Situation analysis in relation to district heating and CHP in the Baltic Sea Region: Estonia, Latvia, Lithuania, Poland, Russia, Kaliningrad

The situation analysis embraces chapters on: Estonia, Kaliningrad, Latvia, Lithuania, Poland and Russia, which experience varying degrees of difficulties with the transition to a market economy, and with integrating into the world market. In the following, the focus is on Lithuania, which has been visited during the project period. Lithuania has specific problems due to the existence of the Ignalina power plant, but has nevertheless characteristics, which apply to Estonia and Latvia as well. The problem with the quality of heat supply is rampant in all the countries, as is legal framework for the sector, except in Poland, which has generally attracted much attention from investors over the last ten years and has experienced a relatively sound political development in the energy sector. The main problem in all countries seem to relate to the policy development. The case of Lithuania confirms this. Following the observations on Lithuania, it is attempted to establish some points of concern, which are relevant to a greater or lesser extent in all countries, as well as some suggestions on how to move towards a solution of those problems. As mentioned Poland is generally in a better position, technically and politically than the three Baltic states, whereas Russia still needs to progress much on those issues. The general recommendations for initiatives in the Baltic countries in question are in brief: Establishing a clear view at governmental level of what the EU and liberalisation will bring, and what needs to be done additionally to secure main energy political objectives. Issues such as security of supply, environmental protection, low cost energy supplies and security of investments need to be thoroughly discussed at national level. It is important to understand that EU Directives provide a framework, not an answer to the future of the energy sector. Reinforcement of governmental bodies that deal with the practical problems of the energy sector. The main task of such bodies must be to secure the implementation of national energy policy, and of the acquis communautaire in the countries where this is relevant. Laying out the role gas, district heating and CHP respectively should be a main priority. Institute a continuous dialogue between key political and market actors, to optimise the relation between natural gas, district heating, and condensing power. Its aim should also be to institute measures that will boost investments. (EHS)