The Reform of Electricity Companies in Lithuania

Abstract

The object of the article is the reorganization and restructuring of Lithuanian electricity monopolies. The authors aimed to analyze whether the restructuring and changes in ownership of energy monopolies in Lithuania contributed to the creation of competitive electricity market The analysis was not restricted to the procedures of companies' reorganization, it integrated the national energy strategy, legal regulation of electricity sector, actual changes in the ownership of Lithuanian energy companies and subsequent decisions of the courts. This article is the first attempt to systematically analyze the history of the reorganization of Lithuanian electricity companies. The reform of electricity monopolies in Lithuania could be categorized from different perspectives, but there are commonly discussed issues, characterized as: (i) corporatization; (ii) legal separation of heat sector activities from electricity sector activities; and (iii) unbundling of electricity activities; (iv) privatization; (v) establishment of new companies for the implementation of the specific goals of electricity sector. Three main goals of Lithuanian electricity sector reform are identified: (i) the connection of Lithuania's high tension electricity networks with Poland and Sweden; (ii) integration into the electricity market of the Western Europe and the Nordic countries; (iii) construction of a new regional nuclear power plant. The legislative reform of energy sector can be divided into three stages: (i) the adoption of national legal norms after the declaration of independence; (ii) the harmonization of national law with the European Union legal acts and (iii) the creation of preconditions to construct a new nuclear power plant and to integrate Lithuanian electricity market into the Western European and Nordic countries electricity markets. The research showed that the restructuring and changes in ownership of energy companies still have not enhanced the competition in Lithuanian electricity market. Electricity policy goals - to ensure the strategic reliability of electricity supply and integrate Lithuania into the European Union market - have not been accomplished yet. The major supplier of electricity remains Russia and the electricity power system is still not connected to Western Europe and Nordic countries. However, the companies carrying out the interconnection projects, managing Electricity power exchange and coordinating the construction of a new nuclear power plant are established. These changes give rise to thinking, that Lithuania is on the way to liberalization of electricity market.

http://dx.doi.org/10.5755/j01.ee.22.4.713