VILNIUS - Lithuania has no commitments to buy electricity from Russia in 2010, Energy Minister Arvydas Sekmokas has said, despite a deal between an energy middleman and a Russian energy supplier saying that Lithuania must buy from them.
According to Sekmokas the country will buy the necessary amount of electricity in the market after the decommissioning of the Ignalina Nuclear Power Plant (INPP) at the end of 2009.
"We plan to start creating the electricity market as of the beginning of January next year. Around 35 percent of electricity will be sold and bought on the market, and 65 percent will be a compulsory purchase. Estonians and Finns will probably be prepared to supply electricity. If there is a need, we will be able to buy electricity from Russia as well, but everything will be done under market conditions," the minister told the daily Lietuvos Zinios.
Lithuania has no electricity links to western European grids. Following the shutdown of INPP, it will be forced to buy electricity from Russia.
The Lithuanian based company Energijos Realizacijos Centras (ERC) and Russia's energy company Inter Rao JES signed a long-term contract, which stipulated Lithuania would have to buy electricity from Russia and Belarus. The quota specified in the contract is set to exceed the amount of electricity produced in Lithuania after the INPP closure by three times for the next 20 years.
ERC, created in 2002, is a middleman in the transfer of energy between Lithuania and Russia.
Fifty-one percent of ERC shares are owned by Inter Rao JES, according to the Web site of its other shareholder Scaent Baltic.
Scaent Baltic is a subsidiary of Scaent Group, whose owners are unknown. The online "Investors" section was inaccessible because it is password protected.
According to BusinessWeek, Scaent Group operates as a subsidiary of the Ukrainian Unitrade Group.
ERC was created after the country's Law on Energy had entered into force, "initiating the liberalization of the electricity market and legalization of independent suppliers and other entities of an open energy market," the company's Web site said.
On the board of directors of Scaent Group is famous Lithuanian businessman Jonas Garbaravicius, who was "instrumental in the restructuring and liberalization process of Lithuanian electrical energy market and the de-merger of JSC Lietuvos Energija into separate transmission, distribution and generation companies," according to the Scaent Group Web site.
Sekmokas said it would be up to ERC to distribute the electricity the company undertook the contractual obligation to buy.
"If they put it on shelves, I will not be able to object to that. If they find another way of using it, it will be their business. The ERC will also be able to offer electricity at lower prices. Yet, Lithuania has not undertaken any obligations to buy electricity from Russia," Sekmokas said.
He noted the major part of the compulsory purchase would include the Elektrenai power station, with another part from renewable energy resources. The third part would be cogeneration.
As reported, at the beginning of April, the Energy Ministry announced Lithuania intended to buy up to 50 percent of electricity on the market.
The ministry formed a working group to create a model of the electricity markets in Lithuania and all three Baltic States. The joint Baltic energy market is expected to be formed by 2013.
INPP is due to be shut down at the end of this year in accordance with the country's EU accession treaty.
Scaent Baltic was unavailable for comment at the time The Baltic Times went to print.
