Lithuania is also preparing to open the electricity market to households / Article /

The electricity market in the European Union (EU) was opened up in 2007, first to large consumers, gradually to all others. Market opening means that electricity can be purchased from a freely chosen electricity trader. In Estonia, the electricity market was opened to households seven years ago, in Latvia five years ago, but Lithuania is going to do so in 2021.

If the wholesale electricity market in the Baltic States is similar, there are differences in retail both in terms of historical development and in terms of regulation and prices.

“The price structure of the Latvian market is that by consuming more kilowatt hours, the price decreases. In Lithuania, it is advantageous if you are a small and economically inactive consumer who consumes little. In Estonia, historical consumers have been actively encouraged to buy products linked to stock prices.

Consequently, the average statistical price is lower in Estonia, but in Latvia the prices are slightly higher than in the neighboring countries.

But it rather reflects the behavior of consumers – that they have been lazy by choosing the simplest, which is not the most cost-effective. In the long run, however, prices could level off and the market will become similar in both the corporate and household segments, “said Gunārs Valdmanis, Executive Director of the Association of Electricians and Energy Builders.

Latvenergo’s sales director Uldis Mucenieks said that the company has been operating throughout the Baltics for 10 years and sells electricity to 8,000 business customers in Lithuania. During the last six months, Latvenergo has also started selling electricity under the Elektrum brand to 2,000 Lithuanian households.

“Lithuania, including us, has four active players already working in the household market segment.

In Latvia, competition developed gradually, but in Lithuania there was activity from day one. From the consumer’s point of view, the Lithuanian market is similar to the Latvian market, only twice as large. If there are about 800,000 households in Latvia, then in Lithuania – one and a half million. By the end of the year, the approved regulated price in Lithuania is a bit lower, but the difference is not so big that we would not be able to attract new customers, “said a representative of Latvenergo.

Mucenieks said that the company in Lithuania will finish next year construction of a solar panel park.

“Lithuania has a regulation that allows households to buy part of the capacity in a solar park remotely.

In Latvia, the market model and regulation is not yet such as to allow households to use electricity remotely from other manufacturers’ solar panel parks. Therefore, Lithuania is like a test that will allow the development of some kind of energy communities in the future and will allow to diversify the purchase of electricity in the future. There are customers who actively monitor electricity prices by the hour and adjust their consumption accordingly. They most often choose a stock price product. On the other hand, there are customers who want a stable price and be sure that the monthly bills do not change significantly. They choose fixed prices, “said a Latvenergo representative.

The Executive Director of the Latvian Association of Electricians and Energy Builders assessed that electricity trading to neighboring countries promotes exports and also benefits consumers.

“It promotes competition, so companies cannot be complacent and companies have to look for new strategies and new solutions to reach customers and offer new products, such as a fixed price for a certain period of time or a price cap for a certain period. The activity of energy companies in the region is welcome. and innovations, and the geographical scope of these companies is not limited only to the Baltic States. In general, it is a great benefit for the whole region and market health, “Valdmanis said.

In the free market, any consumer, including households, can buy electricity at a fixed or variable price, depending on the price of electricity on the stock exchange.

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