Policy Area Energy

Ensuring the full implementation of the existing legislation by sharing best practices and putting in place processes to facilitate application of the “energy efficiency first” principle in policy planning and investment decisions, and facilitate the implementation of the NECPs, and of the long-term renovation strategies to decarbonise the national building stock by 2050.

Gas market integration between Lithuania and Finland, Estonia and Latvia (common market zone) to be developed by 2022.
The Regional Gas Market integration process started as a political process in which the Baltic States’ Prime Ministers endorsed, in December 2015 in Riga, the Regional Gas Market Development action plan and invited Finland to take part in this process. The objective is to establish a competitive regional gas market in Estonia, Finland, Latvia and Lithuania, encompassing all four Member States, to improve market liquidity, integration and competitiveness, ensuring affordable gas prices and high quality service, thus being attractive for existing and new market participants. Market integration is an opportunity for the Baltic States and Finland to best use the existing and future infrastructure like the gas storage facilities, the LNG terminals, the Balticconnector and the GIPL pipeline between Lithuania and Poland. It is also a chance to increase competition to the benefit of the end-consumers in the region and attract suppliers which otherwise would not come as the separate markets are relatively small. This is the general political will, expressed by all parties (TSOs, NRAs and Ministries) of all four countries. In order to achieve timely implementation of market merger, a clear roadmap/action plan towards a final agreement involving all four Member States is necessary early in 2020. This roadmap should ensure that the design of the common regional market is: (i) subject to clear and non-discriminatory rules that effectively facilitate competition, in-line with the EU legislation, in particular the network codes and (ii) based on the regional Cost Benefit Analysis agreed by all parties. Such a roadmap would serve as guidelines for the final design of the gas market integration (common market zone) by 2022. The first steps towards the creation of a regional gas market have been initiated by Latvia, Estonia and Finland.

Electricity market integration
The Baltic region electricity market integration and the role of consumers should be increased in particular by the integration of the regional balancing markets within the European balancing platforms according to the Electricity Balancing Guideline (EBGL).

The synchronisation of the three Baltic States with the European continental grid
The three Baltic states remain synchronously connected to the Russian/Belorussian IPS/UPS system hampering their full integration into the European electricity market and grid. Flagship project of the Energy Union and political priority of the Commission, the synchronisation of the Baltic States with the continental European network by the target date 2025 is key to ensuring secure, affordable and sustainable energy for the Eastern Baltic Sea region, in line with EU’s energy policy objectives, particularly regarding the well-functioning of the EU internal electricity market and energy security.

On 28 June 2018, the Heads of State and Government of the three Baltic States, Poland and the President of the European Commission agreed on a Political Roadmap that defined the process and put forward a concrete solution for synchronising the Baltic States’ electricity system with the continental European network by the target date of 2025. The Heads of State and Government agreed on a scenario and a process for the synchronisation through the existing interconnector between Lithuania and Poland (known as “LitPol Link”), complemented by a new high-voltage cable between Lithuania and Poland (known as “Harmony Link”) and additional optimisation measures (synchronous condensers). A follow-up Political Implementing Roadmap, signed in June 2019, sets an ambitious timetable and specific milestones in order to achieve the timely completion of the project by 2025. Due to the complexity of the synchronisation, the infrastructure investments have been split in phases and their implementation is well underway. The first phase of the synchronisation regards the necessary reinforcements in the three Baltic States and has received financial support under the Connecting Europe Facility that amounts to EUR 323 million.

The transmission system operators form three Baltic States and Poland are working on preparing the second phase of the synchronisation. The investments of the second phase include the update and strengthening of the Polish and Baltic States’ electricity transmission systems and the control systems required for synchronisation. The key to the success of the second phase of Synchronisation is to obtain funding from CEF instrument.

• Commit to continue and intensify cooperation towards the achievement of the binding national and the EU’s 20% renewable targets for 2020, and to ensure the delivery of the national contributions to, and the collective achievement of the binding 2030 EU target of at least 32% (or higher as may be revised), as provided for in the Renewable Energy Directive (2008/28/EC) and the recast Renewable Energy Directive (2018/2001/EU);
• Intend to strengthen cooperation to explore and facilitate the modalities of energy transition with a view of carbon neutral economy and to help Europe achieve climate neutrality by 2050. This includes cooperation and coordination on the development of offshore renewable energy;
• Commit to implement fully the Renewable Energy Directive (2009/28/EC) and the recast Renewable Energy Directive (2018/2001/EU);
• Engage in sharing more best practice on renewable energy communities and renewable self-consumption, the integration of renewables in the building, industry, district heating and cooling sectors, the promotion of advanced biofuels and electrification in transport, as well as sector integration and sector coupling that can help decarbonising the heating, cooling and transport sectors;
• Explore options and funding possibilities to engage in joint projects;
• Continue work on the integration of renewable electricity into the power system and explore possibilities of cooperation in concrete areas, such as the development of the region’s offshore wind potential, investment in and management of the electricity grid, including as regards system services, the use of storage and sector integration or coupling;
• Discuss possibilities and modalities to use cooperation mechanisms, such as cross-border and joint support schemes, joint projects, statistical transfers and the renewable development platform established under the recast Renewable Energy Directive to facilitate delivering the national targets and contributions and to move towards full decarbonisation by 2050;
• Work together in the area of research and development on renewable energy technologies in electricity, heating and cooling and transport, and solutions for sector integration and sector coupling, with the aim of a fuller and more cost-effective use of the region’s R&D capacity and innovation potential, and a more effective use of EU funding possibilities, including those designed for territorial cooperation.
• Promote the concept of “do no significant harm” to the environment for the use of renewable energy and promote synergies with reducing emissions of air pollutants.