Simultaneously with the opening of the Nord Pool Spot (NPS) price area Latvia the Latvian transmission system operator wants to put a part of the transmission capacity between Estonia and Latvia that now is available for trading at the disposal of the bidding area to be set up between Latvia and Russia, the Estonian transmission system operator says.
That would reduce the capacity that can be distributed on the border to about 500 megawatts compared with the approximately 750 megawatts during the summer season now, the CEO of the system operator Elering, Taavi Veskimagi, said in his answer to a question from BNS.
"Statistics of recent years show however that the said capacity is not sufficient in all periods and reduction of capacity would increase the overload on the border further," said Veskimagi. "As a result the electric energy exported from the Nordic countries and Estonia to Latvia and Lithuania during the summer would be replaced with electricity coming from third countries."
The reason why Latvia wishes to set aside one-third of the transmission capacity for Russian electricity is not completely understandable to Elering. "Negotiations between Baltic system operators on the distribution of transmission capacity are still ongoing," Elering spokesman Ain Koster told BNS.
Creation of the Latvian price area in accordance with that model would undermine the functioning of the EU internal electricity market, according to Elering. "With that the goals would be jeopardized in our opinion that have been set out as a political agreement between the countries in BEMIP, and opening of the Latvian price area has to be postponed until a trans-regional agreement has been reached concerning the organization of the Nord Pool Spot price area Latvia," said Veskimagi.
The European Commission in 2008 initiated a project titled Baltic Energy Market Interconnection Plan (BEMIP) for linking up the Baltic countries to the wider European energy market.
The power supply systems of Estonia and Latvia are linked by three transmission lines, two of which run across the bilateral border and the third goes via Russia. Electricity-wise, these three lines constitute a whole, said Veskimagi. "And a solution is possible considering the whole that will not reduce the transmission capacity between Estonia and Latvia after June 3, or the possible opening of the Latvian price area, while simultaneously enabling the import of Russian electricity to Latvia and Lithuania," he said.
"The solution would be to use for Russian imports a common, trans-Baltic virtual bidding area dividing the supplies between the electricity exchanges of the three countries in such manner as to enable to use today's transmission capacities in electricity trade between Estonia and Latvia without causing overload," said Veskimagi.