Positive impact of twinning between TSOs
After five years of cooperation with Energinet.dk, the Lithuanian transmission system operator Lietuvos Energija is now a fully capable TSO.

The twinning project with the Lithuanian Transmission System Operator (TSO) led by Elkraft System (now merged into Energinet.dk) has now formally ended after five years of cooperation. The conclusion from the project is that Lietuvos Energija is a fully capable TSO, and that it can be a valuable partner for the Distribution System Operators, market players, authorities and other TSOs in the region. A final seminar was held in Vilnius on 8 September 2005, and the impact of the project was evaluated as “useful, remarkable and beneficial”.

Final seminar
The dissemination seminar crowned five years of cooperation – two twinning projects interconnected by a bridging project - financed by the EU and the Danish Ministry of Foreign Affairs. In the last two years of twinning, the Finnish TSO, Fingrid, took part in the cooperation with Lietuvos Energija and Energinet.dk.

As a result of the first twinning project from 2000 to 2002, Lietuvos Energija unbundled its organisation and went from a vertically integrated energy company to a TSO in accordance with the EU electricity market directive. In the second twinning project from 2003 to 2005, Lietuvos Energija was strengthened in its functions as a TSO and Market Operator in order to be fully ready to meet EU legal requirements from day one of membership.

Now a fully competent TSO
The twinning contributed to this development. The main conclusion from the cooperation is that Lietuvos Energija is now a fully competent TSO with potential for becoming the centre of dialogue in the electricity sector. The second twinning project actively supported Lietuvos Energija towards this end by participating in meetings with sector organisations on the market setup. The twinning project and Lietuvos Energija also participated in preparing the draft secondary legislation which implements the new energy law provisions related to the new EU electricity directive. This was a novelty in the law-making process in Lithuania but proved to be beneficial to all parties involved.

Unique way of working
Twinning is a unique way of working. Twinning is not one-way assistance from an EU member state to a candidate country but rather a joint project covering a process in which each partner takes on responsibilities – the candidate country commits itself to undertaking and funding reforms, and the member state commits itself to following the process during the whole project period.

A fully fledged partnership
During the five years of cooperation, the internal development of Lietuvos Energija’s organisation was remarkable - from the first twinning project, when the twinning concept was still difficult to grasp, to a fully fledged partnership between Lietuvos Energija, Fingrid and Energinet.dk with roundtable meetings where a range of human resource initiatives were discussed in addition to the development of the EU compliance programme and crisis communication and management. The project concludes that Lietuvos Energija implemented its internal development far more rapidly than West European companies did in the nineties.

For the Danish side this was an inspiring way of working. It was a challenge to our usual way of thinking when we presented the way things are done in Denmark within the sector. This was emphasised by the consortium model chosen for the second twinning project, in which Fingrid participated. Every time an issue in relation to EU legislation was on the table, two solutions could be presented, leaving Lietuvos Energija with an option of choosing the best elements of the two.

With around 50 short-term experts from Fingrid and Energinet.dk and around 40 participating experts from Lietuvos Energija, the impact of the project on all three organisations was considerable.

An advantage to Energinet.dk
For Energinet.dk the cooperation in the twinning project was an advantage in several ways. The project gave insight into new developments in both the Baltic area and Finland. In the Baltics many of the challenges inherent in the new electricity market system are strongly felt - especially the issue of security of supply in a liberalised market.

Making the right framework
A parallel study to the twinning project dealing with the consequences of a common Baltic electricity market showed that by the time customers gain free choice of supplier, the power balance will be strained as a result of the decommissioning of Ignalina Nuclear Power Plant. At the same time, prices are likely to go up, and large investments in production capacity will be required. The recommendation from the study and the twinning project is that the TSO has a central role to play in making the framework right for investors. The twinning project contributed to forming a good basis for Lietuvos Energija to participate actively in this process nationally, in the Baltics and in the EU.

Read the final report (pdf).