AI assistant
Litgrid AB Investor Presentation 2021
2262_rns_2021-10-05_438a9659-b7eb-4d2d-9b2f-15bacf11bf1c.pdf
Investor Presentation
Open in viewerOpens in your device viewer
Litgrid
Electricity transmission system operator
STRATEGY
2030
SECURITY | INTEGRATION | TRANSFORMATION
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030 M.
The purpose of the Strategy document
The purpose of this Strategy document is to set long-term priorities, goals, measures, to form strategic and performance indicators, on the basis of which the Company will assess the efficiency of its activities in the short and long term period.
The strategy document provides the performance data of "Litgrid", the projections and an objective view towards the changes in the environment and the changing market situation, identification of risks and their management measures, the principles for evaluation of our strategy, improvement and support which affect the long-term strategy of the Company.
We prepared the present Strategy document invoking the stakeholders that have a significant impact on the sustainable operation of the Company: consumers, producers/ suppliers, the founder, society and employees (stakeholders for each other). These elements are crucial in achieving the strategic and financial goals defined by the shareholder.
The success of implementing the objectives defined in the present document depends to a large extent on the requirements of relevant legal acts, also on the results of cost/ benefit analysis, feasibility and other related studies. The investment volumes are rated based on the information currently available to the Company, however, in the future the decision making can be shaped by changing circumstances and the need to maintain successful activity of the Company and the value created for stakeholders. The Strategy document is reviewed on an annual basis and updated as needed.
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030
About "Litgrid"
SERVICES
- Transmission of high voltage electricity (110-400 kv)
- System reliability management services
- Balancing consumption and production
- Services of public interest
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030
Customers of "Litgrid"
ELECTRICITY CONSUMERS
their electrical devices are connected to the electricity transmission network and they purchase electricity for consumption
Imbalance and balancing ELECTRICITY SUPPLIERS
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030
Reliable transmission of electricity in Lithuania
AIT - 0.21 min
Average interruption time due to the responsibility of "Litgrid"
ENS - 6.2 MWh
Energy not delivered due to the responsibility of "Litgrid"
6986 km
High voltage overhead lines
259 km
High voltage cables
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030
"Litgrid" 2020
TRANSMISSION NETWORK
73%
Employee engagement
10 089 million kWh
transmitted
INSTALLED POWER OF TRANSFORMERS:
400 kV - 768 MW
330 kV - 4450 MW
110 kV - 92.6 MW
FINANCE
53 million EUR
CAPEX
52 million EUR
EBITDA
13%
ROE
208 million EUR
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030
Towards energy independence
- Strengthening Lithuanian gate to the West - expanding the LitPol Link interconnection and Alytus substation
- Building the marine interconnection to Poland "Harmony Link"
- Strengthening internal Lithuanian transmission grids
- The foundation for network reliability: building synchronous compensators
- Preparing to operate the frequency independently
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030
Why do we have to change?
Electricity producers
Globalisation and geopolitics
Demonstrative
Demographic changes
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030
We strive for change with partners
In order to ensure the interests of the country and establish itself as a leader in its field within the Baltic region and Europe, we actively participate in national and international activities.
ENTSO-E
"Litgrid" is an active participant of the European Network of Transmission System Operators for Electricity (ENTSO-E), which brings together 42 electricity transmission operators from 35 countries.
Representatives of the Company participate, as permanent members, in the activities of ENTSO-E committees and working groups that at expert level prepare and discuss regulations, methodologies and other documents relevant for all the EU Member States, ensuring unified conditions of activity and regulations for European transmission grid operators. Participation in the activities of ENTSO-E, strengthening cooperation with other European transmission network operators is crucial for "Litgrid" in order to implement one of the priority tasks of the Lithuanian energy sector, i.e. the integration into the synchronous zone of the continental Europe.
BEMIP
The purpose of the Baltic Energy Market Interconnection Plan is to develop operating and integrated electricity and gas market, as well as to ensure the necessary energy infrastructure, by developing a competitive, sustainable, safe energy market in the Baltic Sea region.
The obligations of Lithuania to the BEMIP related to electric energy are implemented by "Litgrid" by means of projects facilitating integration into the synchronous zone of continental Europe, and putting in place the preparatory works for the development of offshore wind energy in Lithuania.
In 2020 "Litgrid" with other six transmission system operators in the Baltic Sea region signed a cooperation memorandum on the development of offshore wind energy in the region. The purpose of cooperation is to develop common principles for the planning of the Baltic Sea network, to include relevant regional projects in the ten-year ENTSO-E network planning documents and to conduct studies that would help to form a common vision for offshore wind network development in the region. This signed document is a very important step in order for the implementation of offshore wind projects planned in Lithuania to be efficient, technologically advanced, user-oriented and take advantage of the regional potential.
JAPANESE "TEPCO Power Grid"
To common goal of "Litgrid" together with TEPCO Power Grid is to apply the Baltic electricity transmission system model, under which 100% of electricity is generated from RES (the goal of NENS is to produce 100% of the electricity consumed in Lithuania from RES by 2050).
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030
BRELL
There are five synchronous zones in Europe: the Nordic Area, IPS/UPS, continental Europe, the British and the Irish Area.
A synchronous zone is a geographic area in which power generators are connected and operate under the same frequency and at the same rhythm. Lithuanian energy system is currently synchronously operating within the IPS/UPS system of Belarusian, Russian, Estonian, Latvian and Lithuanian power ring (BRELL). BRELL is an agreement between national electricity transmission system operators regulating dispatcher control issues within their energy systems. The PSO of the Baltic States seek that BRELL decisions would be compliant with the provisions of the Directives of the European Union. The interests of the parties to BRELL are represented by Belenergo (Belarus TSO), SO EES, Rosseto and FSK EES (Russian TSO), Elering (Estonian TSO), Augstsprieguma tikls (Latvian TSO) and "Litgrid". After connecting to the networks of continental Europe in 2025 the Baltic countries will desynchronize from the BRELL power ring.
EUROPEAN ENERGY INFORMATION SHARING AND ANALYSIS CENTRE
In 2020 "Litgrid" implemented the project "IMPLEMENTATION OF THE CRITICAL INFRASTRUCTURE DATA NETWORK MONITORING SYSTEM".
In order to share the acquired knowledge not only within the organisation, but also with international partners, the results created during the project will be disseminated in the formats of the European Energy Information Sharing and Analysis Centre. This will contribute to the implementation of the strategic goal of the Company - to be recognised as a professional in Europe - as well as to the growth of competencies of the specialists of the Company and the development of cooperation with foreign partners.
OTHER ASSOCIATIONS AT WHICH THE INTERESTS OF THE COMPANY ARE REPRESENTED:
- Lithuanian-Polish Commerce Chamber Association
- CIGRE
- National Lithuanian Energy Association (NLEA)
As a member of the above-mentioned associations, "Litgrid" maintains closer cooperation with regional and national partners, ensures the representation of the interests of the Company, more fluent implementation of strategic projects and communication on issues relevant to the Company with related parties.
HOW WILL WE CHANGE?
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030
"Litgrid" is changing
The company perceives its activities as a platform business model whereby a highly reliable electricity transmission infrastructure enables the value-creating equivalent interactions between suppliers and consumers*.
We are creating a sustainable, transparent ecosystem based on uniform standards, facilitating exchanges between producers/ suppliers and consumers, and creating value for society by empowering sustainable energy choices and contributing to the competitiveness of the country.
Exchange platform levels:
- TECHNICAL LEVEL - efficient transmission grids;
- COMMERCIAL LEVEL - mature market;
- VALUE LEVEL - sustainable energy.
Enable and encourage the platform participants to exchange electrical energy freely, to choose to produce or consume climate-neutral energy and obtain it at a competitive price whenever needed and as much as needed
Forecast for 2030
15 TWh
CONSUMPTION OF ELECTRICITY IN LITHUANIA WILL INCREASE ON AVERAGE BY
+1.9% every year
*Parker, Van Alstyne, Choudary "Platform revolution", 2016.
Electricity - the fuel of the future
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030
Key stakeholders
| Society | Producers/suppliers | Founder | Users |
|---|---|---|---|
| We perceive the society and its members not only as residents of the country or individual communities, but also as the environment, nature, fauna upon which the company has an impact | Segments: energy producers, suppliers and producing consumers. Furthermore, the contractors, technical suppliers and the transmission system operators of other states. | The founder of the Company is the State, the interests of which are represented and the expectations are formulated by the Ministry of Energy of the Republic of Lithuania and implemented under the control of EPSO-G. | Energy distribution operators, public suppliers, suppliers, heat producers and industry consumers. |
| The activities of “Litgrid” are based on the principles of social responsibility, sustainable development, transparency and smart environmental protection. The performance of the Company is an integral and inseparable part of the successful functioning of the country. We seek to support the growth and the strength of the society in which we operate by mitigating the negative impact upon the environment and adjusting the transmission system for the decarbonisation of the energy sector. | Energy producers and suppliers are participants of the electricity exchange platform ensuring proper supply. The contractors and other partners of the Company contribute to the implementation of strategic projects and goals. | The expectations of the country are reflected in the agendas of our shareholders - close cooperation is necessary to ensure the formation of a coherent and long-term vision of the energy sector and the smooth implementation and sustainable return from a range of initiatives implemented on national and regional levels. | The companies of the Group cooperate in the manner of B2B (business-to-business). That is a supply building group of platform participants. |
Employees (for each other)
All employees of the Company.
Experienced, competent and value-driven professionals constitute the essential prerequisite for achieving strategic goals and priorities.
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030
Commitments of "Litgrid"
MISSION
We enable sustainable and efficient exchange of electricity
PROFESSIONALISM | COOPERATION | PROGRESS
USERS
Focus on consumer expectations and provision of innovative services
PRODUCERS/ SUPPLIERS
Becoming a desirable partner of open data, flexible services and the most reliable infrastructure
SOCIETY
Act in socially responsible as well as safe manner and reduce the impact of our activities upon the environment
FOUNDER
Develop a sustainable value and implement strategic objectives
FOR EACH OTHER
Become a recognised professional in Europe and one of the most-desired employers in Lithuania, valued and recommended by the employees
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030
Priorities of "Litgrid"
VISION
The most advanced electricity system operator in Europe
smartestTSOcommunity | VALUE-BASED MANAGEMENT
USERS
Create customer-focused organisation, based on innovative services to meet customer expectations
PRODUCERS/ SUPPLIERS
Develop the market and the infrastructure sustainably
SOCIETY
Reliable and high-quality electricity transmission in Europe with a purposeful reduction of environmental impact
FOUNDER
A competitive and reliable partner implementing the NEIS objectives
FOR EACH OTHER
Constantly evolving team of professionals that we are proud of
WHAT
RESULTS DO
WE EXPECT?
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030
Long term planning 2020 - 2050
WE HELP IMPLEMENT THE ENERGY EVOLUTION IN LITHUANIA
- the infrastructure is prepared for the Lithuanian railway electrification in 2023 - 2026
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030
Strategic KPIs of "Litgrid" for 2030
19
STRATEGIC KPIS of “Litgrid” for 2030 Users
-
Growth in customer experience appreciation, according to the survey in 2021 in comparison to the defined target objectives
-
0 instances of RES supply transmission to the grid restrictions because of breach of legal acts and/ or the terms of connection contracts
-
AIT ≤ 0.29 MIN (average interruption time)
-
ENS ≤ 6.3 MWH (energy not served)
-
Average energy transmission price for LT needs ≤ average region (LV, EE, FI, PL, SE)
-
≤ 2 EUR/ MWH difference in wholesale prices compared to LV, SE4, PL price zones
ELECTRICITY AT AGAIN: ANALYSIS OF THE ELECTRICITY AT AGAIN
GIC KPIS of “Litgrid” for 2030 Producers/suppliers
GROWTH IN CUSTOMER EXPERIENCE
appreciation, according to the survey in 2021 in comparison to the defined target objectives
GROWTH IN OPEN DATA MATURITY LEVEL,
according to the survey in 2021 in comparison to the defined target objectives
STRATEGIC KPIs of “Litgrid” for 2030 Society
Environmental impact reduction
according to the assessment of 2021 in comparison to the defined target goals
0
material environmental incidents
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030
STRATEGIC KPIs of “Litgrid” for 2030 Founder
2025
Transmission grid prepared to be synchronised with CEN
≥ 2
implemented intersectoral system integration projects
ROE ≥ 6.3 %
2024-2030 average
OPEX set by the regulator has not been exceeded
90-100 %
CAPEX
≤ 2.80 EUR per year
network recovery and maintenance costs per 1 MWh
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030
STRATEGIC KPIs of “Litgrid” for 2030
For each other
0
severe or fatal accidents at “Litgrid” sites when operating, reconstructing or building new electric transmission grids
≥ 15
accomplished break-through and/or radical innovations
≥ 75 % employee engagement
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030 M.
Innovation ecosystem
INNOVATIONS IMPLEMENTED BY THE UNITS (typical implementation duration 0-2 years)
Small-scale
Improving existing products and services using existing or known technologies
INNOVATIONS BY DIFFERENT UNITS (typical implementation duration 2-5 years)
Break-through
Large-scale and high-impact changes to existing products and services
COOPERATION WITH RESEARCH INSTITUTES (typical implementation duration 5-10 years)
Radical
New products and services that open up new areas of business or markets
INNOVATION DIRECTIONS:
Advanced and efficient asset management
Advanced and efficient system management and monitoring
ITT and digitalisation
Business organization and new services
TO HEAR
TO EXPLORE
TO IMPLEMENT
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030 M
KPIs of "Litgrid" for 2030
THE BENEFITS OF IMPLEMENTING THE STRATEGY ARE ENSURED
USERS
Growth in customer experience appreciation, according to the survey in 2021 in comparison to the defined target objectives
AIT ≤ 0.29 MIN
ENS ≤ 6.3 MWH
0 instances of RES supply transmission to the grid restrictions because of breach of legal acts and/ or the terms of connection contracts
≤ 2 EUR/ MWH
difference in wholesale prices compared to LV, SE4, PL price zones
Average energy transmission price for LT needs ≤ average region (LV, EE, FI, PL, SE)
PRODUCERS/ SUPPLIERS
Growth in customer experience appreciation, according to the survey in 2021 in comparison to the defined target objectives
Growth in open data maturity level, according to the survey in 2021 in comparison to the defined target objectives
SOCIETY
Environmental impact reduction according to the assessment 2021 in comparison to the defined target goals
0 material environmental incidents
FOUNDER
2025 Transmission grid prepared to be synchronised with CEN
≥ 2 implemented intersectoral system integration projects
ROE ≥ 6.4%
OPEX set by the regulator has not been exceeded
90-100 % CAPEX
≤ €2.80 per year network recovery and maintenance costs per 1 MWh
EACH OTHER
0 severe or fatal accidents at "Litgrid" sites when operating, reconstructing or building new electric transmission grids
≥ 15 accomplished break-through and/ or radical innovations
≥ 75 % employee engagement
Freedom of choice: we enable sustainable and efficient exchange in electricity
HOW WILL WE
ACHIEVE THIS?
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030 M
We perceive a reduced environmental impact as:
- TRANSPARENCY OF THE ACTIVITIES OF THE COMPANY, NON-DISCRIMINATORY, CONSCIOUS AND SOCIALLY RESPONSIBLE DECISION-MAKING AND DECISION AVAILABILITY TO THE PUBLIC
-
MAXIMUM REDUCTION OF EQUIPMENT EXPOSURE
-
RENEWABLE ENERGY INTEGRATION
-
DECREASED ENVIRONMENTAL IMPACT WHEN PLANNING OPERATIONS AND ASSESSING THEIR IMPACT, ALSO ADAPTING THE EXCHANGE PLATFORM FOR THE DECARBONISATION OF THE ENERGY SECTOR
-
CREATION OF AN ENERGY-SAFE STATE, ENSURING ENERGETIC INDEPENDENCE OF LITHUANIA BY SYNCHRONIZING THE LITHUANIAN ELECTRICITY SYSTEM WITH THE CONTINENTAL EUROPEAN ELECTRONICS SYSTEM
-
ZERO TOLERANCE FOR:
- JUSTIFIED RECURRENT COMPLAINTS REGARDING THE LIABILITY OF "Litgrid" OR ACTIONS OF THE CONTRACTORS
- SIGNIFICANT ENVIRONMENTAL INCIDENTS AT "Litgrid" SITES
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030 M.
We will create a customer-oriented organization
We will strive to create a sustainable, transparent ecosystem, enabling efficient electricity exchange for all market participants
VALUE PROPOSAL TO PRODUCERS AND SUPPLIERS:
- Market opportunities
- Transparency
- Speed
VALUE PROPOSAL TO USERS:
- Reliability
- Choices
- Transparency
- Competitive price
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030 M.
We will implement digital transformation
Electricity transmission systems are going through a time of transformation, as technologies and innovations change the traditional model and attitudes towards generation sources as well as their management methods
New trends and innovations are linked to major sectors of the economy, such as transport or heating, electrification, energy efficiency, decentralization (small grid connection) and digitalization - equipment automation, deployment of smart metering systems and other grid digitalization solutions and network management, data storage in remote information repositories (cloud technologies).
All that enables not only the development of intelligent transmission system management, but also the integration of electricity consumers into network management, electricity consumers could be notified in advance in order to encourage them to become active market participants.
2022
- A fully operational EnergyTech platform
2023
- “Litgrid” business process automation concept
2024
- Integrated relevant “Litgrid” and consumer IT systems
2025
- “Litgrid” is a company that quickly responds to the changing environment and is the centre of excellence in energy, since analytical self-service tools are used to model business insights
2026
Data-driven organization
2027
Data driven ecosystem
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030 M
Main results for stakeholders
2022
Seeking to become a competitive participant of the market, safe from discrimination, we will establish the Baltic region coordination management centre in cooperation with the Latvian and Estonian system operators
2024
In order to ensure the optimal use of the corporate resources we will be managing the technological assets of the Company in accordance with the requirements of the internationally recognized ISO 55001 standard
We will join the European automatic frequency recovery reserve exchange platform (PICASSO) by 2024 to ensure system frequency management for synchronization with single European market mechanisms of CEN
We will integrate into the European manual frequency restoration reserve exchange platform (MARI) to ensure the most economically efficient management of balance deviations and the new opportunities for market participants
2026
By increasing the volumes of trade in electric energy between the Baltic states and Poland we will be ensuring additional 200 MW permeability for the market
Seeking to reduce the natural pollution and following the good practice of ENTSO-E innovative solutions we will be upgrading six transformer substations that do not contain substances causing climate warming and pollutants (SF₆ gas and oil insulation)
Seeking to implement the European green course (zero pollution and 100 % RES), a sector coupling system will start operating by 2030
We will strengthen safety and change the behavior of employees/ contractors in order to work without accidents
2021
For the purpose of implementing the measure plan of the government of the Republic of Lithuania designed to protect from the unsecure nuclear power plant in Astravas, we will develop the concept of certificates of origin of electricity
2023
By cooperating with AB "Amber Grid" we will implement a water electrolysis pilot project (power to gas)
In 2023-2025 we will prepare the electricity transmission system for the integration of the Lithuanian electrified railway
2025
Ensuring the energy independence of Lithuania, the electricity system of the Republic of Lithuania will be prepared for interconnection with continental European electricity network for synchronous operation
Furthermore, we will implement the power and heat sector integration project (power to heat)
We will ensure the efficiency and reliability of the network to become one of the TOP5 European operators with the biggest share of sun and wind energy in the final consumption balance
2027
We will prepare electricity transmission system for a 700 MW Baltic offshore wind farm integration
2030
We will implement the globally justified initiative decisions regarding the further development of the use of the Baltic Sea offshore wind (multiterminal offshore hub)
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2030
Financial forecasts
Investment - 1.38 billion EUR
The priority of investment financing is to minimize the burden on network users
Arguably being the largest investor in Europe we will seek to ensure that the electricity transmission tariff does not exceed the tariff of other Baltic countries
Investment
2020 - 2030
- Synchronization with Continental European Network
- Grid restoration and new construction
- Initiative of grid users
- ITT and other projects
Investment funding sources 2020 - 2030
- Funds of grid users
- EU grants
- Proceeds for the overload
- Own and borrowed funds
ELECTRICITY TRANSMISSION SYSTEM OPERATOR LITGRID STRATEGY 2020
Abbreviations
| RES | Renewable energy sources | ||
|---|---|---|---|
| AIT | Average interruption time | NENS | National Energy Independence Strategy |
| ENS | Energy not supplied/ delivered | KET | Continental European Network |
| ROE | Average annual return indicators | CIGRE | International Council on Large Electric Systems |
| EBIDTA | Earning before interest, taxes, depreciation and amortisation | ENTSO-E | European Network of Transmission System Operators - electricity) |
| CAPEX | Investment/ capital investment | IPS/UPS | Interconnected Power System/Unified Power System) |
| OPEX | Operating expenses | BEAIP | Baltic Energy Market Interconnection Plan) |
| EE | Estonia | BRELL | Agreement between the Transmission System Operators of Belarus, Russia, Estonia, Latvia and Lithuania regulating the coordination of actions between BRELL members - TSO - on the issues of operational planning and technological management of electricity systems |
| LV | Latvia | ||
| PL | Poland | ||
| SE | Sweden | ||
| FI | Finland | DATA HUB | Data accumulation and exchange platform |
| SE4 | The fourth wholesale electricity price zone in Sweden | IPS/UPS | Synchronously operating electricity system between the Baltic States and the Commonwealth of Independent States |
| EU | European Union | ||
| Power to heat | Electric energy conversion to heat energy | CEF | Connecting Europe Facility |
| Power to gas | Water electrolysis | TSO | Transmission system operator(s) |
| ITT | Information technologies and telecommunications | ||
| --- | --- | ||
| TP | Transformer substation | ||
| SFx | Sulphur hexafluoride | ||
| Co2 | Cardon dioxide | ||
| kV. | Kilovolt | ||
| kW. | Kilowatt | ||
| MWh. | Megawatthour | ||
| TWh. | Teravarhour | ||
| km. | Kilovolt | ||
| min. | Minutes |
SECURITY | INTEGRATION | TRANSFORMATION