lithuania –the region’s energy

Lithuania – the region’s energy

competence centre

Litgrid 2015 Activity Report for Shareholders

and the Public

27 April 2016, Vilnius

Table of contents

Implementation of Litgrid strategic goals

Reliability of the electricity system and network

Development of the organisation and the region’s energy competence centre

Financial results

Upcoming tasks for strategy continuity

Strategic interconnections

4

• The first electricity link between

Lithuania and Poland, between the

Baltic countries and Western

Europe

• The link has been in operation

since 9 December 2015

• 163 km electricity transmission line

Alytus-Elkas

• 500 MW HVDC converter station

near Alytus

• Total project cost – € 580 million:

€ 150 million in Lithuania and € 430

million in Poland

• EU funds – € 200 million (in Poland)

and € 31 million (in Lithuania)

J F M A M J J A S O N D

2009


2013


2012


2010


2011


2014


2015


2016

400 kV line

Alytus – state

border

400 kV line

Elk – state

border

Elk Substation

Reconstruction

DESIGN

DESIGN, MANUFACTURING, AND CONSTRUCTION

TERRITORIAL PLANNING, DESIGN, AND CONSTRUCTION

CONSTRUCTION OPERATION

OBTAINING OF PERMITS


TERRITORIAL PLANNING AND DESIGN

TERRITORIAL PLANNING AND OBTAINING OF PERMITS

HVDC

Converter

Station

Alytus 330 kV

Switchyard

Expansion

OPERATION

OPERATION

OPERATION

OPERATION

CONSTRUCTION


DESIGN

CONSTRUCTION


LitPol Link implementation

Reinforcement of corner pylons

on the line Alytus – state border

0%

10%

20%

30%

40%

50%

Iki 15.04.01 Po 15.06.26

Laidų tempimas Pamatų montavimas

0

0,5

1

1,5

2

2,5

3

3,5

4

4,5

5

Polių įrengimui Galvenųįrengimui

Kampuočiųsuvirinimui

Laidų tempimui

Iki 15.06.26

Po 15.06.26

Contract work resources of the line Alytus –

state border before and after 26 June 2015

Before 26 June 2015

After 26 June 2015

For pylon

installation

For header

installation

For corner

reinforcement

For wire

pulling

Wire pulling Installation for foundation


2009


2013


2012


2010


2011


2014


2015


2016

HVDC Cable

HVDC

Converters

Nybro Substation

Reconstruction

DESIGN AND MANUFACTURING

DESIGN, MANUFACTURING, AND INSTALLATION

TECHNICAL DESIGN

DESIGN AND CONSTRUCTION

LAYING LAYING

OBTAINING OF PERMITS – SE

OPERATION

CONSTRUCTION

OBTAINING OF PERMITS – LT

CONSTRUCTION

SEABOTTOM INVESTIGATION

OBTAINING OF PERMITS – LT

OBTAINING OF PERMITS – SE

TERRITORIAL PLANNING, DESIGN, AND OBTAINING OF PERMITS

PREPARATION

WORKS

TECHNICAL DESIGN

Klaipėda

Transformer

Substation

Reconstruction

330 kV OL

Klaipėda – Telšiai

OPERATION

OPERATION

OPERATION

OPERATION

NordBalt Implementation

Horizontal drilling under the

Curonian Spit

1 640 m under the the

Curonian Lagoon and 800 m

under sand dunes

Cable pulling under the Curonian Lagoon

64 tons, 2 days from the

delivery of the cable to the port

to pulling under the Curonian

Lagoon

Concrete mattresses under and on the cable at a

depth of 60 m

Crossing with the Nord Stream gas

pipeline

Filling of the sea cable with rubble

58,860 tons of rubble

delivered by 4 ships

The symbolic links connection

ceremony in the Grand Dukes Palace

of Lithuania on 14 December 2015

A subsidiary of Litgrid has fully taken over

the operation of the connections

Electricity transmission never

stops

HVDC connections disconnected 138 times in

2013

Electricity generators disconnected 67 times in

Lithuania in 2014

24/7 electricity transmission to consumers is ensured by the Litgrid System Control Centre

NordBalt – technologically complex

and second-longest connection

35%

9%

262

105

171

233

299

160

150

150

450

580

212

211

213

226

57

254

1

0 100 200 300 400 500 600 700

Baltic Cable (SE-DE) 1994

Estlink 1 (FI-EE) 2006

Estlink 2 (FI-EE) 2014

Fenno-Skan 1 (FI-SE) 1989

Fenno-Skan 2 (FI-SE) 2011

Kontek (DK-DE) 1986

Konti-Skan 1 (SE-DK) 2008

Konti-Skan 2 (SE-DK) 1988

NordBalt (LT-SE) 2016

NordNed (NO-NL) 2008

Skageraak 1 (NO-DK) 1976




Storebaelt (DK-DK) 2010

SwePol (SE-PL) 2000

Vyborg Link (RU-FI) 1981

HVDC jungčių ilgis, km

7%

4%

29%

23%

16%16%

17%

5%

8%

35%

32%

13%

15%

13%

Connection unavailability per

year, %

Connection

unavailability per

year, %

Length of HVDC connections, km

Reliable and effective network

In 2015, demand for electricity

increased 1.4%

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

5,0

5,5

6,0

6,5

19901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012201320142015

TWh Pramonė

Transportas

Žemės ūkis

Gyventojai

Paslaugos ir kiti vartotojai

• In 2015, 10.86 TWh of electricity was consumed in Lithuania

• Electricity consumption by industrial companies increased more by than 3%, while

the needs of the service sector grew 1.8%

• Consumption by the population remained stable

• Almost 16% of the consumed electricity was produced from renewable energy

sources.

Industry

Transport

Agriculture

Population

Services and other consumers

12,07

4,75

36,50

1,79 2,24

11,637,53 7,36 6,70 5,36 4,54

0,350,15

1,08

0,230,06

0,490,35 0,34 0,31 0,25 0,23

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Operatoriaus atsakomybė

END bendras, MWh

AIT bendras, min

2015 END = 4.5 MWh, AIT =0.23 min.

Best reliability indicators

• The majority of disconnections is caused by natural conditions and other

external causes

• A quarter of incidents is caused by the careless behaviour of people in

overhead line protection areas

The operator’s responsibility

Total END, MWh

Total AIT, min

Nusidėvėjimo normatyvas, 35 metai

0

10

20

30

40

50

60

95 reconstructed

substations

59 TP ≤ 35 y 80 TP ≥ 35 y

139 non-reconstructed

substations

Facilities are reconstructed to

maintain the reliability of the

network

Substation operation time, years

• In 2015, 15 transformer substations were reconstructed

• Substations, lines, and other facilities age and naturally wear, so investments

in the network facilities are continued with rather high intensity

Depreciation rate, 35 years

Concern for smaller ones

• In 2015, a total of 6,000 special wire

markers, stork protection devices,

additional insulators were installed

and 121 nesting-boxes for kestrels

were mounted

• Works amounting to EUR 164,155

were performed

• A monitoring plan was drawn up in

order to assess the impact of the

newly constructed and operating

lines – LitPol Link and Klaipėda-

Telšiai

The sense of community and

social responsibility- The website www.elektrosistorija.lt, which is designed to provide, in

simple terms, general knowledge on the members, a brief history and

present time of the electricity system, currently operating power stations

and assurance of electricity demand as well as key development

aspects

- For four consecutive years, Litgrid employees plant forest trees on the

occasion of the professional holiday of Power Engineer's Day

- During 2015, the company received 25 groups of visitors who were

interested in the electricity system and the strategic interconnection

projects and learned about the specifics of the work of energy

professionals

- Attention to the activities of Litgrid from officials of various countries and

experts and high-rank executives of international organisations brings

Lithuania into an international focus

www.elektrosistorija.lt Traditional forest planting 25 tour groups

Lithuanian and Swedish heads of states

Litgrid – the company with the strongest sense of community

Nasdaq award for the most prominent progress

Enhancement of the design and

contract work quality and

occupational safety

To improve the quality of projects being implemented

To enhance the safety of the work of contractor and customer specialists

To manage risks more efficiently

To raise the quality standard for contract work

The expected result – better

quality

High-quality and reliable expert examination of projects

Updated standard design and work contracts

Contract termination option

The enhancement of technical supervision and

occupational safety quality

The procurement of works is based on the principle of economic

efficiency

Financial results• Litgrid will pay EUR 0.0091 per share in dividends

• Lower costs due to more efficient operating costs and ITT

management

• The asset value reduction after the asset evaluation performed in

2014 led to lower depreciation costs

• The subsidiary Tetas operated profitably and paid dividends in 2015

Key financial indicators

159

20

4760

106

2034

10186

21 27

208

0

50

100

150

200

250

Pajamos, mln. eurų Veiklos sąnaudos, mln. eurų EBITDA, mln. eurų Investicijos, mln. eurų

2013

2014

2015

19% reduction in transmission tariff

rate

Without regard to the result of asset

depreciation

89% – for the implementation

of strategic projects

50%

15%

9%

2%4%

3%

17%

Elektros perdavimopajamos

Balansavimo energijospajamos

Sisteminių paslaugųpajamos

ITC pajamos

VIAP

Kitos su elektros energijasusijusios pajamos

The reduced transmission

tariff rate resulted in lower

income

OPEX structure, 2015

0

0,1

0,2

0,3

0,4

0,5

0,6

0,7

0,8

0

10

20

30

40

50

60

70

80

2011 2012 2013 2014 2015 2016

Investicijos, mln. eurų Perdavimo kainos viršutinė riba, ct/kWh

31%

28%

15%

9%

5%

2%9%

Darbo užmokestis irSODRA

Turto remontas irpriežiūra

ITT paslaugos

Mokesčiai

Patalpų nuoma,transportas

Mokymai irtarptautinė veikla

Kitos

Income structure, 2015

Investments, EUR million Price cap, cent/kWh

Salaries and social

insurance

Asset repair and

maintenance

ITT services

Taxes

Rent of premises;

transport

Training and

international activities

Other

Electricity sale income

Balancing energy income

System service income

ITT income

PSO

Other electricity-related

income

Strategy continuity assurance

The network projects for

synchronisation start this year

Vilnius junction

strengthening

Ignalina NPP transformer

substation reconstruction

Growing demand

• Today, the demand of Vilnius region accounts for one third of the national capacity demand

Decreasing production

• Electricity production at Vilnius power plants decreases

Synchronisation

• The synchronisation of Lithuania's electricity system with СEN and de-synchronisation from IPS/UPS

Reasons for Vilnius junction

strengthening

Projects

The construction of the 330

kV electricity line Vilnius –

Lithuania Power Plant

Vilnius transformer

substation strengthening


kV electricity line Neris –

Baltupis and reconstruction

of the 110/10 kV Baltupis

transformer substation


kV electricity line Vilnius –

Vilnia – Neris (with

installation of Vilnia

transformer substation 330

kV switchyard)

The reconstruction of Neris


1

2

3

4

5

In operation since 1981

• The condition of the facilities is critical and requires major repair

For new customer connection

• The nuclear fuel storage will be connected here

Strongly integrated with the Belarusian electricity system

• Non-adapted for the isolated operation of the Baltic countries and asynchronous operation of the Baltic electricity systems with IPS/UPS

The reconstruction of INPP


The projects important to Lithuania are in the

list of Europe's common interest projects

The electricity line Alytus – Kruonis

HPSP

The second Lithuania – Poland link

The synchronisation of the Baltic countries

with the CEN

The optimal use of the network

and links

The sustainable AEI

integration and management

model

The decision on the increase

of LitPol Link capacity

The isolated operation test of the

electricity systems of the Baltic

countries

2016 2017 2018Q2 Q3

Preparation works and analysis

Q4

The start of the dynamic and static stability study

The results of the

study

The decision on the isolated

operation test

The isolated operation test

Q2

Isolated operation is an

important step of preparation

for synchronisation

The results we are proud of

were achieved by the team

• The average employee age

– 42

• The average length of

experience in the energy

sector – 12 years

• The longest experience –

51 years

• 74% of the staff – men;

26% – women

• 50% of the staff are

graduates of KTU

• 8 doctors of science work

in Litgrid

• By successfully

implementing unique

energy projects of

European significance, we

accumulate exclusive

competences

235 professionals'

team

Experience of unique projects

5,089 training hours

19 internship places for students

43 specialised conferences

25 tours for interested

visitors

Reports at 5 international conferences

Mentoring programme

The issues of the electricity market, links and

generation development remain relevant

Per year, ~€ 90 lower costs on electricity

The second link with Poland

The development of flexible and effective

generation in the region

The second link with Sweden

The regional discussion on energy strategies

Lithuania – the region’s energy

competence centre

• 12 electricity links with

Latvia, Russia, and

Belarus

• Estlink 1 and 2 are the

only electricity links with

the Northern Europe

• From 2010, the biggest

electricity importer

among the energy

systems in Europe

• No power connection with

the Western Europe

Until 2016, Lithuania is the EU's energy

island

Today, Lithuania is the crossroad

of power flows

Empowering the growth of

Lithuania

lithuania –the region’s energy

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