The National Energy Regulatory Council (NERC) has prepared the Annual Report on Electricity and Natural Gas Markets of the Republic of Lithuania in compliance with the requirements of Directive 2019/944 of the European Parliament and of the Council of 5 June 2019 concerning common rules for the internal market for electricity and amending Directive 2012/27/EU and of Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC and submitted it to the European Commission.
MAIN DEVELOPMENTS IN THE GAS AND ELECTRICITY SECTORS
Electricity market:
· In 2021, the amount of electricity imported into the Lithuanian Electricity Energy System (LEES) increased slightly compared to 2020 and accounted for 86.7% of the country's total electricity demand in 2021 (demand — 13.7 TWh).
· In 2021, the country generated 4.69 TWh of electricity, imported 11.91 TWh and exported 2.87 TWh. The national electricity consumption in 2021 was 12.76 TWh. The total installed capacity of the power plants decreased to 3,667 MW in 2021 (3,721 MW in 2020).
· Total network investments in 2021 remained similar compared to the previous year: the investments of the Distribution System Operator (DSO) amounted to EUR 102.7 million in 2021 (an increase of 3.9% compared to 2020), while the investments of the TSO for the same period amounted to EUR 53.13 million, which is 3.6% less than in 2020 (EUR 55.12 million).
· The maximum hourly electricity demand (net) in Lithuania in 2021 was 2,217 MWh (14.38% more than in 2020), including 1,990 MWh in the distribution grid (5.9% more than in 2020).
· In 2021, NERC regulated 4017 undertakings in the electricity sector. This includes licensed or permit-regulated activities for independent power supply, independent power aggregation, transmission, distribution, public supply and electricity generation, as well as authorisations to develop generation capacity.
· In 2021, 96 companies held independent power supply permits, of which 29 were active in independent power supply.
· At the end of 2021, 3,815 entities (natural and legal persons) held electricity production permits issued by NERC, of which 1,312 were prosumers.
· In 2021, NERC issued 7 permits for independent power supply. In order to carry out activities in the electricity sector, undertakings are required to obtain a NERC permit. When applying for a permit to develop electricity generation capacity, a copy of the pre-conditions for connection of the power plant to the grid issued by the grid operator is required, in addition to the other required documents.
· In 2021, 252 permits to produce electricity and 628 permits to develop electricity production capacity were issued.
Natural gas market:
· Natural gas imports in 2021 amounted to 26,307 GWh, 21.6% lower than in 2020. In 2021, compared to 2020, natural gas sales increase by 13.82%, from 19,360 GWh to 22,036 GWh.
· In the natural gas sector, NERC regulated 44 undertakings in 2021. In the natural gas sector, transmission, distribution, storage, liquefied natural gas (LNG) regasification, supply and market operator activities are licensed or regulated by permits.
· 36 companies held natural gas supply permits, of which 20 were operational.
· UAB “GET Baltic" traded 7,956,662 MWh of natural gas on the natural gas exchange in 2021. Compared to the 2020 period, the volume of natural gas traded on the natural gas exchange of UAB “GET Baltic" was 9.43% higher. In 2021, 23,846 GWh of natural gas was sold and/or consumed on the wholesale natural gas market, an increase of 1.92% compared to the 23,397 GWh of natural gas sold and/or consumed in 2020.
· The revenues of the natural gas sector (transmission, distribution, LNG regasification, supply) amounted to €913 million in 2021, almost 1.5 times higher than in 2020 (€366.21 million) as a result of the increase in the price of natural gas product. In 2021, the revenues of transmission and LNG system operators were lower than in 2020, while the revenues of supply companies and the revenues of regulated activities of SSOs were higher than in 2020. The increase in revenues of natural gas supply companies is due to the increase in the price of imported natural gas (product) purchased bilaterally and on exchanges in 2021.
· The total investment in the natural gas sector in 2021 is EUR 56.6 million, a decrease of EUR 51.8 million or 47.78% compared to 2020 (EUR 108.4 million). During the period covered by the transmission activities, significant Projects of Common Interest (PCIs) were being developed, namely GIPL and Enhancement of Latvia-Lithuania interconnection (ELLI).
· In 2021, NERC approved on average 29% lower Amber Grid's transmission service prices, applicable from 1 January 2022. In order to ensure competition between sources of natural gas imports, as well as to promote competition between natural gas suppliers and not to create additional market barriers to the use of LNG terminal gas, and taking into account the natural gas transmission price decisions of the Latvian, Estonian, and Finnish Common Price Area (FINESTLAT), whereby natural gas transmission prices for the upstream entry points of the FINESTLAT Common Price Area are set at a uniform level, NERC has established an input cost allocation ratio of 82.11% for the entry points, and a discharge ratio of 17.89% for the exit points. Taking into account that the discount at the entry point of the Klaipėda gas metering station will increase competition on the natural gas market and stimulate the use of the LNG terminal, NERC agreed to apply a 75% discount at the entry point of the Klaipėda gas metering station.
· No decision has been taken on the establishment of a common price area for transmission services between Lithuania and the FINESTLAT countries and the ITC mechanism to be applied in 2021. However, in 2021, the national regulators of the Baltic States and Finland examined the ITC agreement submitted by the TSO. At the end of March 2022, the TSOs submitted a revised ITC agreement, which is being assessed by national regulators. It is expected that the common transmission service area between Lithuania and FINESLAT could be operational from October 2023.
The full translated Report will be accessible on the NERC website www.vert.lt and on the CEER website www.ceer.eu in September 2022.
Reports of previous years are presented here (in English).
