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Published: 10/23/2017. Updated:

NCC takes decision to improve liquidity in the wholesale electricity market in Lithuania


According to EU regulation 2016/1719 of September 26, 2016 establishing guidelines on forward capacity allocation, NCC performed analysis on electricity price risk hedging opportunities in Lithuanian bidding zone. After evaluation NCC states that Lithuanian bidding zone does not have specially for Lithuanian electricity market developed Nasdaq risk hedging financial product, however Lithuanian wholesale electricity market participants have possibility to use hedging products provided in Latvian bidding zone, as there is no significant difference between electricity prices in Lithuania and Latvia. NCC also states that Lithuanian bidding zone does not have sufficient risk management tools for cross-border risk hedging or they are not effective in comparison with Nordic countries.

After completion of analyses on May 12, 2017 NCC took a decision in order to promote effective wholesale electricity market operations and instructed Lithuanian electricity transmission system operator AB Litgrid within 6 months to ensure the opportunity for the electricity wholesale market participants to purchase long-term cross-border risk hedging products without issuing long-term transmission rights.

NCC informed Latvian, Swedish and Polish regulatory authorities with directly coordinated final decision on cross-border risk hedging products.