2023-10-24
National Audit Office: electricity infrastructure renewal and renewable energy development - too slow
The state of electricity infrastructure and the quality of services need to be improved, and the development of renewable energy sources could be faster. This is according to the National Audit Office's audit "Management of the Electricity Sector".
According to the auditors, the development of electricity generation from renewable energy sources is insufficient. The share of such electricity in final electricity consumption should have reached 30% in 2020, but only reached 25.5% in 2022. This is due to the untapped potential of onshore and offshore renewable energy development and the disruption of the supply chain of renewable energy technologies due to the COVID-19 pandemic.
The Law on Renewable Energy Sources and the planning documents for 2030 set different targets for electricity generation from renewable energy sources. Without harmonisation of the target result and a review of the means to achieve it, the targeted development of electricity generation from renewable energy sources will not be ensured.
According to the auditors, the state of electricity infrastructure and the quality of services provided should be better addressed. Currently, more than half of the overhead lines in the electricity distribution network exceed their useful life by an average of 14 years.
The audit results show that the liberalisation of the electricity market has helped to better safeguard consumers' interests. The State extended the deadline for Phase II of the liberalisation of the electricity market by half a year (from 31.12.2021 to 30.06.2022) to give consumers more time to make up their minds and assess suppliers' offers. This resulted in 44% of consumers who took the opportunity to take their time in choosing an independent electricity supplier having to sign electricity supply contracts at a higher price on the power exchange than in the second half of 2021.
The assessment carried out by the State Energy Regulatory Council found that the return on investment of the distribution network operator AB ESO for the period 2018-2021 was EUR 160.2 million higher than the prescribed level due to investments in depreciated assets that were lower than the expected need.
"On average, one consumer paid EUR 88.8 more for distribution services than they should have, and 96% of the overpayment (EUR 153.8 million) will start to be repaid after 10 years. Without clear criteria for when consumer overpayments must be repaid, there is no legal certainty, so the repayment of consumer overpayments can be postponed for a maximum period of time each time," said Mindaugas Šalčius, Head of the Performance Audit Department 3.
The implementation of the recommendations made by the National Audit Office will provide preconditions for faster renewal of electricity distribution infrastructure and development of renewable electricity.