About BALTSO 2 Historical Development 3 The Main Objectives of the BALTSO Foundation Agreement Governing Bodies of BALTSO Leader’s Foreword 5 Lithuania 6 Latvia 7 Estonia Report of the BALTSO Committee 8 The Changes in the Operation and Control of the Baltic Power Systems 10 Security of Supply of the Baltic Transmission Network 11 International Cooperation 12 New Interconnection via Estlink Development of BALTSO 14 Energy Policy in the BALTSO Countries 18 Transmission and Future Projects Main Events of the Year 24 Lithuania 25 Latvia 26 Estonia Statistics 27 Installed Capacity in the Baltic Interconnected Power System 29 The Transmission Grid in the BALTSO Countries 30 Consumption and Production 44 Interconnections 45 Renewable Energy 46 Exchange of Electricity 47 Prognosis About BALTSO Historical Development For several decades the Baltic Interconnected Power System the Treaty on Parallel Operation of Baltic Energy Systems. (Baltic IPS) was part of the Unifi ed Power System of the The three Baltic Transmission System Operators decided to North-Western region of the Soviet Union and was known liquidate DC Baltija by the end of 2006 and The Founda- as the Northwest Interconnected Power System of the Uni- tion Agreement of the Estonian, Latvian and Lithuanian fi ed Power System (NW IPS of UPS). It connected the power Transmission System Cooperation Organisation BALTSO systems of Belarus, Lithuania, Latvia and Estonia, and the was signed on 30th of March 2006 in Riga, Latvia by the power systems of six administrative regions of Russia. The representatives of OÜ Põhivõrk from Estonia, Augstsprie- system was supervised and controlled by the Control Centre guma Tīkls AS from Latvia and Lietuvos Energija AB from of the NW IPS of UPS in Riga, Latvia. Lithuania. On 7th of January 1992, the three Baltic States – Estonia, The main aim behind the establishment of the non-profi t Latvia and Lithuania – concluded the Treaty on Parallel BALTSO was to promote cooperation between transmis- Operation of Power Systems. To supervise and control the sion system operators in Estonia, Latvia and Lithuania as system, the DC Baltija Control Centre was established in the member organisations had all been granted a power Riga using the assets and human resources of the former transmission license in Estonia, Latvia or Lithuania. Control Centre of the NW IPS of UPS. On 28th of December 2006, AS Augstprieguma Tīkls, Lietu- From the 7th of February 2001 the operation of Belarus, vos Energija AB and OÜ Põhivõrk signed the Agreement on Russian, Estonian, Latvian, and Lithuanian power systems is the Parallel Operation of the Power Systems of Lithuania, based on the Agreement on parallel operation of these fi ve Latvia and Estonia. power systems. The responsibilities of the different opera- tors, control of power exchange between areas and other The reporting period of BALTSO is one calendar year; rules of synchronous operation of power systems were the Organisation does not have its own fi nancial budget or disclosed in the BRELL Agreement and in its amendments. fi nancial resources. The working language of the Organi- sation is either English or Russian at the discretion of the In the beginning of 2006 as a response to the changes governing body of the Organisation in the energy market, the Baltic parties agreed to revoke 2 The Main Objectives of the BALTSO Foundation Agreement • to create and maintain the conditions necessary for development and assure the reliable operation of the Power Systems of Estonia, Latvia and Lithuania; • to support the coordinated and safe operation of the electric energy markets of Estonia, Latvia and Lithuania; • to promote cooperation between the Organisation and its Members on one hand, and the energy companies of non-Member countries on the other; • to handle public relations of the Baltic energy system and electricity markets; • to promote relations with other organisations and institutions in the Baltic States, in Europe and in the rest of the world. Governing Bodies of BALTSO LEADERS’ MEETING The Leaders’ Meeting is the highest governing body of the organisation and is held annually in rotation in each member country not later than on 30th June. The main functions of the Leaders’ Meeting are to approve the annual reports of the organisation and to take decisions on any issues raised by the Committee, the Working Groups or the Secretariat. Resolutions taken by the Leaders’ Meeting are binding, while recommendations are only advisory. For resolutions to be taken, it is necessary for each member to be represented, and each member has one vote. THE COMMITTEE The Committee is a collegiate executive body of the organisation and consists of two representatives from each member. The Committee meets as frequently as practicable in each member country in rotation, and the meetings are con- vened by the Secretariat. All management representatives need to be present for decisions to be taken, and in total fi ve Committee Meetings were held during the fi rst reporting period (April 2006 until June 2007) 3 The functions of the Committee are to: • prepare and draft the annual reports of the organisation; • prepare and draft resolutions for the Leaders’ Meeting and adopt recommendations taken in the meeting; • establish ad hoc Working Groups to research and analyse specifi c matters which may arise; • organise third-party consultants if specialists are required for specifi c research or other tasks on behalf of BALTSO, the costs being divided equally among the members; • review and consider reports made by Working Groups. During 2006 Committee members were: • Vladas Paskevicius and Ramunas Bikulcius from Lietuvos Energija AB; • Imants Zviedris and Varis Boks from Augstsprieguma Tīkls AS; • Valeri Peterson and Mart Landsberg from OÜ Põhivõrk BALTSO has three permanent working groups: • Operation & Security – convener Voldemars Lapinskis from Augstsprieguma Tīkls AS • Development – convener Mart Landsberg from OÜ Põhivõrk • Information Technology & Communication – convener Ramunas Maksimovas from Lietuvos Energija AB All working groups have had their plans for each reporting period approved by the Committee. THE SECRETARIAT The Secretariat is a permanent body of the organisation which ensures its day-to-day operations. The functions of the Secretariat are performed by the members in rotation so that each member performs the functions of the Secretariat for one reporting period and is responsible for the Secretariat’s expenses during that period. The functions of the Secretariat are to: • convene the Annual meetings and meetings of the Committee; • perform secretarial, administrative, record keeping, accounting and other auxiliary clerical functions; • handle the external communications of the Organisation; • ensure that the permanent and current archives of the organisation are properly maintained. In the 2006 reporting period the functions of the Secretariat of BALTSO were performed by OÜ Põhivõrk with Valeri Peterson as secretary, and Kätlin Kruus as staff. 4 Leaders’ Foreword Lithuania For several decades, Lithuanian, Latvian and Estonian energy specia - lists have been working with one accord to secure the reliable supply of electricity to consumers, and the stable operation of the power system in the region. Signifi cant changes and challenges will be taken up in the achievements is the successfully completed Estlink intercon- Baltic power system to ensure the security of the power nection cable between the power systems of Finland and system, the reliability of electricity supply, and a decrease in Estonia. Our short term targets are to achieve the reliable dependence on primary energy resources. I am confi dent that integration of the Baltic power system into a single European BALTSO will play an immense role in handling the essential market by interconnecting the transmission grids of Lithuania issues of the parallel operation of the power systems of the and Poland, and to complete the feasibility study for an Baltic States, in promoting cooperation between the power interconnection between the grids of Sweden and Lithuania. companies and third parties, and in making useful contacts These new interconnecting lines will enable the Baltic States with other organisations and institutions in the Baltic States, to reduce signifi cantly their energy dependence, will enhance Europe and other countries around the world. the reliability of electricity supply, and will serve to fulfi l a major precondition for entry to the European electricity market. However, at present the Baltic power system, and conse- quently the economies of all three countries, is facing a We will strive to make BALTSO an infl uential organisation, loo ming problem which casts a shadow over future deve- not only by achieving all these targets, by resolving the prob- lop ment. In 2009 the biggest electricity producer in the Bal- lems of the power companies of the Baltic States, and by tics – Lithuania’s Ignalina Nuclear Power Plant – will be shut faci litating technical solutions in system development or the down, and it is clear that in order to satisfy growing demand joint operation of the Baltic power companies, but also by for electricity in the region, this lost capacity will have to be making an input in dealing with matters of common concern replaced by new generation sources. A joint project being – the reliability of power systems, the optimisation of energy undertaken by Lithuania, Latvia, Estonia and Poland to resources, and other similar subjects in the electricity