Baltic, Energy, Energy Market, EU – Baltic States
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Friday, 29.03.2024, 14:48
Baltic PMs trying to sort out differences over energy projects
No specific decisions or agreements are expected to be made
on Monday. However, the top-level exchanges of opinions are crucial for
Lithuania that aims to persuade its neighbors about the need for the LNG
terminal already operating in Lithuania to secure European funding, as well as
the possibility to synchronize power grids via Poland by a single link.
Lithuania wants the existing LNG terminal in Klaipeda to be
granted 100-150 mln euros in EU support, a step which requires the approval of
Latvia and Estonia. Estonia has ambitions to build a LNG terminal itself and
would like to secure EU support.
Lithuania's Energy Minister Zygimantas Vaiciunas said before the meeting that exchanges with
the Latvian and Estonian heads of government should open a new page.
Vaiciunas told BNS that the meeting would address efforts to
ensure long-term safe gas supplies, that is, discussions will take place to
identify the project that will apply for European funding.
"They will talk about ensuring safe long-term gas
supplies to the Baltic states and the most cost-efficient solution for all
consumers in the Baltic states. There will be no specific decisions, it will be
a process," Vaiciunas told.
Monday's meeting in Tallinn will kick off the so-called LNG
tour, as the three prime ministers will discuss funding for the terminals ahead
of their planned trips to Klaipeda and Incukalns, Latvia.
Another regional energy project that is subject to disputes
is synchronization of the Baltic power grids with continental Europe. For now,
both Estonia and Latvia disapprove of the Lithuanian plan to synchronize the
networks via a single interconnection of LitPol Link. They want a second link
to be built, saying that otherwise they will consider the possibility of
synchronization via the Nordic countries.
Estonian Prime Minister Juri
Ratas described it as essential to achieve clarity as soon as possible over
the way how the Baltic grids will be synchronized with the power system of
Central Europe. "Synchronization with the European energy system must
ensure the security of supply and energy security of the Baltic countries on
the required level, enable the functioning of the electricity market in the
present form, and the project's impact on the end price of electricity must be
as small as possible," Ratas said.
Ratas said that Estonia supports moving forward with the
plans for a regional LNG terminal. "The LNG terminal situated on a rented
vessel that Lithuania set up at Klaipeda port did bring a rapid solution when
it comes to the diversification of the sources of supply for the region, but
the long-term solution would nevertheless be the construction of a regional LNG
terminal on the coast of the Gulf of Finland," the Estonian prime minister
said.
"The regional LNG terminal must emerge based on market
logic. If a market failure occurs, it is possible to seek EU cofinancing for
the establishment of the regional LNG terminal," Ratas said.
The European Commission's Joint Research Center said in its
findings that the best synchronization scheme for the Baltic states is via two
LitPol Link interconnections, which would entail a cost of 770-960 mln euros,
while the synchronization via a single link would cost 900 mln euros.
Synchronizing the Baltic states with the Nordic region is estimated to cost
from 1.36-1.41 bln euros.
After Latvia and Estonia voiced doubts about the single-link
synchronization, Lithuania's electricity transmission operator Litgrid proposed to build the second
link after 2025, the planned date for project completion and disconnection from
the Russian BRELL electricity ring.