Latvia: Estonian electricity traffic limits would be at variance with EU principles

Photo: Elering

According to Latvia the accusation of Estonian Minister for Economic Affairs and Communications Juhan Parts against Latvia and Lithuania concerning price fluctuations is groundless, and the electricity traffic limits on the border between Estonia and Latvia would be at variance with the principles of the European Union.

The Latvian Economics Ministry rejects Parts' reproaches to Latvia and Lithuania as ungrounded, spokeswoman for the ministry Evita Urpena told BNS.

She said that Latvia has been working towards opening its electricity market since 2007 and by now 75 percent of customers are buying electric power on the free market. At present regulated tariffs apply only to residential customers but they will also join the free market in April next year in line with Latvia's obligations under BEMIP.

The restricted transmission between Estonia and Latvia is the main factor influencing price differences between the bidding areas in Estonia and Latvia/Lithuania on Nord Pool Spot power exchange, the Latvian Economics Ministry said. For this reason the Latvian power transmission operator, Augstsprieguma Tikls (High-Voltage Grid), is participating in the NordBalt project to increase interconnection capacity between Latvia and Lithuania which is to be completed in 2016, and a new project is being considered to increase interconnection capacity between Latvia and Estonia.

Imposing artificial, politically motivated restrictions on power transmission on the Estonian-Latvian border would create serious doubts about Estonia's ability to ensure compliance with the requirement under the Third Energy Package about independence of a power transmission operator and with the obligation of member states under the EU Treaties to ensure free movement of goods and services, Urpena said.

«If such restrictions are imposed, Latvia will definitely claim from Estonia compensation for all losses that this decision might have caused to consumers in Latvia,» Urpena added.

The Latvian Economics Ministry suggested that, instead of throwing political reproaches at other BEMIP countries, Estonia should rather be encouraging cooperation between power transmission operators to find solutions to ensure sufficient interconnection capacities and effective functioning of the electricity market.

Spokespeople for the Lithuanian Ministry of Energy told BNS that Lithuania was not going to comment on this subject before the meeting of Baltic countries' energy companies on Friday.

The Estonian daily Postimees reported on Wednesday that Estonian Minister for Economic Affairs and Communications Juhan Parts sent a sharp-toned letter to his Latvian and Lithuanian colleagues reproaching them for not opening their electricity markets in a way it was agreed beforehand.

Parts added that Estonia will set limits to electricity traffic on the Latvian  border by means of the power exchange if Latvia and Lithuania do not take steps towards liberalization of the electricity market.

The reason for the minister's ire is the price explosion on the power exchange that took place in the summer when the cost of electricity was 104 euros per megawatt-hour. This is three times higher than the electricity price for residential customers a year ago.