It is the goal of the Baltic States to disconnect from the grid controlled by Russia in order to ensure energy independence from Russia, increase power supply security and fully integrate into the energy infrastructure of continental Europe. It is an investment in strengthening Latvia's security and resilience in conditions of geopolitical uncertainty.
Russia's control in the Baltic States manifests itself in that the grid frequency for the Baltic States is controlled by Russia, which has shown itself to be an unstable partner. For this very reason, to eliminate risks and end dependency on Russia, the decision was made back in 2007 to commence disconnection from the BRELL transmission system.
Additional benefits from integration with Europe:
- Synchronisation will increase the Baltic States' ability to continuously manage their electricity system, ensure a balance between production and consumption, manage the necessary security reserves, as well as regulate electricity flows and frequency, without involving countries outside the European Union.
- Synchronisation will promote renewable energy development in the Baltic States and Poland, because newly installed power lines, substations and synchronous condensers will increase the ability of transmission grids to support a bigger proportion of renewable energy sources within overall electricity generation.
Baltic integration into Europe's energy system has two phases:
- The first phase or Baltic integration into the common European electricity market has been completed with Latvia's gradual joining of the Nord Pool exchange from 2007 to 2015.
- Synchronisation of the Baltic energy system with continental Europe.
According to the statement from the Baltic States' system operators, the BRELL agreement regarding the functioning of the Baltic energy system within the Russian-controlled IPS/UPS grid will be rendered invalid on 7 February 2025. On 8 February 2025, Baltic operators will disconnect the energy system of Estonia, Latvia and Lithuania from the IPS/UPS grid and perform an isolated operational test of the Baltic energy system. After the completion of the test, on 9 February 2025 the Baltic States' energy system will synchronously connect to continental Europe's energy system.
Baltic transmission system operators perform continuous supervision of the energy system. If necessary, the Baltic States' energy system is also ready to perform emergency synchronisation with Europe's energy system.
Historically, the Baltic States have operated synchronously with the electricity systems of Russia and Belarus within the BRELL transmission system*. In 2025, disconnecting from BRELL and commencing synchronous operations with Europe will end the operational dependency of the Baltic States' energy system on Russia's energy system including frequency control, balancing, provision of emergency reserves, electricity transit provisioning and energy system management processes. Joining Europe's energy system will enable the energy system of Latvia and the Baltics to operate independently.
Back in 2007, a political decision was made to commence disconnection from the BRELL transmission system, when the prime ministers of the Baltic States jointly announced the idea of researching such a possibility.
*In 1939, the 88kV power line "Ķegums-Rīga" was activated and the first 80/20kV substation "Jāņciems" entered service. The subsequent development of the energy system took place during the Soviet era and historically Latvia's electricity transmission system has been built to operate within Russia's combined energy system or the so-called BRELL (Belarus, Russia, Estonia, Latvia, and Lithuania) transmission system.
In 2025, the Baltic States will disconnect all power transmissions lines to Russia and Belarus and connect to the Central European network with an interconnection through Lithuania and Poland. Accordingly, the Baltic energy system will be integrated into Europe's energy system and the common European electricity market, increasing the energy independence and energy supply security of the Baltic States.
As a result of the combined efforts and close cooperation between operators in the Baltics, Poland and continental Europe, the synchronisation project is in its concluding phase. By the time of the accelerated synchronisation, most of the projects necessary for synchronisation in the Baltic energy system, which are necessary to ensure the reliable operation of the system, will have been implemented. Thereafter, in conformity with the initial synchronisation plan, the remaining projects will be implemented in sequence by the end of 2025.
Baltic transmission system operators perform continuous supervision of the energy system. If necessary, the Baltic States' energy system is also ready to perform emergency synchronisation with Europe's energy system.
As a result of synchronisation, the energy security of Latvia and the Baltic States will increase, because our electricity supply will no longer be connected in any way to the electricity supply systems of Russia and Belarus. Baltic transmission system operators have joined forces to make significant investments in transmission systems to strengthen electricity supply security to the maximum possible extent. Interconnections and the countries' inland lines have been built and renewed, and synchronous condensers and batteries are being installed to ensure the stability of the grid and continuous service.
At the same time, it is not possible to completely rule out power disruptions. These are possible both during the planned synchronisation as well as in any other circumstances. These can be caused by external factors such as storms and technological faults in the transmission systems of Latvia or its neighbouring countries. However, the possibility of electricity supply disruptions due to synchronisation is not much higher than on a daily basis, for instance, due to damage caused by a storm. Short power outages are a common occurrence in many places in Europe.
AST personnel are always at the ready to rectify any potential power cuts as quickly as possible.
Investments in Latvia have reached EUR 483 million in line reconstruction, new facilities and IT system. Most of these investments are covered by European Union (EU) co-financing (over EUR 300 million) or congestion management revenue.
Synchronisation in itself will have little to no effect on electricity prices, because the main factors affecting prices in the Baltic States are local production, fuel prices, weather conditions and the availability of network infrastructure. These factors remain unchanged throughout the year.
It should be stressed that the Baltic electricity market has adapted and can fully subsist with importing electricity from Russia. Since Russia's invasion of Ukraine, Latvia has fully suspended the import and export of electricity from Russia and Belarus, and synchronisation with continental Europe is the final step to achieving the country's independence in the realm of electricity supply.
Likewise, according to calculations performed in the Baltic States, the synchronisation project will not have a significant effect on overall electricity charges. It should be emphasised that in order to ensure the stable operation of the Baltic electricity system, balancing reserves are crucial. It is forecast that just like in Estonia and Lithuania, the ultimate impact on electricity bills in Latvia of the cost of the balancing reserves required by the Baltic States for the stable operation of the energy system will be less than 5%.
In order to reduce the impact of synchronisation costs on electricity users, overall a great deal of work has been invested by the operators of all three Baltic States, including securing more than EUR 300 million in EU co-financing to reinforce Latvia's power grids infrastructure, and for the purchase of synchronisation equipment and battery systems that store electricity.
The synchronisation project will not affect electricity tariffs in 2025, because the total costs of AS Augstsprieguma tīkls during the adjustment period until 2025 are already incorporated within the tariff and the Public Utilities Commission (PUC) approved them on 22 May 2023. Infrastructure projects already implemented are included in the tariff calculation currently in force.
Overall, in regard to the next tariff adjustment period from 2026, factors affecting tariffs are as follows: synchronisation investment projects (capital expenditures), operating costs (increased losses, balancing and inertia equipment maintenance), operating costs and one-time costs connected with the isolated operational test.
For the implementation of infrastructure projects, AST has succeeded in securing EU co-financing of over EUR 300 million, as well as allocating accrued overload charge revenues to reduce the impact on the tariff. It is estimated that the overall impact of synchronisation costs on the overall system service tariff period from 2026 will be as little as 2%.