Baltic renewable energy market news #1: August 2021

Electricity market price:

09/02: The price of electricity rose to a record levels in all Baltic states in August.

The average monthly price €87.74 euros MWh in Lithuania, €87.03 per MWh in Estonia and €87.32 per MWh in Latvia.In general, the prices were almost 2x higher than in August 2020.
Main reasons for that:
1) High emission trading system (ETS) price (55-60 Eur per tonne CO2 vs 25 Eur per tonne CO2 in August 2021) due to 2018 ETS reform with withdrawal of allowance in market stability reserve (MSR);
2) Skyrocketing global energy demand due to the fast economic recovery;
3) Subsequently, high price of CO2 and high global energy demand increases the gas price which still plays the key role in electricity production in Europe;
4) Low wind and hydro energy production due to the weather conditions;

While the weather conditions will change and wind energy production will increase in autumn and winter, it is estimated that high ETS prices will remain keeping electricity market price significantly above 2020 level.
https://www.litgrid.eu/index.php/naujienos/naujienos/litgrid-menesio-kainu-apzvalga-rugpjuti-elektros-kainos-isliko-aukstumose/31612
https://www.err.ee/1608326045/elektri-hind-tousis-augustis-eestis-rekordilise-tasemeni
https://www.euractiv.com/section/emissions-trading-scheme/interview/analyst-eu-carbon-price-on-track-to-reach-e90-by-2030/


Lithuania:

08/26: Lithuanian TSO holding company „EPSO-G“ published company group strategy towards 2030.

The main messages for the renewable energy development are as follows:
- Energy system integration prepared of up to 5GW renewables (onshore and offshore) by 2030;
- Prepared for 700MW offshore wind integration by 2027;
- Total €1.8 billion investment into infrastructure until 2030:
- €681 million for synchronization (new electricity TSO network lines and infrastructure);
- €903 million to upgrade/build gas and electricity TSO network;

Ministry of Energy of Lithuania is 100% shareholder of EPSO-G. EPSO-G is the main shareholder in the electricity TSO (Litgrid) and gas TSO (Ambergrid). This strategy for 2021-2030 represents the single shareholder expectations formalised by the Minister letter to the company.
https://www.epsog.lt/lt/naujienos/epso-g-iki-2030-metu-planuoja-1-8-mlrd-euru-investicijas-energetikos-sektorius-keisis-is-esmes

08/23: Renewable Energy Law amendments regarding offshore auction in 2023 is included in the Parliament autumn session programme and is planned to be approved in November.

Cabinet of Ministers approved the updated position on the draft Renewable Energy Law in 4th of August. Auction size is still 700MW with a double-sided CfD and the main change is the grid connection model - shifting from the TSO to developer responsibility.
https://e-seimas.lrs.lt/portal/legalAct/lt/TAP/d11efc4103dc11ecb4af84e751d2e0c9?positionInSearchResults=1&searchModelUUID=fa1261d7-a681-4a9b-8a2c-43c924f5aba4
https://enmin.lrv.lt/lt/naujienos/pritarta-isvadai-del-jurinio-vejo-energetikos-baltijos-juroje

08/04: Lithuanian ministry of energy signed a contract with Klaipėda Coastal Research and Planning Institute for Environmental Impact Assesment (EIA) for 700MW centralized tender area.

The procurement has been temporarily suspended from 05/10 by the court after receiving an appeal by the second place winner, Sweco. The EIA will have to be completed in 2 years and include 2 year bird migration monitoring. The parameters for EIA is that offshore wind park will consist of a range from 43 to 87 wind turbines with capacity from 8 MW to 16 MW and height ranging from 140 m to 300 m.

https://enmin.lrv.lt/lt/naujienos/busimu-jurinio-vejo-elektriniu-poveikio-aplinkai-vertinime-ypatingas-demesys-pauksciu-migracijos-stebejimui

Estonia:

08/25: Estonian electricity system operator Elering and the Latvian system operator AST formally launched the third Estonian-Latvian electricity connection in August.

The new connection adds approximately 600 megawatts of transmission capacity between the two countries. The length of the two lines is approximately 190 kilometres. On Estonian territory, this connection Estonian-Latvian connection comprises the Harku-Lihula-Sindi 330/110 kV line and the Kilingi-Nõmme-Riga 330 kV line section to the Estonian/Latvian border. Estonian Prime Minister and CEO of TSO emphasised its impact to connect offshore wind farms in the future.
https://elering.ee/en/new-connection-latvia-creates-prerequisites-building-offshore-network-and-wind-farms
https://www.ast.lv/en/events/new-330-kv-electricity-transmission-line-estonia-latvia-3rd-interconnection-solemnly


08/11: The draft legal acts for tolerance fee of wind farms for local communities is published for public consultation.

The Minister of Economic Affairs and Infrastructure Taavi Aas sent a draft legal acts to the coordination circle, according to in the future part of the income from wind farms will be distributed to the local residents and local governments directly affected by the park.

An analysis in 2020 showed that a framework that compensates for disruptions from wind farms in the form of local charges or tolerance charges would be appropriate to create greater legal clarity. This solution has also been advocated by developers, local governments and local people.

In the case of onshore wind farms, the fee would be up to 0.5 euros per megawatt-hour of electricity produced, ie in the case of a 100 MW wind farm, the fee would be 150,000 euros per year. The fee is paid in half between the local government and the people living near the windmills. For example, in the case of a 100 MW wind farm, if the fee were divided between the local government and 100 households, each inhabitant would receive about 750 euros per year.

In the case of offshore wind farms, 5% of the building fee is paid, which is, for example, in the case of a 1000MW park, 700,000 euros per year, which is received by the local government. The fee is paid to local governments located closer than 20 km to the nearest wind turbine and distributed among local governments according to the area of ​​influence.

https://www.mkm.ee/et/uudised/tuuleparkidest-saadav-kasu-tuuakse-inimestele-lahemale
https://www.err.ee/1608303432/eelnou-lubab-tuuleparke-lubavatele-omavalitsustele-talumistasu

Latvia:

08/13: Ignitis Group acquired 3 wind farms in Latvia with a total 160MW capacity at the early stage of development.

This is the first investment by Ignitis Group into renewable energy generation capacities in Latvia.
The company is acquiring three wind farms under early stage of development with a total capacity of around 160 MW under conditional agreements.
Wind farm construction should begin around 2024–2025, and expected COD is around 2025–2027.

https://www.ignitisgrupe.lt/en/ignitis-group-entering-latvian-market-acquires-three-wind-farms-under-development