Consultation on the Capacity Mechanism
On 5 February 2019, the Ministry of Energy held a public discussion, introducing the concepts of the capacity mechanism and system services. This was the first stage of public consultation with stakeholders, during which the comments and suggestions received were evaluated to form the final proposals for the development of a capacity mechanism in Lithuania and the concepts of ancillary services.
The implementation of the capacity mechanism is particularly important in implementing the objectives of the Lithuanian National Energy Independence Strategy, which relate to the development of electricity generation from renewable energy sources, increasing local power generation in the country, and smooth synchronisation of the Lithuanian power system with the continental European system.
The developed concept (can be found here) is intended to help Lithuania select the most appropriate model of the capacity mechanism and to define its stages and envisage the responsibilities of all participating stakeholders in preparing the relevant legislative changes.
Following a public discussion, the Ministry of Energy issued a call for proposals and comments onspecific public consultation matterswith regard to the capacity mechanism model being formed in Lithuania, to be submitted by 19 February 2019.
After evaluating all the relevant criteria and the proposals received during the public consultation, it was decided that a market-wide capacity mechanism model best suits Lithuania’s needs. The selected model would allow maintaining both competitive existing capacities and attracting investment in new capacities. In addition, the market-wide model is technologically neutral, does not discriminate among different types of capacities, such as generation, independent electricity demand response aggregation and storage, and creates competition among them.
On 8 October 2019, the Ministry of Energy held a public discussion, during which it presented to the stakeholders the capacity mechanism model being developed as well as the amendments to the Law on Electricity announced on 24 September 2019, which provide for the implementation of the capacity mechanism in Lithuania. During the meeting the participants took interest in the conceptual and practical matters related to the development and implementation of the capacity mechanism, participation in capacity auctions. The presentation given during the discussion can be found here.
Pursuant to Article 21 (2) of Regulation (EU) 2019/943 of the European Parliament and of the Council of 5 June 2019 on the internal market for electricity, which requires Member States, before introducing capacity mechanisms, to conduct a comprehensive study of the possible effects of such mechanisms on the neighbouring Member States by consulting at least its neighbouring Member States to which they have a direct network connection and the stakeholders of those Member States, on 12 May 2020 the Ministry of Energy held a consultation with neighbouring Member States regarding impact assessment of capacity mechanism to be introduced in Lithuania. Representatives of ministries, regulatory authorities and transmission system operators from Estonia, Poland, Latvia and Sweden were invited and took part in this consultation.
According to the concept of the capacity mechanism, planned to be introduced in Lithuania, Lithuania has initiated conduction of impact assessment on possible effects of capacity mechanism which was performed by international consulting company FTI France S.A.S. (Compass Lexecon). Task of this impact assessment was to evaluate possible impact of capacity mechanism on Lithuanian energy market and neighbouring countries.
During the consultation organised by the Ministry of Energy, results of impact assessment were presented. Impact assessment revealed that capacity mechanism planned to be introduced in Lithuania will have no major impact on electricity markets of neighbouring Member States.
The report of the consultations and the written questions received from the parties are available here.
Press releases:
2019 02 01
2019 02 08
2019 10 04
Ministerija kviečia aptarti kuriamą pajėgumo mechanizmo modelį
2019 10 10 2020 05 15
2020 05 15
Lietuvoje kuriamas pajėgumų mechanizmas pristatytas regiono partneriams
Last updated: 28-11-2023