HomeMediaLatest NewsThe Baltics are in an energy impasse: either electricity from Russia or a price shock

The Baltics are in an energy impasse: either electricity from Russia or a price shock

29 April 2022

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

Sergey Kondratiev, Deputy Head of the Economic Department of the Institute for Energy and Finance, commented to the Internet portal Baltnews on the possible options that will allow Lithuania, Latvia and Estonia to quickly and painlessly stop importing electricity from Russia.

At the moment, Lithuania, Latvia and Estonia do not have many options that will allow them to quickly and painlessly refuse to import electricity from Russia. Sergey Kondratiev noted that the Baltic countries were in a difficult situation:

"Traditionally, they have several opportunities to ensure a stable situation in the electricity market. The first is an increase in imports from Russia and Belarus. However, today political differences and ideology interfere with this. At the same time, prices on the wholesale market in the Russian Federation and Belarus are significantly lower than in Europe. Also, importers have the opportunity to buy Russian electricity at a discount."

Sergey Kondratiev recalled that Lithuania, Latvia and Estonia can increase imports from Scandinavian countries and Poland, but the problem here is prices. These states are also in the process of abandoning Russian energy resources, and not only from coal, but also reducing the supply of gas, as well as pellets, which are an important source of energy for them. The water content of the rivers remains not at the highest level, which affects the generation of electricity at hydroelectric power plants. All this makes electricity in Europe even more expensive.

“The third option is to generate energy at our own facilities. But mainly gas stations operate in the Baltic countries. In the face of the rejection of Russian “blue fuel”, we again return to the fact that the final price will be more expensive, because LNG, which is imported through the terminal to Klaipeda, costs much more than pipeline gas from Russia. If you start to produce electricity from it, it will come out "golden," Kondratiev noted.

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