Balti Elektrituru Foorum 2007
Conclusions of the Baltic Electricity Market Mini-Forum
05th October 2007, Tallinn
1. The 5th meeting of the Electricity Market Mini-Forum for the Baltic States and Finland took place in Tallinn, on 05th October 2007. It was organised by the Estonian Energy Market Inspectorate (Estonian Energy Regulator).
2. The representatives of the regulatory authorities of the three Baltic States and Finland, ministries, TSOs, energy companies and energy sector consultants from Estonia, Latvia and Lithuania, and the representative of EuroPEX from Sweden participated on the Mini-Fora.
3. The Mini-Forum covers the following issues of special interest:
a. updates on latest developments in Estonia, Latvia, Lithuania and Finland;
b. security of supply in the region, closure of Ignalina nuclear power plant; building of new nuclear power plant in Lithuania and Finland;
c. specific aspects related to the ESTLINK;
d. status of implementation of ITC mechanism on European level and in the region.
4. The expert from Lithuania explained about the development of the Baltic electricity market. To have the functioning market, Baltic countries need well-developed infrastructure, harmonized rules of the game, many players, common rules to deal with the outsiders and future visions. He pointed that the common energy policy and the same treatment of the non-EU players are necessary. The most important task is to build new interconnections and have the functioning Baltic market in 2010.
5. The Baltic and Finnish TSO-s informed about the current situation of security of supply and plans to install new generating capacities. Generally Baltic region has enough serious plans to ensure generation adequacy for the future. There are plans to build some strategic interconnections:
· Estonia – Finland (ESTLINK II) 600 MW
· Lithuania – Poland (LITPOLLINK) 1000 MW
· Lithuania – Sweden 700 MW or
· Latvia – Sweden 700 MW
6. The representative of Eesti Energia gave overview of the ESTLINK 1 system services and operation. The analyzes of ESTLINK 1 shows that it has been used in both directions, but mainly in direction from Estonia to Finland, average capacity usage during 9 month has been 67,5%.
7. The Finnish regulator and TSO explained the situation of ITC mechanism in Europe. All ITC parties should sign a new agreement for 2008 and 2009. The signature will be subject to regulatory approval and if one ITC party does not get regulatory approval, the contract will not enter into force. So if regulators reject to include contributions into national tariffs and TSOs will not voluntarily follow the agreement then there will be uncertainty on the next year’s ITC. Regulators have time until 15 November to make their decision. The agreement means that between the participating TSOs there can not be any cross border tariffs for trades. Estonian TSO pointed out special treatment for Baltic countries in the new agreement. Due to week connections between Baltic grid and the rest of EU grid, the Baltic TSO will participate as one single ITC party. They will collectively pay contribution of 2,2MEUR. This yearly contribution will be independent of changes in flow to and from the Baltic countries. 2,2MEUR will be divided proportionally by ownership in ESTLINK cable, Estonia will pay 976 800 EUR, Latvia and Lithuania will pay 611 600 EUR (each). Baltic Regulators stated that according to the national legislations of Baltic countries there is no procedure of regulatory approval for such agreements. In Lithuania Regulator sets only cap for the transmission tariff. Lithuanian TSO asked, what was done since the previous mini-forum concerning the “pancaking” of transit fee concerning delivery to ESTLINK. Estonian regulator confirmed that only 330 kV tariff will be applied to ESTLINK.
8. Estonian TSO announced the first draft of Summary Paper: Balancing in Baltic region is ready. This document describes the balance management in each Baltic energy system, the common grounds and differences between the countries. It was mentioned that comments from Lithuanian TSO would be especially welcome. It was agreed to establish a new working group, which includes the representatives of the Baltic TSOs, regulators and independent market participants. The goals are to harmonize existing balance system in Baltic region and create common Baltic (balancing) market in future. The working group will be coordinated by the Estonian TSO (Põhivõrk).
9. The representative of Estonian Energy Company gave overview of ERGEG ERI Convergence and Coherence Report, and paid attention to Baltic region. The main issues in the report are congestion management, balancing and transparency. He stressed that ERGEG is waiting for comments till October 12, 2007.
10. The next mini-forum will be organized by the Lithuanian regulator in spring 2008, at the date to be fixed later on.