Market Options for Developing Flexible Local Power Generation Being Assessed

Date

2018 11 13

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The Ministry of Energy is calling out to existing and potential market participants regarding the development of new electricity generating capacities. Market participants are being asked to provide information about plans to develop reliably available electricity generating capacities with a total output of more than 10 MW and an expected launch date before 2024.

According to Minister of Energy Žygimantas Vaičiūnas, flexible, competitive and dependable local power generation is needed to ensure reliable electricity supply and system operation.

“Now our goal is to objectively assess the plans of existing and potential electricity market participants to develop new electricity generating capacities. Once the market options have been assessed, the necessary steps will be taken to allow for the emergence of new and flexible power plants that will ensure system reliability. If there are not enough incentives for the development of local power generation under market conditions, the state can take measures to ensure security of electricity supply and reliable operation of the electricity system”, says Minister Vaičiūnas.

In September 2018, Kaunas University of Technology conducted the first probabilistic adequacy assessment of the Lithuanian electric power system through 2030. The assessment, which was commissioned by the Ministry of Energy, has made it possible to objectively evaluate the demand for flexible local power generation.

The assessment showed that in the near future, the development of reliably available and effective local capacities will be necessary in Lithuania in order to ensure reliable operation of the electric power system and security of electricity supply. In addition, smooth operation of the Baltic power system and reliable electricity supply will have to be ensured as of 2025, after transition to the synchronous mode of operation with the grid of Continental Europe.

The joint long-term adequacy analysis of the Baltic power system conducted by the electricity transmission system operators of Lithuania, Latvia and Estonia last year also identified the need for new power plants in the Baltic States in the medium term, since the existing power plants are getting old and are inefficient. According to the study, the Baltic power system may experience a primary reserve deficit of approximately 200 MW in certain cases.

As stipulated in the Law on Electricity, if no one is interested in installing new generation capacities or energy efficiency and demand management measures, a tender (auction) can be announced for the installation of new electricity generating capacities. This could be ensured by developing and applying power market mechanisms that would promote balanced investment in the development of reliably available local power generation.

Information about plans, after evaluating power market trends in the Baltic region in the short and medium term, to develop reliably available electricity generating capacities with a total output of more than 10 MW and an expected launch date before 2024, is asked to be submitted by 23 November 2018 to the Ministry of Energy by e-mail at: gediminas.karalius@enmin.lt.

Invitation to submit information signed by the Minister of Energy can be found here.