July 8, 2020 / 2:50 PM / a month ago

Baltic states consider taxing power from Russia and Belarus

TALLINN/RIGA/VILNIUS, July 8 (Reuters) - Lithuania, Latvia and Estonia are considering slapping a fee on power imports from Russia and Belarus, officials said, as they move towards a full decoupling from the countries’ Soviet-era common power system by 2025.

The fee, modelled on Finland-Russia trade, is expected to be part of new rules the Baltic States use to trade with their neighbours following the launch of Belarus’ Astravets nuclear power plant early next year.

Lithuania insisted their previous agreement be scrapped once Astravets, which is located 50 km from Vilnius and which it says is a threat to its safety and national security, comes online.

The fee for using transmission infrastructure could be as much as 8 euros per MWh, Taavi Veskimagi, chief executive of Estonia’s power grid operator Elering, told Reuters.

“It is necessary to have a (trade) solution (before the plant launches), so that there are no disruptions in the trade,” Gatis Junghans, board member at Latvian transmission system operator Augstspriegumu Tikls (AST) said.

Russia and Belarus produced about 20% of power consumed in the Baltic States in 2017-2019, said AST. Belarus denies any safety problems at Astravets.

Talks between the three countries on the future of their common power system have reached a stalemate over Vilnius’ refusal to accept electricity imports from the plant, officials from the three told Reuters.

If this persists, Latvia and Estonia could continue the trade on their own, setting the transmission fee for imports from Belarus and Russia, officials said, while Lithuania would levy the fee on power from Russia’s Kaliningrad enclave

“The anxiety that the three countries will no longer have a common methodology for trading is increasing day by day,” Timo Tatar, Estonia’s Deputy Secretary General for Energy, told Reuters.

Lithuania’s government last month did not ratify an agreement on rules which would have cut import capacity from Russia and Belarus by about 40% and curbed the resale of Belarusian power in Lithuania.

Its President Gitanas Nauseda also refused to attend a planned meeting with his Estonian and Latvian counterparts on June 25, citing inability to agree on power trade.

However, Lithuania’s minister of energy Zygimantas Vaiciunas said agreeing a three-way deal was for the moment more likely than a deal between Estonia and Latvia without Lithuania.

Other officials are less optimistic. “This the worst time to make our disagreements public. We have just submitted a joint investment request for the decoupling project,” said Tatar.

Electricity in the three markets is traded on the Nordic Nord Pool power exchange. (Reporting By Tarmo Virki in Tallinn, Gederts Gelzis in Riga and Andrius Sytas in Vilnius; Writing by Andrius Sytas; Editing by Jan Harvey)

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