Implications of carbon price paths on energy security in four Baltic region countries

Abstract

Energy security is one of the critical priorities of energy policy in the European Union and particularly in the Baltic region that is currently transforming itself from an isolated energy island to a highly interconnected area. In this paper, a comprehensive analysis of energy security in Estonia, Finland, Latvia, and Lithuania in the context of the energy transition is presented. The paper explores regional implications of two paths of carbon price (gradual and delayed carbon price increase). The analysis is performed by linking an energy system optimisation model with a probabilistic model of energy security. This modelling suite is used to assess the resilience of the planned energy system to possible disruptions. The results demonstrate that carbon price paths have a modest impact on energy security in Baltic countries if energy security measures are implemented in an optimal way. The research is based on the case study conducted in the framework of the European Union's Horizon 2020 project REEEM.

Keywords

• Energy transition
• Energy security
• Carbon price
• Reserve services
• Baltic region