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Korsakaite, D.*, Bieksa, D, Bieksiene, E. “Third Party Access to Existing Municipal Energy Infrastructure: Lithuanian Centralized District Heating Case Analysis”

The paper “Third Party Access to Existing Municipal Energy Infrastructure: Lithuanian Centralized District Heating Case Analysis” (Korsakaite, D.*, Bieksa, D, Bieksiene, E.) will be presented at the 7th Conference on the Regulation of Infrastructures (21-22June, 2018). 

ABSTRACT

Ensuring third party (TPA) access to existing infrastructure and establishing working competition in previously monopolistic sectors have been at focus for academic, policy and public administration practice for a number of years [3,4,10]. Particularly in energy infrastructures, these efforts have been rewarded with significant market changes in electricity and gas sectors all over Europe, and beyond. Infrastructure of district heating (DH), while belonging to the family of energy infrastructures, was addressed with challenges of TPA and competitive forces to far lesser extent.
The academic literature keeps discussion over TPA, potential of competition, expected benefits and challenges of introducing competition into DH systems. Nevertheless, the conviction, that DH systems are not a subject to competition, is still prevailing in energy policy and practice [7].
The DH in Eastern Europe, and in particular, in Lithuania is of essential importance as source of thermal energy supply to households. The bills for DH are among of the most important items of average household spending, if not the most important, during heating season. In the aftermath of several major energetic and policy circumstances that have fallen in Lithuania back in 2010-2012, an essential regulatory and market structure change was introduced in Lithuania – opening existing DH infrastructure for TPA and introducing competition principles for thermal energy generation and supply at wholesale level with monthly price and quantity formation auctions under single buyer model.
The essentially reformed regulatory and market structure works for 6 years by now, and the reform has brought major changes in the sector, regarding the number of active market participants, structure of fuels used, thermal energy price, ownership concentration.
The objective of this paper is to present and assess the impact of regulatory reform conducted in DH sector in Lithuania, suggest further regulatory steps to complete the reform. The academic and practical novelty of the work – recent regulatory reform of DH generation market is analyzed and impacts of the fresh reform are assessed. The practical applicability may be considered in terms of reforming further Eastern European markets of countries under transition as well as reforming other municipal sectors introducing market based principles.

The presentation is available here. 

ABOUT THE AUTHORS

Diana Korsakaite is a professional in regulation of multiple infrastructures. She is specialized in economic regulation and transiting monopoly infrastructure based markets to competition. Since 2010, working in energy and utilities area. Before moving to energy regulation, she was active in telecoms regulation. Since 2000, experienced in public governance and administration.
2010-2015 served as the Chair of national energy regulatory institution in Lithuania leading regulation through the period all the major energy sector transformations in Lithuania. Since 2015, she has working in international development area, energy markets. Chief of Party for USAID municipal energy reform project in Ukraine is the last role of engagement.
Professional experience of Diana Korsakaitė is characterised by active involvement to international exchange over regulatory issues programmes and close relations with academic society. Diana Korsakaitė took part in multiple missions abroad to carry out training on regulation of infrastructures to regulatory institutions’ employers, including Albania, Montenegro, Georgia, Ukraine, etc. For several years, she had hold a full course on Energy Regulation, for Master students in one of Lithuanian universities. She also has prepared a number of publications on infrastructure markets regulation.

Assoc. Prof. Dr. Darius Biekša is an associate professor at Vilnius Gediminas Technical University at the department of building energetics. Dr. Biekša has more than five years’ experience as a board member at the National Commission for Energy Control and Prices, an independent national regulatory authority (in the European Union legal sense) regulating the activities of entities in the field of energy and carrying out supervision of the state energy sector. Mr. Biekša’s professional interests and research activities are directly related to energy economics and infrastructure regulation, the development of renewables (in the legislative, technological and economic sense), energy efficiency and sustainable urban development.

*presenting author