HomeMediaLatest NewsWhy Lithuania is in a hurry to get out of BRELL

Why Lithuania is in a hurry to get out of BRELL

10 August 2023

Kondratiev Sergey V. Principal Director on Economic Studies, Head of the Economic Department
Тема: Energy

Sergey Kondratiev gave a comment to Sputnik Litva about the Lithuania's planned exit from the BRELL energy ring.

Statements by the Lithuanian authorities about the soonest disconnection from the Russian power grid allow Vilnius to take a winning foreign policy position without really risking anything, according to Sergey Kondratiev, head of the Economic Department of the Russian Institute for Energy and Finance.

He noted that the assertiveness of the Lithuanians on this issue confuses even their closest allies. At the same time, Latvia and Estonia urge not to rush to an early exit from BRELL (unified energy system of Lithuania, Latvia, Estonia, Russia and Belarus) and adhere to the established deadlines.

The expert considers the disconnection of the Baltic states from BRELL and their connection to the European power grid to be a political, not an economic story.

"The fact that Lithuania is the locomotive of the process here is also an absolutely political story," he said.

At the same time, Kondratiev points out that Vilnius is much more dependent on electricity imports than its neighbors. Thus, the Lithuanian energy industry is extremely sensitive to the prices that have been established in the energy markets of Scandinavia and Eastern Europe.

In addition, Lithuania has fewer of its own local energy carriers and generating capacities than Latvia and Estonia, which can turn to hydropower and oil shale, respectively.

At the same time, the European Commission is the most interested in the Baltic states' withdrawal from BRELL, which is promoting its idea of creating a single European energy system and a common electricity market with uniform rules.

Kondratiev also noted that due to the implementation of the project, the Baltic States may face certain problems in the field of energy supply. Thus, energy bridges from Finland, Sweden and Poland may not be reliable enough, while disconnecting even one of these threads will lead to failures and price increases.

"Based on the costs of network construction, the Baltic countries may face an increase in electricity prices in the region of eight to ten percent over the next few years relative to the level that would be observed if ties with Russia and Belarus were maintained," he states.

At the same time, the expert calls on the Baltic states to maintain ties with Russia even after the official withdrawal from BRELL. So, in the Baltic States, DC inserts could be built for the possibility of overflows from Russia and Belarus.

In addition, the expert noted that the "mess started by the Baltic countries" carries risks for Russia itself, especially for the Kaliningrad region. According to him, the Russian exclave is able to provide its own energy existence with the help of already built power plants.

Kondratiev Sergey V. Principal Director on Economic Studies, Head of the Economic Department
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