Electricity market integration making progress in the Baltic Sea region

Eight EU governments in the Baltic Sea region signed a Memorandum of Understading in mid-June, concerning the energy connections and electricity market integration in the region. The objective is to improve the energy supply security in the Baltic Sea region and especially in the Baltic countries by creating an efficient integrated energy market supported by the necessary infrastructure.The electricity market in the Baltic countries will be developed on the basis of the Nordic model, and the goal is to integrate the market in stages to the Nordic electricity market. The plan contains measures such as abolishment of subsidised domestic market tariffs, removal of obstacles to cross-border electricity trade, and clarification of the role of transmission system operators. Moreover, transmission restrictions will be managed from a market basis, and a regulating power market and balance service covering the entire Baltic region will be created. The objective is to expand Nord Pool Spot’s Elspot and Elbas markets to cover the entire Baltic region in stages. The Estonian wholesale electricity market should open for competition and electricity exchange trade between Finland and Estonia should start as early as in the late winter of 2010. This would contribute to the construction of the Estlink 2 cable between Finland and Estonia in an expedited schedule.