News & events

2015-04-28

Litgrid seeks partial European Union funding for electricity interconnection with Poland

Lithuanian electricity transmission system operator Litgrid submitted an application to the Connecting Europe Facility (CEF) programme for partial funding of electricity interconnection with Poland LitPol Link.
 
CEF funds energy, telecommunications and transport infrastructure projects of common European Union (EU) interest. In 2014, following CEF regulation, the project developer Litgrid addressed the countries benefitting from LitPol Link (Sweden, Norway and Germany) as well as the Agency for Cooperation of Energy Regulators (ACER) regarding the partial funding of the project.
 
ACER performed an independent cost-benefit analysis, where system reliability factor was monetized for the first time. The evaluation revealed that Lithuania’s benefits from LitPol Link project excess costs incurred. Assessing the possible impact of these investments on the electricity transmission rate in the next 25 years, ACER calculated that without EU funding, this impact might range from 18 % to 38 % as compared with 2015.
 
“A project as LitPol Link is a huge investment for any operator. The successful progress of the project is ensured by Litgrid owned and borrowed funds. At the same time we strive to decrease impact on the electricity transmission rate with this vast investment. We applied for partial project funding from CEF in order to mitigate possible LitPol Link project cost impact on transmission rates,”- says Rimantas Busila, Member of the Board and Director of Finance department at Litgrid.
 
The preliminary value of the Lithuania-Poland interconnection LitPol Link is put at EUR 370 million. The costs are shared by the two countries. Lithuania‘s share of costs include investments in overhead electricity transmission line from Alytus to the border of Poland and the direct current back-to-back converter in Alytus.
 
The LitPol Link will connect Lithuanian and Polish electricity transmission infrastructures for the first time. The project is a part of Baltic Energy Market Interconnection Plan (BEMIP) aimed at connecting the energy systems of the Baltic Sea region countries and eliminating energy islands in the European Union by 2015.
 
More information on ACER decision can be found on agency's website at: http://www.acer.europa.eu/Official_documents/Acts_of_the_Agency/Pages/Individual-decision.aspx
 
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