Ingrid Arus, Head of Electricity Markets Department, Elering

Ingrid Arus, Head of Electricity Markets Department, Elering


Please tell us about the Elering as
a company and its role in Estonia. Hello to everyone from my side.
My name is Ingrid Arus. I work here in Elering, Estonian
transmission system operator as Head of electricity
marketing department. Elering as a company
became independent from the biggest Estonian vertically
integrated energy company, Eesti Energia from 27 January 2010. We were a part of that company,
but we have been independent and unbundled from generation
and trading companies since 2010. We have only one
system operator in Estonia. What is our responsibility?
Security of supply in Estonia and to guarantee high quality
electricity for all consumers. We own our substation and
high voltage electricity lines and we own all
cross-border electricity lines. We have them between
Estonia and Russia, Estonia and Latvia
and between Estonia and Finland. We also have Estlink One.
We are not yet the owner, we will buy the submarine
cable in two months. We will do it together with Fingrid,
the Finnish system operator. What is the situation with power
generation capacity in Estonia? Is there an overcapacity
situation in a low market? Estonia is the only exporting
country in the Baltics, meaning our capacity is greater
than the consumption in Estonia. During previous years the peak
cloud was around 1600 MW, but our capacity here in Estonia
is approximately 2300 MW. Additionally, this capacity does
not include wind energy because we have security of supply
and cannot count on the wind. We never know if we will
have wind at a certain time. As for the overcapacity situation
— it depends on what it means. As a security supply,
we are responsible for it, we do not rely solely on consumption
and generation here in Estonia. We also take into account
cross-border capacities. As I previously mentioned,
we have a lot of them. When we have more capacity,
we export to neighbouring countries. It is an idea for a low market. During night-time and summer-
time the consumption is low, approximately 600 MW, but then we export to neighbouring
countries, sell it to them. From the technical point of view, we are not responsible for the
frequency in Estonia or the Baltics. Our synchronized area is controlled
by the Russian system operator. The level of service we get
from Russia is very high. We do not have a problem when
we have more capacity, generation. How is Estonia
linked to the Nord Pool? What does it mean
for the Estonian market, any positive effects, barriers? Nord Pool, as you all should know, is the most efficient electricity
trading platform in the world, not only in Europe. We have many power
exchanges in Europe, but Ipex and Nord Pool Spot
are good and are the big ones. It is important that they are big
— they operate in many countries. In Nordic countries, in the UK
and now also in the Baltics. We started with
North Pool Spot in 2010. It was about the price area,
because the capacity of Estlink gave us the opportunity for
power exchange in our location. Nord Pool Spot is not a traded
company or something like that. I would like to say that
they just have a formula on how to calculate the reference
price of different price areas. Estonia is one price area,
Latvia is another, Lithuania a third
and Nordic countries as well. We give all our locations available
capacity to Nord Pool Spot, meaning the price in Estonia
is influenced by other prices. The capacity is allocated
in an implicit way, meaning that the direction
of the capacity and energy is always from a low price
area to a high price area. This is very important when
talking about Nord Pool Spot. Nord Pool Spot platform
provides our traders, generators and consumers with the best, most
efficient way to buy or sell energy. For example, if a generator
does not sell energy in Estonia, they will just sell it
to the power exchange and it will maybe sold in Finland,
when the price is higher, or in Latvia or Lithuania. The Nord Pool Spot’s influence
is definitely positive. Please explain any possible power
market risks in the Baltic region. Could there be any similarities to
California’s 2001 power shortage? What was the reason for this
power shortage in California? It was the deficit
of generation capacity. As I previously said,
Estonia has a surplus area. Latvia and Lithuania have
quite a lot of generation capacity. But if we look at
the market perspective, they now have hydropower
during the summertime and the core
generation is not active. and there has been a big deficit in
Lithuania during previous years, even up to 70-80% of consumption. Like Estonia, Latvia and Lithuania
have a lot of cross-border capacity, that is to make up for this deficit. Estonia is in a
synchronized area with Latvia, Lithuania
and Russia and Belarus. That means that
five system operators agreed to guarantee a power
reserve for such situations. All countries have a
power reserve of 100 MW in case they need to be used
in emergency situations. Regarding our situation, we will have an additional 1000 MW
for Nordic countries from next year. So what happened in California
is not possible for our countries. Plus, our dispatch centres
have coordinated their work. So if needed, they have the
right to shut down consumers, but it has not happened in
Estonia in at least 10 years. So the case in California,
it cannot happen in the Baltics.

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