Systemic error: the Baltics will face rising electricity prices
After the Baltic states, in particular Latvia and Estonia, leave the BRELL energy system, which is united with Russia and Belarus, the Baltic states will face the risk of interruptions and rising electricity prices. This was stated to "Izvestia" by the Russian embassies in these countries. They plan to disconnect from the energy ring on February 8, and on the evening of the 9th they will join the European system ENTSO-E. And although officials assured citizens that their safety is not threatened, in Estonia, for example, they recommended people to stock up on food, water and medicines. The reasons and consequences of the Baltic states' disconnection from BRELL, as well as measures to ensure electricity supply to the Kaliningrad region are discussed in the Izvestia article.
The Baltic States are disconnecting from BRELL
The Baltic republics are increasing their energy dependence on the European Union. On February 8, Estonia, Latvia and Lithuania plan to synchronously disconnect from the BRELL energy ring, which includes Russia and Belarus. After that, they will work in an isolated mode for at least a day. In the evening of February 9, the Baltic system will connect to the European ENTSO-E via the Poland-Lithuania overhead line.
On the eve of withdrawal from BRELL, the politicians of Estonia, Latvia and Lithuania hastened to assure that they were ready for emergencies, emphasizing that nothing threatened the energy security of the countries' residents. Nevertheless, Estonian authorities recommended citizens to stock up on food, liters of water, medicines, alternative lamps and board games just in case.
- The atmosphere in society as a whole is alarming. People do not fully trust the calls of the government and Elering, the company responsible for the de-synchronization, to remain calm, as the authorities are prepared for any development and the connection to the European energy system should go unnoticed. People are preparing for possible power outages: they are buying diesel generators and foodstuffs," Lenar Salimullin, Russia's Charge d'Affaires in Tallinn, told Izvestia.
The total cost of preparing Estonia, Latvia, Lithuania and Poland for the planned synchronization of the Baltics with the European 50 Hz frequency band amounted to €1.6 billion, 75% of which was covered by EU funds. To what extent electricity prices in Estonia will increase as a result is an open question.
- The objective reason for the increase in bills is at least the fact that from February 8, the Baltic states will have to ensure the frequency (50 Hz) in the system on their own. Allocations for keeping power plants ready for standby start-up are estimated at €60 million annually," the diplomat said. - Elering has pledged to cover these costs until June 30 this year, but in the second half of the year they will inevitably place an additional burden on energy consumers. We can safely add to this the costs of the upcoming repair of the Estlink 2 power cable between Estonia and Finland, which failed on December 25, 2024. The regular news about the failure of the Avera power plant, which was commissioned in 2015, does not add to the optimism either.
It is noteworthy that even before the withdrawal from BRELL, electricity in Estonia was more expensive than in other countries of the region. Thus, in January, the average monthly price for this country on the Nord Pool exchange was 9.2 euro cents per kWh, an increase of 9.5% compared to a month earlier. At the same time, for neighboring Finland it did not exceed 5.3 euro cents per kWh.
Latvia can also expect an increase in prices due to possible power outages. In a number of cities of the republic it is planned to temporarily turn off traffic lights, residents are offered to de-energize "sensitive" electrical equipment and stock up on food and water for several days, the Russian embassy told Izvestia.
- And these are only possible technical difficulties so far. The next subject of concern is the new prices for electricity supply. There is more speculation of various kinds here so far. But everyone recognizes that they will rise. So the so-called energy independence may turn out to be an "expensive toy" for the population, especially for low-income groups," they emphasized.
The main question is how ready Latvia's energy system is for such a transition. Three synchronous compensators will maintain the frequency in it and provide generating reserves, but according to media reports, only one device will be working at the moment of disconnection from BRELL. The others are allegedly being commissioned later.
Synchronization of the Baltic states' networks with continental Europe will be carried out only through the LitPol link on the Lithuanian-Polish border. In case of its failure due to technical reasons, Latvia will have to ensure the stability of its energy system in "island" mode.
- Official statements about the reliability of the system are accompanied by various reservations about possible technical failures. We do not exclude that in this way the ground is being prepared for justification in case of emergency situations and force majeure in case of disconnection from BRELL, - noted the Russian Embassy in Latvia.
It was emphasized that Riga had and has all the possibilities to steadily receive electricity supplied through the Russian-Belarusian ring. Binding to this network is absolutely reliable from the technical point of view and competitive in terms of electricity cost for the population and business. However, the country's authorities made a different decision.
- Preparations for the disconnection cost Latvia almost half a billion euros, 70% of which were covered by EU funds. Now, on the eve of the mentioned event, there is uncertainty in Latvian society, many people express fears," the diplomatic mission says.
The disconnection from the BRELL power system is going to be turned into a solemn ceremony. The presidents of the three republics and Poland, the European Commissioner for Energy and the head of the European Commission will gather in Vilnius for this purpose.
Consequences of leaving the Russian system for the Baltic economies
During the Soviet years, a unified energy system of the country functioned; after the collapse of the USSR, some of its fragments were preserved. For example, the north-western part, which after 1991 was made up of Belarus, Russia, Estonia, Latvia and Lithuania (BRELL), continued to operate. In 2001, the five states concluded a formal agreement in which they agreed to exchange electricity and support each other in emergency situations.
In 2004, the three Baltic republics joined the European Union, but the BRELL system continued to operate. Russian electricity tariffs were lower than European ones, which benefited consumers in the Baltic states. In addition, the power grids and power plants in these countries were built during the Soviet era and were poorly connected to the EU infrastructure.
However, political considerations then took over: in 2017, Estonia, Latvia and Lithuania decided to disconnect from BRELL, and two years later they signed a roadmap for this process with the EC. The events in Ukraine and the start of construction of the Belarusian NPP pushed the Baltics to this decision. In the latter case, instead of cooperation, which would have brought cheap and guaranteed energy, the Baltic States were strongly against it.
After the start of the SWO, the work on synchronization of the Baltics with the European grid accelerated. The republics stopped importing Russian electricity, replacing it with supplies from Poland and Finland. But the Baltic states are increasingly facing accidents and breakdowns at energy facilities. In December 2024, the Estlink 2 cable was damaged, and on February 5, the Avera power plant in Estonia failed.
The Baltic countries' preparations for withdrawal from BRELL included the construction of the necessary infrastructure: LitPol Link from Lithuania to Poland and NordBalt to Sweden have been launched. Estonia has previously built Estlink power cables to Finland. Harmony Link is currently under construction, which will become another route for power transmission from Poland to the Baltics.
Autotransformer for expansion of the Lithuanian-Polish power supply system LitPol Link
Disconnection from BRELL reduces the room for maneuver for the Baltic countries, as they will no longer be able to restore imports from Russia in case of emergency, says Stanislav Mitrakhovich, an expert of the National Energy Security Fund and the Financial University under the Government of the Russian Federation.
In addition, residents of the Baltic States will face a new increase in electricity tariffs, as Lithuanian Energy Minister Zygimantas Vaichiunas admitted earlier. The funds will be used for modernization of electric power facilities - Estonian operator Elering alone plans to spend €700 million for synchronization with European power grids within the next five years. Against this background, the exchange price of electricity is growing: on February 7, the price reached almost €190 per MWh, although at the end of January it fluctuated around €90-110 per MWh.
Rising electricity prices may scare away businesses from the Baltics, which will find it more profitable to move production to other countries, primarily Scandinavia. And this is despite the fact that the cost of labor force is higher there, said Nikolai Mezhevich, president of the Association of Baltic Studies.
- At the same time, the discontent of entrepreneurs and ordinary citizens does not bother the governments of the Baltic states," he told Izvestia.
What will happen to the Kaliningrad region after the Baltic states disconnect from BRELL?
The withdrawal of Estonia, Latvia and Lithuania from BRELL means that the Kaliningrad region will be isolated from the unified system of Russia. However, measures to provide electricity to this region in stand-alone mode began to be worked out as early as 2013.
In 2017-2020, four new thermal power plants with a total capacity of almost 1 thousand MW were built and commissioned in the region: Pregolskaya (463 MW), Primorskaya (195 MW), Mayakovskaya and Talakhovskaya (160 MW). This brought the capacity of the region's power plants to 2 thousand MW. In 2019, a gas receiving terminal and a floating regasification unit Marshal Vasilevsky were commissioned in the Kaliningrad region. Since the same year, tests on the operation of the Kaliningrad region's power system in isolated mode have been successfully conducted several times without failures.
In late January, Russian presidential spokesman Dmitry Peskov said that Russia had taken all measures to ensure uninterrupted, reliable operation of the united energy system.
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