Future of Lithuanian energy system: Electricity import or local generation?

• The long-term development of the Lithuanian energy sector was modelled.
• The power systems of Baltic/Nordic countries, Poland and Germany were analysed.
• Lithuanian power sector development will be influenced by the neighbouring markets.
• Low-cost import is economically attractive long-term option to supply electricity.
• Installed capacities have to be maintained to ensure the security of energy supply.

Lithuania's electricity import share compared to consumption is one of the highest among the European countries. The newly constructed inter-system power links connecting Lithuania to Swedish and Polish power systems will widen the low-cost electricity import possibilities. The electricity markets of the entire region (Baltic, Nordic, Poland and Germany) will make significant influence on the development of Lithuanian power sector through the electricity prices established in these markets. The long-term development options of the Lithuanian energy sector were analysed. The alternative of high imports is the most attractive longterm option to supply electricity looking from the economical point of view but creates security of electricity supply concerns. In this relation different measures to increase the country's electricity supply security and their costs to electricity consumers have been analysed through the special design of scenarios analysed. The alternative of “Installed capacities” is recommended which means that the requirement to maintain the necessary installed capacities in the country is set. Such scenario will allow Lithuania's energy consumers to benefit from the low electricity prices in the neighbouring markets and have possibility to generate power locally, in case the electricity import is not possible or too costly.