Lithuania, together with the other Baltic states, reached a record–high price of electricity on Wednesday evening, informs Lithuanian public media LRT.
Although the price shock was unlikely to affect most consumers, it significantly influenced businesses and industries.
Experts say the high price of gas, which is used in electricity generation, was partly also because of the heatwave, which forced the country to limit the loads on its network.
The algorithm used to calculate prices in the Nord Pool market was also criticised by Lithuanian officials.
This also follows the earlier bombshell news of Perlas Energija, an independent electricity provider, who cancelled contracts with thousands of households, before announcing it would be suspending its operations. The government now said it will partially compensate those affected. The prime minister and the president have now agreed that protecting consumers is the state’s top priority.
Meanwhile, two additional power plants were activated this week.
Seeing the times now, giving up nuclear energy was a mistake, said a Lithuanian official.
A planned nuclear plant, which failed to get support in a referendum several years ago, was due to begin operating in 2022 (assuming everything would have gone as planned in the construction process). Lithuania’s sole nuclear plant, the Ignalina NPP, was closed as a precondition for the country to join the EU, as it was considered unsafe – being the same reactor type as Chornobyl.
Coupled with the energy prices, are the pandemic subsidies also to blame for the inflation? According to Jeffrey Sommers, professor of political economy at the University of Milwaukee in the US, the answer is no. Inflation seems to be higher in countries bordering Russia and Ukraine, potentially showing more side–effects of the war, he says.