Baltic Focus — Weekly Energy Theme
Baltic electricity system: capacity, demand, and domestic generation
EU context.
The European Commission links high electricity prices and system inefficiencies to insufficient cross-border grid capacity. According to the Commission, improved coordination and grid development could reduce curtailment and system losses, with potential savings of up to €500bn by mid-century.
At the same time, policy debate increasingly focuses on cost allocation and system resilience, rather than market access alone.
Cross-border interconnections: physical capacity (MW)
• EstLink 1 (EE–FI): 350 MW
• EstLink 2 (EE–FI): 650 MW
Estonia–Finland total: 1,000 MW
• NordBalt (LT–SE): 700 MW
• LitPol Link (LT–PL): 500 MW
Total nominal cross-border capacity serving the Baltics: ~2.2 GW
This figure represents a technical ceiling, not guaranteed availability.
Actual usable capacity may be lower due to maintenance, outages, or system security constraints.
Electricity consumption: demand scale (2024, approx., TWh)
• Estonia: ~8–9 TWh
• Latvia: ~6.5–7.5 TWh
• Lithuania: ~11–12 TWh
Baltic total: ~26–28 TWh per year
With EU energy-efficiency standards broadly harmonised, these differences primarily reflect current demand scale and economic structure, not efficiency gaps.
Domestic generation and system support
Latvia — hydropower as a balancing asset
• Installed hydropower capacity: ~1,560 MW
(Pļaviņas ~900 MW, Rīga ~400 MW, Ķegums ~260 MW)
• Annual generation (2024, approx.): ~3.0–3.8 TWh
Hydropower covers ~45–55% of Latvia’s annual electricity consumption, but only ~11–14% of total Baltic demand.
System role:
Latvian hydropower is dispatched primarily for balancing, peak coverage, and frequency support. It does not operate as continuous baseload, and its annual output is constrained by hydrological conditions.
Electricity exports therefore reflect system needs and market conditions, rather than sustained energy surplus, and do not structurally lower domestic electricity costs.
Estonia — oil shale as controllable generation
• Installed oil-shale-based capacity (Narva complex): ~1,000–1,300 MW
• Annual electricity generation (2024, approx.): ~4–5 TWh
Despite declining utilisation due to cost and climate policy, oil shale remains a dispatchable domestic resource, available for system security and peak demand coverage. This reduces Estonia’s reliance on imports during stress periods.
Lithuania — deficit market and gateway
Lithuania concentrates the region’s external entry points:
• NordBalt connects the Baltics to the Nordic hydro-based system.
• LitPol Link provides the only physical land connection to continental Europe.
This role is driven by geography, not market choice.
At the same time, Lithuania is the largest electricity-deficit market in the Baltics, making these interconnections essential for covering domestic demand as well as for transit.
Gas — methodological note
Gas is excluded from the core electricity balance. As an imported fuel, it does not currently constitute a structural element of the Baltic power system.
Its impact would become material only if gas-fired capacity were deployed explicitly as domestic reserve or peaking generation (for example, through a dedicated reserve plant).
As of now, gas affects the electricity system marginally and indirectly, not as a core balancing asset.
Capacity vs demand: the structural constraint
The Baltic electricity system operates with:
• hundreds of megawatts of cross-border capacity, versus
• tens of terawatt-hours of annual demand.
This asymmetry highlights a key vulnerability:
a single major cable outage can remove a material share of import capacity, which cannot be rapidly replaced due to physical limits of remaining interconnections.
Image: photos/photo_137@28-12-2025_13-37-17.jpg