baltic energy market interconnection plan (bemip)

Baltic Energy Market Interconnection Plan (BEMIP)

The three pillars of EU energy policy

Europe has agreed a forward-looking political agenda to achieve its core energy objectives of sustainability, competitiveness and security of supply.

Sust

aina

ble

Devel

opm

ent

Competitiveness

Security of supply

Increase security of supply

Connect renewables to the energy grid

Become a role model in decreasing climate

change impact

Create a well functioning and integrated internal market for energy

Energy efficiency

Diversification of sources and routes

Eliminate energy isolation

Strategic Energy Review

Target of “20-20-20 by 2020“:• Reduction in greenhouse gas emissions to 20%

below 1990 levels, 30% in the context of a global;

• agreement on climate; 20% contribution of renewables to final energy consumption;

• reduction in primary energy use to 20% below the baseline projection for 2020.

Towards single internal market

2nd Strategic Energy Review - Infrastructure priorities

Effective interconnection of the Baltic Sea region was identified as one of the six priority energy infrastructure projects in the Second Strategic Energy Review adopted by the Commission in November 2008.

BEMIP start up and goals

• The Baltic Energy Market Interconnection Plan was launched at the initiative of Commission President Barroso at the 2008 autumn European Council.

• The two main goals of the BEMIP initiative, within the context of the EU's 20/20/20 objectives are:– the full integration of the three Baltic States into the

European energy market, through – the strengthening of interconnections with their EU

neighboring countries.

Creation of the BEMIP (Action plan)• A High Level Group has been set up with the

participation of Denmark, Estonia, Finland, Germany, Latvia, Lithuania, Poland, Sweden and, as an observer Norway.

• The Group, chaired by the Commission, started to meet in November 2008. Three working groups deemed necessary for the development of the Plan on the following topics:– "Internal Market of electricity“– "Electricity Interconnections and power generation“– "Gas internal market and infrastructure"

The main conclusions of the BEMIP High Level Group final report

BEMIP (Action Plan) covers the following 3 areas:• Electricity market integration

– The Electricity market design - based on the Nordic electricity market model;– A specific "Roadmap" that describes practical steps on how to reach the new market model and aims at removing the barriers for

a regional electricity market in the Baltic States in conformity with the EU internal electricity market;

• Electricity interconnections and generation– The infrastructure projects allowing the integration of the Baltic Sea Region electricity markets are identified and have been

assessed. There are three sets of projects:• The Nordic Master Plan covers the projects between the Nordic countries such as Fenno - Skan II linking Finland and

Sweden, Great Belt in Denmark, Nea - Järpströmmen between Sweden and Norway, South Link in Sweden and Skagerrak IV between Denmark and Norway and others.

• Regarding the projects linking the Baltic area with the Nordic countries, as well as Poland, all identified interconnections – NordBalt or the previously called SwedLit linking Sweden to Lithuania, Estlink – 2 between Estonia and Finland and LitPol between Poland and Lithuania - are commercially viable. Strengthening the electricity grid between the three Baltic States belongs to this set of projects.

• The interconnections between Poland and Germany form the third set of projects. The main driver behind these – as opposed to market integration which is the case for the previous ones - is the loopflows caused by wind generation in the North. Initiatives launched by the European Coordinators Mr Adamowitsch with the so called 'heptalateral' Central Eastern Forum and Prof Mielczarski cover these projects.

• Gas internal market and infrastructure– For infrastructure, the main driver is enhancing security of supply by aiming at a higher level of diversification of routes and

sources. There is a good view on the potential projects that could satisfy this objective, which includes interconnections - new or implementation of reverse flow, LNG facilities as well as development of gas storages. It was agreed by the HLG to further develop the BEMIP gas sector aspects.

BEMIP (Action plan)

• Action plan delivered;• Joint declaration of the three

Baltic States' Prime Ministers signed in Vilnius on April 27, 2009 confirmed their political commitment to pursue real market opening and integration in electricity sector;

• Memorandum of Understanding on the Baltic Energy Market Interconnection Plan signed by 9 parties on June 17,2009.

Vision and Baltic Market design, 2015 Vision:

Creation of Pan-Baltic single harmonized electricity market integrated with Nordic market and further on also with Central and Eastern European markets. Baltic market integrated into Nordic market through Nord Pool and Baltic Nordic interconnections infrastructure during 2009-2015.

Future market design at the common Baltic electricity: Nord Pool Spot Baltic with three bidding areas Implicit auction between Baltic countries and towards Nordic Countries Transparency according to the ERGEG's North European Electricity Regional Initiative

Harmonized imbalance settlement and imbalance pricing Common reserves and balancing power market

Harmonized network tariffs for generators - structure and level Estonia, Latvia, Lithuania and Finland have a common position and trading principles towards non EEA third

countries

Baltic retail market Market place financial trade

Target: Baltic market design is consistent with the key elements of the Nordic market design

Roadmap towards an integrated power market (Step 1)

Final remarks

• Monitoring of the implementation of the BEMIP has been contributed to the Commission; first progress report will be presented to the High Level Group in December 2009.

Thank you for your attention!

baltic energy market interconnection plan (bemip)

Documents