The challenges facing a functioning integrated Baltic and Nordic power market include supply adequacy and security of supply, competition and liquidity in the future Baltic markets and cross-border issues with 3rd countries. The Baltic network is highly integrated into the Russian system - which currently helps the Baltic states to maintain supply adequacy. It is however not consistent with the political decision the Baltic states have taken – to de-synchronise from the Russian network. The challenge of cross-border issues is particularly relevant due to the integration of the Baltic markets into the Russian electricity system on the one hand and the desire to integrate them into the Nord Pool market on the other hand.
At the same time the Baltic countries are going through an extensive restructuring of their energy industries. Market integration, renewable growth and nuclear investments underpin the foreseeable future for the Baltic power system.
Russia has been reforming its electricity supply sector for ten years and a fully liberalized electricity market was to be achieved by 2011.The main goals that should have been achieved is an investment friendly business environment, competition in electricity generation and a reduced role for the government in the electricity supply sector with prices expected to be driven by competition. So far this has only been achieved partially and the question is where Russia is going.
These issues were discussed at a joint seminar featuring two of Market Designs ongoing projects: "
Nordic-Baltic power market - challenges to integration" being carried out by Pöyry and "
Linking together electricity markets with different market designs - case study of the future use of Finnish-Russian interconnection" being carried out by Lappeenranta University of Technology.