously Operated Area of the Continental Europe (CESA), it should be noted that, in 2020, three Baltic transmission system operators (TSOs) started to develop common principles for frequency and balance control of three Baltic power systems, which will take effect after the synchronisation process is completed in 2025. In 2020, Baltic TSOs developed key concepts and principles and described the technical requirements and procedures required for setting up the future ancillary services market.
While Baltic States are seeking to disconnect from the IPS/UPS system as soon as possible, another geopolitical challenge emerged. The Astravyets NPP started its operations in Belarus at the end of 2020 and, as a result, Lithuania is seeking an EU-wide ban on electricity imported from the Astravyets NPP, which is located approximately 50 kilometres from Vilnius. At present, all Baltic States have to agree on uniform principles related to electricity trading with third countries; but as yet, this agreement has not been reached.
However, it should be expected that all required agreements will be reached, and all the actions highlighted above will contribute to consistent regional integration and should help Lithuania as well as other Baltic States to tackle their energy market uncertainties related to geopolitics, cyber security and others.