Baltic Energy Market Interconnection Plan

Baltic Energy Market Interconnection Plan

The energy markets of Estonia, Latvia, and Lithuania lack adequate connections, both between themselves and to other parts of the EU. For instance, the only power links currently between the Baltic States and another EU country are the Estlink 1 and 2 connections between Estonia and Finland. This lack of integration drives up energy prices for consumers and lowers energy security in the region.

The Baltic Energy Market Interconnection Plan (BEMIP) aims to fix this by creating a fully functioning and integrated energy market in the region, supported by the necessary infrastructure.

BEMIP projects are part of the European Economic Recovery Plan (EERP) which means that they have been eligible for over half a billion euros in funding. Projects can further be funded through the European Regional Development Fund, the EU's Cohesion Fund, and, as projects of common interest, through the Connecting Europe Facility.

The BEMIP forms part of the overall 'EU Strategy for the Baltic Sea Region'.

Electricity market integration

Under the BEMIP, the Nordic electricity market model (NORDEL) will be extended to the three Baltic States. The aim is to remove barriers to competition in the countries and bring them into conformity with EU rules. Actions include:

  • removing cross-border restrictions to the trade of energy
  • reducing electricity congestion across borders and establishing common energy reserves
  • removing regulated energy tariffs
  • fully opening the retail market and establishing a common power exchange in the Nordic and Baltic areas.

Electricity interconnections and generation

To properly integrate the Baltic States into the EU's internal energy market, new electricity infrastructure projects are required in the Nordic countries, Poland, Germany, and the three Baltic states themselves. Under the BEMIP, these projects consist of three sets:

  • The Nordic Master Plan which covers those projects linking Nordic countries together such as the Fenno – Skan II connection linking Finland and Sweden, and the Great Belt project in Denmark.
  • Projects linking the Baltic area with the Nordic countries, as well as Poland. These include projects such as NordBalt linking Sweden and Lithuania, and LitPol linking Poland and Lithuania. They also include projects to strengthen the electricity grid between the three Baltic States themselves.
  • Interconnections between Poland and Germany to help deal with loop flows caused by increased wind generation in Northern Germany. Loop flows occur when the electricity produced in one country is diverted to a different part of its territory through a neighbouring country's' grid.

Gas internal market and infrastructure

BEMIP projects concerning gas include:

  • new interconnections such as the BalticConnector pipeline between Estonia and Finland
  • the implementation of reverse flows such as through the proposed Amber PolLit pipeline between Poland and Lithuania
  • LNG facilities in Estonia and Latvia
  • gas storage facilities in Latvia.
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