The transmission system operator warns of the risk of electricity shortage in the coming years in the Baltic states, the capacities of base power plants available to cover and balance electricity demand are sharply decreasing. The lack of electricity supply and balancing capacity will become more pronounced after the planned disconnection of the Baltic electricity system from the Russian combined electricity system in 2025, according to the annual electricity system condition assessment report of the Latvian transmission system operator JSC “Augstsprieguma tīkls” (AST).

“The common trend in the Baltic electricity system is to replace the capacity of large, centralised, easily controlled thermal power plants with distributed, fluctuating and difficult to control generation. Especially after the planned disconnection from the Russian interconnected electricity system in 2025, the risk of balancing capacity shortages in the Baltics will increase if investments in strengthening reserve capacity are not made in time. Special attention should be paid to the transition period of a few years immediately after the disconnection of the Baltics from the BRELL electricity system and synchronisation with the European power system, when the new balancing reserve market and reserve availability will not be sufficiently developed,” says Varis Boks, Chairman of the Board of AST.

In recent years, the production capacity of conventional thermal power plants in the Baltics has been rapidly declining; one of the main reasons for which is the European Union's environmental policy and the prices of carbon dioxide emission permits. It is expected that this trend will also continue in the coming years. For example, Estonian oil shale power plants, which produced half of the electricity produced in the Baltics in recent years, produced half as much electricity last year as in 2018. As a result, the dependence of the Baltic’s electricity system on the import of electricity and balancing reserves is increasing. In general, a significant shortage of generating capacity is expected in the next decade in both Latvia and the Baltics: around 2,300 MW, or almost half of the generating capacities of large thermal power plants will be closed, and significant wind energy development is forecast throughout the whole Baltic region. According to the forecast for the development of existing electricity generations, after 2030 the Baltic states will not be able to ensure the safe operation of the electricity system.

With the switch to synchronous operation with the continental European power system, the Baltic transmission system operators will have to be able to provide load and frequency control both under normal conditions and in the event of an incident following an emergency disconnection of a large generator or interstate transmission line. Frequency regulation will create additional demand for special reserves and balancing products.

The creation of load and frequency regulation capacity in the power system will require capital investments in new equipment, ensuring the continuous availability of hitherto unused frequency regulation reserves in the region and developing the market for ancillary system services. As long as the market for frequency maintenance and renewal reserves is not developed in the Baltics and there is a significant risk that the availability of such reserves will be insufficient to ensure load and frequency regulation capacity without jeopardising the synchronisation project, AST has suggested to the Public Utilities Commission, as a transition solution, to permit AST to install energy storage batteries to guarantee the necessary reserves during the implementation of the synchronisation project.

The AST annual assessment report is an important document for the development of the Latvian electric power system, because it proposes and reviews multiple potential scenarios for the development of generating output, analysing power consumption and peak loads, covers the electric power balance for the 10-year period, and provides information about the capacity available to meet 24-hour demand in the nearest future.

The full text of the AST assessment report is available on the website of AST at https://www.ast.lv/en/content/tso-annual-statement.