0. Lithuanian PX Giedrius Radvila AB “LIETUVOS ENERGIJA” 2009-09-16 Minifora Vilnius

1. Is there a need for a change?
APX UK
OMEL
Powernext
Opcom
GME
NORD POOL PX
Gielda Energi
EEX
APX
Belpx
OTE
EXAA
South Pool
PXE
NORD POOL PX ?
There are a lot of PX across the Europe. The biggest and more advanced PX is Nordpool Spot.
Andrius Šimkevičius

2. Issues that need to be addressed
Closure of second unit of Ignalina NPP
Exporting system becomes importing
Diversification of fuel for electricity production in Baltic states
Projects of new interconnections

3. Background for changes
2008 Cooperation agreement between NPS and Lietuvos energija – Planning of establishment of Estlink price area.
Joint declaration of the prime ministers council of the Baltic (27th April 2009)
Memorandum of understanding of the Baltic energy market interconnection plan (17th June 2009)
Baltic energy market interconnection plan (17th June 2009)
LV, LT, SW memorandum of understanding (9th July 2009)
Lithuanian electricity expansion plan (8th of July 2009)

4. Lithuanian electricity market expansion plan

5. Goals of market development
To improve conditions for consumers to choose or change supplier without any barriers;
To stipulate competition among generators, importers and suppliers;
To remove barriers for the trade with parties from EU;
To set transparent conditions for the trade of electricity imported from non EU countries;
To develop transparent electricity market organization and surveillance based on Nord Pool Spot principles.

6. Changes PX, Wholesale market Generators Suppliers Transmission grid
Support of effective co-generation and renewable energy generation
Unfettered bilateral trade with EU countries, transparently regulated trade with non EU countries
The support of generators does not distort electricity price s and does not create barriers for electricity market operation.
Organization of trade at PX based on Nord Pool Spot principles. Goal – determine
market price of electricity
Generators
Transmission
grid
Distribution
Consumers
PX,
Wholesale market
Suppliers
Source:
Svenska
Kraftnät
Hourly trade and balance responsibility
Transparent transportation of electricity.
Regulated tariffs applicable only for household consumers and small commercial consumers.
Ability to choose supplier, which offers best price and make an agreement for the electricity provision.

7. Changes of electricity market from 1st January 2010
Implementation of Nord Pool Spot (NPS) principles for wholesale trade organization.
Price formation principle - marginal price setting.
Trading platform for anonymously trading at auction until 2011.
Hourly trading and balancing responsibility applied for all market participants.
Unfettered trade with EU countries; Transparent and competition ensuring tariffs for electricity market and transmission grid entrance, clear regulation and control towards electricity produced and imported from non-EU countries.
Implemented non discriminatory and transparent principles of electricity transportation.
Securing independency of TSO according EU regulation.

8. Application of regulated tariffs
Starting from 1st of January 2010, regulated tariffs is going to be abolished for the consumption totaling 35% of Lithuanian demand.
Gradual increase of a share of consumers with non-regulated tariffs:
Starting January 1st, %
Starting January 1st, %
Starting January 1st, 2013 – regulated tariffs are applied only for the household consumers.
Starting January 1st, 2015 for all consumers (except the guaranteed tariffs for the consumer groups designated by EU regulations)

9. Changes Restructuring Lietuvos energija AB
TSO functions
Market operator functions
Import/Export
Operation of power production (KHPSPP, KHPP)
Today
Lietuvos energija AB
Import/Export
Operation of power production (KHPSPP, KHPP)
Independent supplier AB
Trade of electricity
Until 2010
TSO AB
TSO functions
Market operator functions
Lietuvos energija AB
Import/Export, Holding company
Independent supplier AB
Trade of electricity
TSO AB
TSO functions
Market operator functions
2010
Kruonis HPSPP
and Kaunas HPP
Power production
Lietuvos energija AB
Import/Export
Holding company
Kruonis HPSPP
and Kaunas HPP
Power production
MO AB
Market operator
functions
TSO AB
(ISO)
TSO functions
2011

10. Changes Auctioning PX Import/Export Producers LT Producers LT BP1
BP..N
Suplaer1
Suplaer2
Suplaer3
Suplaer4
Consumers
Consumers
Consumers
Consumers

11. Changes Price formation
Price, €/MWh
Demand
Supply
Marginal price for all transactions
at auction, €/MWh
Volume, MWh

12. Changes Gate closure Announcement of transmission capacities by TSO
13:00-16:00
submission of regulation power bids to TSO
correction of regulation power bids volumes and prices
Announcement of transmission capacities by TSO
1 hours before operation hour
10:00
13:00
gate closure
balance
settlement
10:00
Start of DAM trade
Day ahead auction
Operation
hour
Regulation/Balancing
until 13:00 market participants must submit bids and offers
Physical electricity market
1 day before operation day
Operation day (physical delivery)

13. Changes Cooperation with Nord Pool Spot
Prefeasibility study by Nord Pool Consulting.
Seminar by NPC on proposals for Lithuanian DAM
– Negotiations with Nord Pool Spot
Letter of Intent was signed.
Service Level Agreement
TSO MO
NPS
No.73/2009 Nord Pool Spot will deliver the technical solution for new Lithuanian market place
Nord Pool Spot AS and Lietuvos Energija AB today announced that they have signed a Letter of Intent to
implement a new market model for the Lithuanian electricity market.
In the future the Lithuanian market will be based on the same principles as the Nordic power market,
where price and flow are calculated at the same time to increase market efficiency (implicit auction). The parties
aim to establish a service contract where Nord Pool Spot will provide the systems and services from the
Nordic market to the Lithuanian market place.
The technical solution will be ready prior to 1 January 2010, when the new market model is scheduled to start
operating in Lithuania.  
Lysaker, 28 August 2009.

14. Towards an integrated market
Creation of common Baltic’s electricity market based on Nordic electricity market organization principles and gradual abolishment of regulated tariffs for consumers
2009
Isolated Baltic electricity market.
Estlink II
Estlink I
Baltic electricity market integration
Estlink I
Swedish-Baltic link
NORD POOL PX
Common Baltic electricity market
LitPol
link
Polish PX
Gielda Energii
Estlink I
NORD POOL PX
Polish PX
Gielda Energii
Integration of Baltic electricity market into the Nordic and continental Europe electricity markets.
Implementation of projects of new interconnections.
Polish PX
Gielda Energii

15. Thank you. Questions?