OREANDA-NEWS. August 17, 2010. The Management Board of Visagino Atomine Elektrine UAB (VAE) has approved the main guidelines for reorganization of the electricity sector in the short-term future, defining the establishment of four functional blocks. The Reorganization is performed in order to ensure that the model of the Lithuanian energy sector activity complies with the National energy strategy, requirements of the Third Energy Package of the EU, aimed at liberalization of electricity and gas markets and creates conditions for integration of the Lithuanian electric energy system into the European Union market and ensures financing of the commenced strategic energy projects.

Today resolutions of the Management Board were approved at the extraordinary general shareholders meeting of VAE, fully controlled by the state.

“A structure for the implementation of the sector‘s reorganization has been created in the Lithuanian electricity sector. In the pursuit of the reorganization, important system changes have been carried out – the formation of block of electricity generation companies has been finished, transmission grid has been separated, distribution networks are being merged. Also, maintenance companies will be established, the Technologies and Innovation Center has already been established. It can be considered that the process of the reorganization has reached technically the most complicated and most important phase, therefore the transparency of further processes is very important to both – the participants of the reorganization and the society“, - noted Arvydas Darulis, Chairman of the Management Board of VAE, Vice-minister of Energy. 

The formation of the transmission block, which will consist of transmission system infrastructure and system operator LITGRID AB, is aimed to separate and purify its activity, to comply with requirements of the Third Energy Package of the EU, to form a strong company, capable of interconnecting the Lithuanian electricity grid with ENTSO-E / ECN (European Network of Transmission System Operators/European Continental Network) grid, beginning with the links to Poland and Sweden, to implement measures, meant to facilitate the liberalization of the electricity market, to transfer auxiliary functions to maintenance companies.

The formation of the generation block, the basis of which will consist of Lietuvos Energija AB and generation capacities, concentrated in this company, is aimed to purify and concentrate the activity of generation, to reorganize and centralize generation capacities, necessary to ensure the energy independence of Lithuania, to transfer auxiliary functions to maintenance companies.

The formation of the distribution block, which will consist of the merged distribution network companies, is aimed to establish a customer-oriented and effectively functioning company, to obtain all possible benefits while merging the joint-stock company VST and joint-stock company Rytu Skirstomieji Tinklai, to prepare the company, which is currently under merging, for possible attracting of funds, to transfer auxiliary functions to maintenance companies.

The formation of the maintenance block, which will consist of activities separated from other enterprises in electricity sector, is aimed to purify and optimize activities of maintenance, by establishing two companies of network maintenance, by implementing promotion measures of free market and, if it is economically feasible, by allowing entrance of a strategic investor. It is also aimed to establish a generation maintenance company and assets management company, which would manage the non-technological real estate and transport under ownership and sell redundant assets at most favorable conditions. To establish a commercial information technologies enterprise which would perform the sales of data transmission and data center services at the market.

In the course of the reorganization the Technological Innovation Center UAB (TIC) was also established, aimed to concentrate competence of innovations implementation and necessary resources for preparation of strategies and development guidelines and coordination of strategies and functions of main blocks. It is also planned that TIC will provide IT services to LITGRID AB, Visagino Atomine Elektrine UAB and its daughter companies. TIC will also seek a synergy of the merged IT infrastructure while centralizing and cohesively developing IT systems and will provide services of competence improvement by using the National Center for Training of Energy Professionals. 

The reorganization of electricity sector, by which it is aimed to improve effectiveness of the system activity, separate and purify activities, increase energy independence and organize electricity infrastructure in accordance with the EU requirements, by ensuring the implementation of the key energy projects, commenced in November 2009, when resolutions were taken regarding the liquidation of LEO LT and possible changing the sector‘s structure. On May 4, 2010 the Government adopted resolution No. 517 “Regarding Approval of the Concept of Amendment Law on Electricity Law of the Republic of Lithuania“, by which was approved the concept of Amendment Law on Electricity Law of the Republic of Lithuania.

Thereby a green light was given to the essential processes of the reorganization of the electricity sector. The key changes are expected to be implemented by the end of this year, whereas all legal actions and business processes - in 2011.