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Baltics Solve Dispute Over Cross-Border Power Flows in Nord Pool

The European Union’s three Baltic states agreed on terms for managing international flows of electricity, settling a dispute that threatened to delay their final integration to the Nordic power exchange in June.

National grid operators Litgrid AB (LGD1L) of Lithuania, Elering AS of Estonia and Augstsprieguma Tikls AS of Latvia today in Vilnius signed an agreement on the calculation and allocation of cross-border capacity, the three companies said in a joint statement. Allocation will be managed by Nord Pool Spot AS from June 3, when the exchange opens a Latvia price area, they said.

Connecting the Baltics to power markets and networks in neighboring EU countries is a priority for the European Commission. Estonia and Lithuania objected in January to a Latvian plan to give Russia import preference, which they said would worsen summer overloads on the Estonian-Latvian border and lead to more Russian imports of power to the region.

“Agreed rules of the capacity allocation with third countries give ability to maximize energy flows on the Estonian- Latvian border for the local market participants,” Taavi Veskimagi, chief executive officer of the Estonian transmission system operator, said in the statement.

Nord Pool Spot has 370 member companies from 20 countries who trade power in the Nordic and Baltic regions, and in the U.K., with 316 terawatt-hours bought and sold last year.

Russian Power

Until Latvia starts trading day-ahead power on the exchange, Lithuania is isolated as it only has cross-border connections to the Russian enclave of Kaliningrad and Belarus, and none to the Nordic or EU power markets. Lithuania has largely relied on Russian electricity since closing its Soviet- era Ignalina nuclear plant in late 2009.

Now Lithuania will be able to import more Estonian and Finnish electricity, Litgrid Chief Executive Office Virgilijus Poderys said in the statement that was published on the websites of all three grid operators.

“Looking at the near future, all three Baltic countries will be able to take advantage of the electricity interconnections between Estonia and Finland more efficiently,” Poderys said.

Baltic power trader Inter RAO Lietuva AB (IRL), which sells electricity supplied by Russian state-controlled OAO Inter RAO UES, its majority owner, said in January that there was enough transmission capacity in the region for all interested parties.

To contact the reporter on this story: Bryan Bradley in Vilnius at bbradley13@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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