The Lithuanian parliament (Seimas) has adopted a motion amending the Law on Electricity, which will gradually liberalise residential prices on the retail electricity market, with the objective to end regulated tariffs by 2023. The purchase and supply price of electricity, which makes 48% of the final price, will no longer be regulated. The other components of the price – electricity transmission, distribution, and public service obligation – will continue to be set by the government.
During the first stage, beginning in January 2021, final electricity prices will be deregulated for consumers who consume more than 5,000 kWh/year (5% of total consumers). The threshold will be lowered to 1,000 kWh/year (43% of total consumers) from 2022. At the final stage, from January 2023, regulated prices will be abandoned for all consumers below 1,000 kWh/year (52% of total consumers). More favourable guaranteed supply pricing will be applicable to vulnerable consumers if they do not choose an independent electricity supplier. In addition, the government plans to introduce smart meters.
Following the new electricity law of 2000, the opening of the market took place in several phases: in 2002 for consumers over 20 GWh (20% of the market), in 2003 for consumers over 9 GWh/year, and in 2004 for all professional consumers. Since 2007, all consumers have been free to choose their electricity supplier. Regulated tariffs were removed for non-household consumers in several phases: capacity over 400 kW in 2010 (35% of the market), over 100 kW in 2011 (45% of the market), over 30 kW in 2012 (55%), and all others in 2013. Residential consumers still benefit from regulated tariffs and nearly all household consumers purchase electricity from the state-owned energy group Ignitis, with the price of electricity being set every six months by the National Commission for Energy Control and Prices (NCC). The liberalisation of the electricity market is one of Lithuania’s EU commitments.
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