The
National Energy Regulatory Council (NERC) has coordinated Lithuania's share of the
investments in the project of common interest – Baltic Synchronization Project Phase II –
equal to 474,01 million Eur.
The
total costs for Lithuania, Latvia, Estonia and Poland are 1 219,86 million EUR,
of which investments in Poland are estimated to 535,76 million EUR, in Estonia –
110,60 million Eur, in Latvia – 99,50 million Eur.
The
national energy regulatory authorities (in Lithuania – NERC) take coordinated
decisions on the allocation of investment costs to be borne by each system
operator for the project as well as their inclusion in tariffs.
The
joint agreement on cross-border cost allocation decision for Baltic Synchronization Project Phase II will have to be
signed by Lithuanian, Latvian, Estonian and Polish energy
regulators by the end of April, 2020.
The
entire synchronization project is being implemented in III stages (the
investments of the I stage were coordinated by the Lithuanian energy regulator
on 31 August, 2018, this project has been granted the financial support by the
European Commission).
The
synchronization project consists of investments in the electricity transmission
systems of the Baltic States, upgrades and strengthening of the control systems
required for synchronization, which are necessary regardless of the chosen
synchronization scenario.
In
Lithuania, the synchronization project is being implemented by the transmission
system operator Litgrid AB. Phase II in Lithuania envisages the construction of
a new offshore connection Poland-Lithuania and the construction of the Darbėnai
330 kV substation, reconstruction of the existing transmission line and
construction of a new 330 kV section to the Darbėnai substation, as well as
construction of additional 2 synchronous compensators, renewal and installation
of control systems ensuring the stability of the system, the required
electricity flows and the readiness to operate in synchronous mode with the
Continental European network.
In
the Phase II of the synchronization project Lithuanian and Latvian transmission
system operators also included investments for the Battery Energy Storage
System (BESS) for the frequency regulation. Having assessed the EU regulations
on the market of such services and in order to create an interconnected
internal energy market and an objective, non-discriminatory, transparent market
for system services, NERC coordinated that Litgrid AB has to agree with other
Baltic TSOs on future frequency maintenance reserves and automatic frequency
restoration reserves market model and with national regulatory authorities – on
the terms of the market test to determine the scope of the service and
potential service providers to develop, operate or manage facilities for
frequency maintenance reserves and automatic frequency restoration reserves
services in a cost-effective and timely manner.
Based
on the results of the cost-benefit analysis performed by the Baltic and Polish
transmission system operators, each of the Baltic States and Poland receives a
positive net benefit, so the investment costs of each country are covered by
the respective Baltic or Polish transmission system operator.
For
the financial assistance for the implementation of this project, transmission
system operators of Lithuania, Latvia, Estonia and Poland will submit a joint
application to the European Commission under the Connecting Europe Facility
(CEF), with a maximum possible support intensity of up to 75%.
If
the project were not financed by EU funds, the impact of the planned
investments would be, compared to the regulated electricity price cap for
electricity transmission service set for Litgrid AB in 2020, equal to 0,814
ct/kWh, in 2026–2045 on average to increase by 28,32%. Transmission tariff in
Latvia in 2026-2045 on average would increase by 15,3%, in Estonia – 8,5%.
In
Lithuania, the transmission price in the final electricity tariff (average
undifferentiated price) is about 6,4 percent.
In
Lithuania, the synchronization project is planned to be implemented by 2025.
NEXT
STAGES OF THE SYNCHRONIZATION PROJECT (PHASE II) IMPLEMENTATION:
•
Until 21 April - energy
regulators of Lithuania, Latvia, Estonia and Poland are expected to sign a
joint agreement on cross-border cost allocation decision.
•
Until 22 April - national decisions of Estonian, Latvian and Polish energy
regulators are expected.
•
Until 23 April - the joint agreement on cross-border cost allocation decision of
Lithuanian, Latvian, Estonian and Polish regulators and the related national
decisions will be sent to the transmission system operators to apply to the
European Commission for funding under the Connecting Europe Facility (CEF).
•
Until 27 May - transmission system operators’ application to CEF.
You
can get acquainted with the Phase II investments of the synchronization project here.
