Public consultation on NJL tariff (from November 6th till November 20th)
National Commission for Energy
Control and Prices of the Republic of Lithuania (hereinafter – the NCC)
launches public consultation on the setting of price of
the service of access to interconnection lines (for
electricity export to the third countries (i.e. non–EU and non–EEA countries)).
The main purpose of this price of the service
of access to interconnection lines (hereinafter - NJL tariff) is to
cover cross-border transmission costs, which are not covered through the Inter-Transmission System Operator
Compensation Mechanism (hereinafter – ITC mechanism). According to the methodology (attached in
Appendix 1), NJL
tariff for years
2016 and 2017 will be calculated according to the formula provided below:
Later NJL tariff in t year will be calculated taking into account historical t-2 year data of cross-border transmission costs, attributable to NJL and amount of electricity exported to the third countries.
The legal background of the NJL tariff
is set in accordance with Law on Electricity of Republic of Lithuania
Article 67 paragraph 10 and thereof taking into account the letter of
Ministry of Energy of the Republic of Lithuania submitted in 18th of May, 2015, which sets out the practical reasons for the necessity of NJL tariff.
The reasons are the following: (i) incurred costs of usage of
interconnection services are not covered by the ITC mechanism, (ii)
therefore such costs are assessed in transmission tariff, i.e. covered
by electricity consumers of Lithuania, (iii) new interconnections
NordBalt and LitPol Link since year 2016 will lead to more costs not
covered by ITC mechanism and, therefore, (iv) to new export
opportunities to the third countries.
During the meetings of Committees of Senior Officials of Baltic Council of Ministers held on 27th of February and 27th of March, 2015 Lithuania presented its willingness to introduce NJL tariff from 1st of January, 2016 using entry/exit fee model.
NCC held public consultation with Lithuanian market participants on the draft of methodology of NJL tariff
from September 8, 2015 to September 17, 2015 and afterwards on October
8, 2015 asked for opinion of Latvian and Estonian market participants as
well as regulators.
The final version of the methodology of NJL tariff was adopted on October 29, 2015 (Methodology in Lithuanian is publicly available here; English translation you might find here.
During the discussions on NJL tariff in the 20th
Baltic Electricity Market Forum working group meeting on November 2,
2015 a proposal to ask for opinion of not only Baltic countries energy
regulators and market participants, but also Finland, Sweden, Denmark
and Norway energy regulators and market participants was expressed due
to common participation in Nord Pool Spot AS power exchange.
Preliminary calculation of 2016 NJL tariff has been performed by NCC and the preliminary results showed that the NJL tariff would be equal to 5,45 EUR/MWh. Initial calculation data is presented here. In order to make final calculations of the NJL tariff, NCC asked additional information from Lithuanian transmission system operator (hereinafter – TSO) LITGRID AB.
Also Lithuanian TSO LITGRID AB on October 29, 2015 informed NCC about performed simulation of influence of NJL tariff for Baltic states in 2016 with Balmorel market modeling tool, commonly used by Baltic TSOs, according to these assumptions:
• new interconnections NordBalt and LitPol Link are functioning;
• conservative growth scenario was used (generation and consumption are without major changes);
• assessment of electricity market development included not only Baltic states, but also Scandinavian countries and Poland;
• electricity trade with Russia and Belorussia was evaluated using statistical 2014 data of Russian electricity market prices;
• indicative price of NJL tariff equal to 6 EUR/MWh was used;
• two scenarios of social-economical welfare analysis was used: when NJL tariff is not set and when NJL volume is zero.
According to the results of this simulation:
• electricity market price because of NJL tariff decreases by 0,4 EUR/MWh in Lithuania and Latvia, and by 0,1 EUR/MWh in Estonia;
• setting of NJL tariff could reduce export to the third countries from 235 GWh to 0 GWh;
• benefit of NJL tariff for the Baltic states could be 8.6 million EUR.
Considering the importance of NJL tariff
and taking into account that Latvian and Estonian market participants
as well as regulators were asked to express their opinion on NJL tariff already on 8th of October, 2015, also the topic on NJL tariff was presented in 20th
Baltic Electricity Market Forum, in accordance with Directive
2009/72/EC of the European Parliament and of the Council of 13 July 2009
concerning common rules for the internal market in electricity and
repealing Directive 2003/54/EC Article 38, the NCC kindly asks to
provide an opinion about the NJL tariff by
November 20, 2015, to the email address email@example.com.
The NJL tariff
for year 2016 will be calculated by NCC after receiving and considering
the opinions of market participants in the end of November, 2015 –
beginning of December, 2015.