The European Commission has opened an in-depth investigation to assess if Lithuanian support for state-owned energy company Lietuvos Energija unduly favoured the firm and distorted competition.
From 2013 to 2018, the Lithuanian Power Plant (LPP) owned by the energy company, was selected by the government to provide strategic reserve services, with the intention of increasing electricity supply security, for which it received financial payments.
Strategic reserves generally keep certain generation capacities outside the electricity market for operation only in emergencies.
The Commission will investigate if the service was necessary during that period when Lithuania increased its power interconnections with neighbouring countries.
It stated: “In order for the Commission to approve a capacity measure under EU state aid rules, the member state must demonstrate the need for the measure, ensure that it is fit for purpose and open to all capacity providers.
“At this stage, the Commission is concerned that the measure may not have been in line with EU state aid rules.”