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 2022, the amount of electricity imported into the Lithuanian Power System (hereinafter referred to as the LPS) increased slightly, compared to 2021 and accounted for 87.5% of the country's total electricity demand in 2022 (demand – 12.8 TWh).
In 2022, the country generated 4.25 TWh of electricity, imported 11.22 TWh of electricity and exported 2.65 TWh. In 2022, the country's electricity consumption amounted to 12.04 TWh. The total installed capacity of the power plants increased to 4,279 MW in 2022 (3,667 MW in 2021).
Total network investments in 2022 increased compared to the previous year: the investments of the Distribution System Operator (hereinafter referred to as the DSO) amounted to EUR 240.10 million (an increase of 136.18% compared to 2021), while the investments of the TSO for the same period amounted to EUR 34.15 million, which is a decrease of 35.71% from the level of the investments in 2021.
The maximum hourly electricity demand (net) in Lithuania in 2022 was 2,137 MWh (3.61% less than in 2021), including 1,883.20 MWh in the distribution network (5.37% less than in 2021).
In 2022, in the electricity sector, NERC regulated 5,279 undertakings. This includes licensed or permit-regulated activities for independent power supply, independent power aggregation, transmission, distribution, public supply and electricity generation, as well as permits for the development of generation capacity. At the end of 2022, the following undertakings were granted the licences issued by the NERC: AB “Litgrid" – electricity TSO, AB “Energijos skirstymo operatorius", AB “Achema", AB “Lifosa", AB “Akmenės cementas", and UAB “Dainavos Elektra" – DSO, UAB “Ignitis" (former UAB “Lietuvos energijos tiekimas"), AB “Lifosa" and AB “Akmenės cementas" – public electricity suppliers.
In 2022, 95 undertakings had permits for the independent supply of electricity, of which 20 were engaged in the activity of the independent supply of electricity.
By the end of 2022, 4113 undertakings (natural and legal persons) held permits for the generation of electricity issued by the NERC (excluding prosumers).
In 2022, 14 permits for the independent supply of electricity were issued.
In 2022, NERC issued 810 permits to carry out activities in the electricity sector, of which 304 were for the generation of electricity and 506 for the development of electricity generation capacity.
When applying for a permit to develop electricity generation capacity, in addition to other mandatory documents, it is necessary to submit a copy of pre-conditions for the connection of the power plant to the power networks issued by the network operator. A NERC permit for the development of electricity generation capacity is not required for prosumers (as of 8 July 2022), and if a person intends to build or install electricity generation capacity with an installed capacity of 100 kW or less.
Natural gas market:
In 2022, natural gas imports amounted to 36,078 GWh, an increase of 37.14% compared to 2021. In 2022, natural gas sales increased by 61.21% compared to 2021, from 22,036 GWh to 35,523 GWh.
In the natural gas sector, NERC regulated 55 undertakings in 2022. In the natural gas sector, transmission, distribution, storage, liquefied natural gas (LNG) regasification, supply and market operator activities are licensed or regulated by permits.
51 undertakings had permits for the supply of natural gas, of which 35 were operating.
6,946,553 MWh of natural gas was traded on the UAB “GET Baltic" natural gas market in 2022. Compared to the same period in 2021, the volume of natural gas traded on the UAB “GET Baltic" natural gas market was 12.70% less. In 2022, 35,176 GWh of natural gas in the wholesale market of natural gas was sold and (or) consumed, i. e. 47.51% more, compared to 23,846 GWh of natural gas sold and (or) consumed in 2021.
In 2022, the total income within the natural gas sector (transmission, distribution, LNG regasification, supply) amounted to EUR 4,186 million, i.e., almost 4.6 times higher than in 2021 (EUR 913 million), due to the increase in the price of the natural gas product. In 2022, the revenues of DSOs' regulated activities were lower than in 2021, while the revenue of transmission, LNG system operators, and supply undertakings were higher than in 2021. The increase in the revenues of the natural gas supply undertakings was due to an increase in 2022 in the price of imported natural gas/product, which is purchased bilaterally and on exchanges.
Total investments in the natural gas sector in 2022 amount to EUR 30.6 million, i.e. EUR 34.3 million or 52.85% less compared to 2021 (EUR 64.9 million). In the transmission activities, significant PCI projects – GIPL and Enhancement of Latvia-Lithuania interconnection (ELLI) – were developed during the period.
NERC approved an average 39% increase in AB “Amber Grid" transmission service prices for 2022, applicable from 1 January 2023. 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 FINESTLAT's natural gas transmission pricing decisions, which set uniform natural gas transmission prices at the entry points of the common price area of FINESTLAT, NERC set a cost allocation ratio of 87.36% at the entry points and 12.64% at the exit points. Taking into account that the Klaipėda LNG terminal has become the main source of natural gas imports to Lithuania, NERC removed the discount at the Klaipėda entry point in 2023.
The decision on the establishment of a common price area for transmission services between Lithuania and FINESTLAT countries and the ITC mechanism to be applied in 2022 has not been adopted. In this regard, on 12 October 2022, the Chairpersons of the Baltic-Finnish national regulatory authorities agreed to postpone the interconnection of the Baltic-Finnish natural gas market, determining that interconnection could take place no earlier than October 2024.
The full translated Report will be accessible on the NERC website www.vert.lt and on the CEER website www.ceer.eu in September 2023.
Reports of previous years are presented here (in English).
