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Litgrid CEO Daivis Virbickas: the next milestone - synchronisation
2016-04-26

Litgrid CEO Daivis Virbickas: the next milestone - synchronisation

NordBalt and LitPol Link – two strategic state projects that Litgrid implemented simultaneously – were undoubtedly the greatest challenges the company had ever met, although today it is clear that these interconnections were only preparation for even greater jobs, says Lithuanian electricity transmission system operator Litgrid CEO Daivis Virbickas. According to Mr Virbickas, the company has already focused its attention on another ambitious goal – synchronisation of the power system with the Continental European grid. On 27 April, Litgrid will present the key accomplishments of the past year as well as the work that is in store at its annual report event.
 
“2015 was one of the most ambitious years in Litgrid’s history: we completed the largest electricity sector projects since Lithuania’s independence was restored – the interconnections with Poland and Sweden, we learned how to manage them, while simultaneously reconstructing the existing electricity transmission network and ensuring reliable operation of the power system on a daily basis. And even during such a busy year, we achieved historic network reliability indicators while also reducing operating costs,” says Mr Virbickas.
 
Litgrid earned a net profit of EUR 3.8 million in 2015. It was decided at the ordinary general meeting of shareholders that the company will pay out 0.0091 dividends per share this year. These positive financial results were determined largely by the fact that costs were cut by nearly a quarter compared to last year, which allowed the company to finish the year profitably, despite the transmission tariff being reduced to critical levels.
 
In 2015, the largest part of Litgrid investments – 91 % - was allocated to implementation of the strategic NordBalt and LitPol Link projects. The European Union also contributed to investments in LitPol Link – EUR 27 million was allocated to the project last year from the Connecting Europe Facility (CEF).
 
Connecting the Lithuanian transmission system with Poland and Sweden was made possible by HVDC (high-voltage, direct current) technology, which was utilised for the first time in Lithuania. In order to operate this technology, a subsidiary company of Litgrid - Tinklo Priežiūros Centras - was founded two years ago. This company employs country’s top specialists in the field. These specialists began operating the interconnection together with contractors in late 2015, and then took over full responsibility once all of the links had been tested.
 
The power interconnection with Sweden and Poland turned Lithuania into a crossroads of electricity flow - of all the countries in the region, Lithuania became the best integrated with neighbouring markets. Previously, the Baltic transmission systems were not connected with Western Europe and were heavily dependent on electricity imports from third countries. However, there is still one step left until complete energy independence - synchronisation of the Baltic power systems with the Continental European grid. According to Mr Virbickas, the goal of synchronisation is precisely where the bulk of the company’s efforts are currently focused.
 
At present, the Baltic electricity transmission systems are operating within the IPS/UPS - a single synchronous zone with Russia and Belarus. Participants of a single synchronous zone are dependent on one other - the condition and operation of one country’s grid affects the grids of the other countries as well.
 
“Our goal is to move to a synchronous zone where there are clear rules and where all of the participants share the same rights and obligations. Since 2010, Litgrid specialists have been participating in working groups called together to draft ‘network codes’ - unified European grid management rules. Once the Baltic electricity systems begin to operate synchronously with the Continental European grid, they will be managed in accordance with these pan-European principles,” says Litgrid’s CEO.
 
Preparation work for synchronisation will start this year with internal network development and reconstruction projects. The Ignalina Nuclear Power Plant transformer substation that is being reconstructed had thus far been heavily integrated with the Belarusian energy system. Once the substation is renovated, it will be more clearly separated from the Belarussian network and will allow the Lithuanian power system to work more flexibly. In order to coherently prepare for transition from one synchronous zone to another, reinforcement of the Vilnius node - the part of the electricity transmission network around the capital - is also necessary. This will require the construction of three new power lines and reconstruction of two transformer substations.
In the coming years, reconstruction of the electricity transmission network will require more and more investment. Transmission lines, substations and other equipment are wearing out - more than half of it is over 35 years old. In 2015, 15 transformer substations were reconstructed, and systematic reconstruction is planned for this year as well.
 
According to Mr Virbickas, the company's specialists will also use the experience gained over the past two years in planning upcoming network reconstruction and development work.
 
“In recent years, we had a number of challenges to manage projects that were of exceptional complexity and responsibility. Having gained valuable lessons, we reviewed the company’s entire process of project management and found ways in each stage to raise the quality bar for ourselves as well as the contractors who work on the grid. We are constantly reminding everyone we work with that a high-voltage electricity transmission grid is a dangerous infrastructure with absolutely no place for compromises, neither in terms of quality nor in terms of safety,” says Litgrid’s CEO.
 
Litgrid is implementing improvements for project planning, technical and project expertise, and measures for maintenance assurance and occupational safety standards and control. In 2015, Litgrid updated the minimum qualification requirements for companies participating in public procurement; cost-benefit analysis criteria is also used in contract procurement. The goal of all of these improvements is to increase the quality of design and construction work and to ensure the safety of the people working on the grid. According to Daivis Virbickas, by raising the quality bar in the projects it is implementing, Litgrid, together with its contractors, hopes to contribute to the overall improvement of the energy construction sector.
 
Between the technological and project management challenges in 2015, Litgrid kept in close contact with communities and students, undertook educational and social responsibility projects, and shared its experience at international conferences. Over the course of the year, Litgrid welcomed 25 tour groups and introduced them to the country’s power system. Company specialists also worked with the Lithuanian Ornithological Society to protect birds flying through power lines. Over the year, approximately 6,000 special markers were installed on power lines to make it easier for birds to see the wires from afar and avoid collision. Litgrid’s community efforts gained recognition in the form of awards as well - last year the company won the Responsible Business competition, and was also named the most community-oriented business in the National Responsible Business Awards.
 
Lithuania: the Region’s Centre for Energy Competence – Litgrid’s annual report to shareholders and the public – will take place on the 27th of April from 10 am to 1 pm at the Museum of Applied Arts and Design (Arsenalo St. 3a, Vilnius).
 
 
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