Implementation of Integration Problem for Baltic Energy Systems into Continental Europe Energy Anatolijs Mahnitko1 , Professor Timur Kuznecovs2 , Dr.ing.sc. Leading specialist Tatjana Lomane1 , Asoc. Professor Jurijs Siliņēvičs2 , M.sc.ing Inga Zicmane1 , Professor 2 High Voltage Department, Darzciema Str. 86, 1 Riga Technical University, Riga, Latvia Riga, Latvia [email protected], [email protected] [email protected], [email protected] [email protected] Abstract— With the restoration of the Baltic States economic independence was focused on strengthening and independence, they faced problems both of a political and developing the energy sector, which is the basis for the economic nature. First of all, these problems were caused by the development of all other sectors of the economy. need to strengthen the energy independence of the Baltic States, since historically its power systems worked in synchronous mode The energy sector of the Baltic States has undergone many with the United power system of Russia, depending on its mode significant changes over the past decade. In a relatively short of operation. It was the Baltic States ' desire to eliminate energy period, from the closure of the Ignalina nuclear power plant, dependence on a single energy supplier that determined their which changed the balance of base capacity in the Baltic desire to integrate their transmission networks into the electrical region in a competitive market - from a large producer and system of continental Europe. The solution to this problem exporter of electricity, Lithuania has become the largest allows the Baltic States to strengthen their energy independence importer. Electricity generation in Estonia will not meet its and become a full participant in the electricity market of electricity needs in the near future. Latvia, in accordance with continental Europe. Aspects of integration of the Baltic power its base capacity, is able to make a correct and far-sighted systems with the power systems of continental Europe are decision, but it alone is not able to bear the increased pressure considered. There are made the analysis of the current state and of the base capacity deficit on its own shoulders. This problem development of the infrastructure for the Baltic States electric must be solved by all the Baltic States together. systems, the development of electricity trade between the Baltic States and continental Europe, the problems of shortage and The Baltic States need to think about how to compensate increase of base capacity in the region. The characteristics of the for the lack of basic capacity, which will affect both the energy and climate national plans published by the Baltic States electricity produced for a competitive market and the are given, which consider their intentions to develop renewable reliability of the region's electricity supply after the change in energy production for the period up to 2030, which provide for a 2025 of the synchronization zone of the Baltic countries ' significant increase in electricity production due to wind farms. power systems. The national energy and climate plans The possibilities of reducing the risks of power supply reliability published by the Baltic States for the period up to 2030 to consumers when there is insufficient balance of supply and provide for a significant increase in the share of electricity demand to maintain the power balance are considered. production from renewable energy resources. This means that Index Terms-- Electric networks, Integration, Synchronization, the Baltic energy systems should expect the development of Infrastructure, Electricity market the generating capacity using wind, solar and other distributed sources, and, consequently, the necessary increase in balancing power. The analysis of the aspects of integration of I. INTRODUCTION the Baltic power systems with the power systems of Historically, the Baltic power systems have operated in continental Europe and the convergence of the EU power synchronous mode with the United power system of Russia, markets is made on the basis of official sources published which in terms of electricity consumption is about 40 times recently [1 - 20 ]. greater than the Baltic power consumption. Parallel synchronous operation of the Baltic power systems with such II. CHARACTERISTICS OF THE CURRENT a powerful unified power system of Russia provided reliable SITUATION IN THE BALTIC STATES power supply to consumers with high-quality electricity. The restoration of independence and the accession of the Baltic A. Electrisity production States to the European Union (EU) in 2004 set them a number In recent years, the structure of electricity production in of tasks for changes and reforms, both in political and the Baltic States has not changed rapidly, but there is clear a economic directions. Special attention in strengthening stable trend of increasing production from renewable energy This research is funded by the Ministry of Economics of the Republic of Latvia, project “Innovative smart grid technologies and their optimization (INGRIDO)”, project No. VPP-EM-INFRA-2018/1-0006.l 978-1-7281-9510-0/20/$31.00 ©2020 IEEE resources and decreasing production from fossil energy to integrate the electricity markets of their countries into the resources. Electricity consumption was stable with a slight electricity market of the United Europe. In order to ensure upward trend. For example, over the past five years, electricity integration with the European power grid, the Baltic TSOs consumption in Estonia has increased by 7 % and in Latvia by have been considering various integration projects over the 2%. The data published in Lithuania for this period show a 26 past 10 years. The success of integration is the best evidenced % increase in consumption, and most of this increase in by the activity of the electricity market. So, for example, if in consumption since 2017 was created due to a change in the 2014 the available intersystem power reached 800 MW, then method of accounting for consumption, when consumption in 2018 this power on average reached the level of 1900 MW includes consumption of hydro accumulating power plant [4]. Baltic market participants have become more active in Kronio in pump mode. In recent years, the Baltic States have using European electricity markets. If in 2014 the volume of produced about 80 % of their electricity, of which about 60% electricity trade between the Baltic States and Europe was 3.5 is generated by burning fossil fuels (mainly coal and natural TWh, in 2018 it was approximately 8.7 TWh (Fig.2). gas), and 40% is generated from renewable energy resources (mainly hydro and wind). For 2017 and 2018 years, electricity Finland generation from renewable energy resources has reached its 1.55 TWh historically highest volumes (exceeding 10 TWh and 8 TWh, respectively). The specific weight of electricity production from renewable sources in the Baltic energy systems, as well as in the EU, is constantly increasing (Fig.1), what follows from official sources [8]. production consumption 3.52 TWh 70% 65% 60% Non-renewables 55% • production consumption 50% 2.44 TWh 45% Sweden 40% Renewables 2.71 TWh Belorusia 35% 2.56 TWh Kaliningrad 30% 2010 2011 2012 2013 2014 2015 2016 201 7 2018 2.94 TWh production consumption Poland Figure 1. The specific weight of generated capacity from renewable and 0.91 TWh non renewable energy resources in the territory of ENTSO-E member countries. B. Electrisity market Figure 2. Electricity generation, consumption and total commercial flows of electricity by the Baltic States in 2018. As is known [4], the total annual electricity consumption of all EU countries exceeds 3000 TWh. At the same time, the This indicates that, both in the case of a shortage and an total electricity consumption of the Scandinavian countries is excess of electricity, Baltic market participants had access to approximately 400 TWh per year. The total electricity a wide, diversified and competitive market in order to carry consumption of the Baltic States ranges from 25 TWh per out transactions at economically reasonable prices. One of the year. A visual comparison of the above electricity most important indicators of the level (degree) of integration consumption indicators shows that the Baltic power systems of the Baltic electricity market is the convergence with the are relatively small power systems. However, over the past prices of neighboring regions (Fig.3). This has been five years, electricity trade between the Baltic States and particularly evident since 2016, when the NordBalt Europe has grown by 250 %. Fig.2 shows the scheme of (Lithuania-Sweden) and LitPol (Lithuania –Poland) generation, consumption and commercial flows of electricity interconnections were put into operation. At this time, in the Baltic States. electricity prices have come closer, both for the Baltic States, Certain factors in small power systems, including and for the Baltic region and the Scandinavian countries in reliability of power supply, competition between producers, general. Back in 2014, the average spot price difference and power supply costs, are particularly dependent on between Latvia and Estonia was 12.5 EUR/MWh, and in opportunities for external interstate electricity trade. 2018 it decreased by more than five times and reached 2.3 Therefore, the main strategy of the Baltic transmission system EUR/MWh. A similar trend is also observed in the price operators (TSO) to ensure a stable and economically dynamics of the Baltic and Scandinavian markets. Back in affordable electricity supply to consumers for the long term is 2014, the average spot price difference in Latvia and Estonia was 14.1 EUR/MWh, while in 2018 it decreased by more North-South direction and increased reliability of power than five times and reached 2.6 EUR/MWh (Fig. 2. and supply section between Estonia and Latvia, as well as the Fig.3.) [4]. The convergence of prices indicates increased infrastructure required for successful synchronization of the competition, since price equalization in the case of Baltic States electrical systems with the transmission competition is less dependent on the limitations of the networks of continental Europe.