Lithuania is privatising electricity provision. What do you need to know?

Lithuania is set to give up the state monopoly of electricity supply to households by 2023 and consumers will have to choose new energy providers. What should one know about the change?

 Why will households need to choose an electricity provider? 

Currently, electricity provision in Lithuania is in the hands of the state-controlled energy monopoly Ignitis. Electricity prices are set by the National Energy Regulatory Council (VERT) once every six months.

In May 2020, the Lithuanian parliament, Seimas, passed an amendment to the energy law, according to which the state must gradually phase out the regulation of electricity prices.

According to the Ministry of Energy, the reform will create conditions for competition and allow consumers to pick their energy provider.

 How to choose a new electricity provider? 

The liberalisation of electricity supply will happen in three stages. At first, people will receive letters with invitations to choose their new electricity providers.

The first stage includes 100,000 consumers who use more than 5,000 kWh of energy per year. They must pick their new providers by December 10, 2020.

The second stage will include users that consume more than 1,000 kWh of electricity per year. They must choose their new providers by December 10, 2021. In the third stage, all remaining households, as well as home administrators, will select their electricity providers.

People can find out their assigned stage on the ESO  website  . Households can choose a new electricity provider without waiting for the official letter.

 What will happen if one does not choose the provider? 

People will be able to choose from five companies: Ignitis, Elektrum Lietuva, Enefit, Perlas Energija, and Inregnum.

Those who will not identify their preferred provider before the deadline will getting electricity from the reserve supply. That, the government says, will be more costly. In any case, all those without a provider will be required to choose one by 2023 before the government’s supply stops.

 Will the price change? 

Despite changes in energy provision, people will keep their current meters that belong to the operator ESO. According to the website, the reform will not require any new infrastructure.

After the reform, the government will only regulate the part of the price that covers electricity transmission and distribution. Providers themselves will set their prices.

Although people can currently choose from five providers, the government says the competition is expected to increase. There are around 80 companies that have permissions to supply electricity in Lithuania. Most of these providers work with corporate consumers, as a similar energy reform was carried out in the business sector in 2010.


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