Poland and Lithuania launch power trading to end Baltic isolation

By bne IntelliNews December 9, 2015

Poland and Lithuania launched electricity trading via the LitPol Link, the countries' grid operators announced on December 9. 

The connection between the pair's power grids ends the isolation of the Baltic network from the rest of Europe. It also expands Poland capacity to source energy from abroad, which has long been considered a weakness. 

Trading is still in trial mode, Lithuanian grid operator Litgrid said in a statement. “Regular operations will start only after this trial period, and when completely assured in reliability of the link, but we can feel the impact of the new power flows already,” said CEO Daivis Virbickas.

The recently completed connection known as LitPol Link sees the Baltics - currently heavily reliant on Russia for power, as well as gas - finally plugged in to the EU network. It is a strategic leap for the three small Baltic states, which inherited their energy grids from the Soviet era, and have since struggled to connect to the rest of Europe.

While well connected to the east, the trio have been considered "energy islands" by the EU. Ending that isolation is a major plank in Brussels' push to build an "Energy Union". The EU approved €27.4mn funding for the initial stage of the project in the summer. The total cost to finish the link - forecast for 2020 - is estimated at PLN1.8mn (€440mn).

For the Polish side, the link extends Poland’s capacity to import energy from abroad. Currently, it is estimated Poland could import only 2% of electricity it consumes. The country's ageing power capacity is a major risk to economic development. A power outage in the summer knocked several major industrial companies offline.

LitPol Link also completes the "Baltic Ring," which links power grids around the Baltic Sea and will allow uninterrupted energy flows in northern Europe. Another link connecting Lithuania to Sweden is also set for launch this year. The two interconnectors are expected to drive down electricity prices in the Baltic states.

 

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