In the Second Quarter the Shortage of Electricity in the Baltic Region was 39% Bigger Than it was a Year Previously

Electricity consumption in Estonia in the second quarter of 2011 was similar to the level of a year previously, having risen by only 1%. Electricity generation increased in Estonia by 4% while that in neighbouring electricity systems fell.

Production of electricity in Estonia in the second quarter totalled 2521 GWh, while consumption was 1739 GWh.
The slight rise in domestic production in the second quarter of the year came from a rise of 6% in generation from non-renewable sources. The share of electricity generated from renewable sources fell from 12.3% to 10.3%, which was a consequence of somewhat warmer weather and the replacement of biomass with peat, which lowered the level of production from renewable sources in CHP plants.

Although electricity production in Latvia was higher than consumption until May of this year, and June was the first month with a negative balance, production in Latvia in the quarter was still down 5% on a year earlier. Electricity consumption in Latvia was 2% lower that in the second quarter of 2010.

Electricity production in Lithuania has declined steadily since the beginning of 2010, following the closure of the Ignalina nuclear power plant. In the second quarter of this year Lithuania had a shortfall of 1744 GWh, which was 12% larger than in the previous year. Lithuania imported 72% of the electricity it needed to cover consumption in the second quarter. The fall in electricity production in Lithuania has worsened the negative balance of the whole Baltic region, which was 39% larger than a year ago at -661 GWh. Electricity consumption in Lithuania was 2% higher than a year ago.

Chair of the Elering management board Taavi Veskimägi said that the growth in the shortfall of electricity production compared to consumption from 8.4% to 11.9% in the Baltic states shows that electricity trading with third countries has an ever more important influence on the electricity market and prices. The growing shortfall doesn’t show a lack of generation capacity in the Baltic states, but rather that this capacity is not being fully exploited because it is more profitable to buy cheap Russian electricity.

“Our southern neighbours seem to have accepted electricity from third countries playing a major role in their electricity supply and do not wish to stop the unfair competition caused on the local market by electricity from outside the European Union. This is a problem for long-term security of supply because the presence of electricity from third countries could lead to a situation where nobody is prepared to invest in electricity production in the Baltic region without subsidies, and the consequence for society is clear: we can certainly consume cheap Russian electricity today, but we will need to pay subsidies to investors to support the development of electricity supplies in the future,” he explained.

Exports of electricity from electricity trading were 16% more than a year earlier and the largest share of the exports, 47%, went to Finland. Lithuania took 30% of electricity exports and Latvia 23%. Electricity was imported mostly from Latvia, which supplied 76% of total imports, while Lithuania supplied 22% and Finland 2%.

Complete summary is available here (only in Estonian).