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Just before the start of the European Council, on 18-19 June, leaders from eight Baltic Sea member states signed the Baltic Energy Market Interconnection Plan (BEMIP). The action plan aims at improving market integration as a response to the area's energy isolation. It will improve energy connections with the rest of Europe for Lithuania, Latvia and Estonia. The European Commission expects the Swedish EU Presidency to give high priority to concrete follow-up on the plan.

The BEMIP action plan essentially covers three main areas. Firstly, an electricity market design, based on the Nordic electricity market model, will be laid out with a road map detailing practical steps to reach the new market model and remove existing barriers for a regional electricity market. It follows EU internal electricity market rules, notably specifying the removal of regulated tariffs, separation of transmission system operator (TSO) activities and roles, and removal of cross-border restrictions. Further elements include the establishment of market-based congestion management as well as common reserves and balancing power market, full opening of the retail market and the setting up of a common power exchange for physical trade in the Nordic and Baltic areas.

Electricity interconnections and generation forms the second element. Here, infrastructure projects will aim at integration of the Baltic Sea region electricity markets. The three sets of projects are those under the Nordic Master Plan linking Finland and Sweden (Fenno-Skan II), in Great Belt in Denmark, Sweden and Norway (Nea-Jarpstrommen), South Link in Sweden, as well as that linking Denmark and Norway (Skagerrak IV). A second set of projects links the Baltic area with Nordic countries and Poland, such as NordBalt (previously SwedLit) linking Sweden and Lithuania, Estlink linking Estonia and Finland and LitPol linking Poland and Lithuania. Finally, a third set of priority projects link Poland and Germany. This would also provide connection to wind generation from Germany.

A third element in the BEMIP is greater integration of the region into the wider EU's internal gas market and infrastructure. This would enhance security of supply with a diversification of routes and sources. Less developed than the other elements, it includes potential projects, such as new interconnections and implementation of reverse flow, facilities for liquefied natural gas (LNG) as well as developing gas storage.

In a note to Council delegations, the Commission stressed that electricity is the most important part of the BEMIP even if gas issues are addressed. The Commission also insisted on interconnections having no exemption from the rules on third-party access (under the gas and electricity directives) as well as a common position for electricity imports from non-EEA countries.

A Commission note is available at > Search = 251617

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Publication:Europe Energy
Date:Jun 24, 2009

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