A Letter of Intent to be signed on the development of a new, modern power supply infrastructure

The Liepaja Special Economic Zone Authority and the Municipality of Liepaja will sign a Letter of Intent with Latvia’s transmission system operator JSC “Augstsprieguma tīkls” (hereinafter referred to as – the AST) to strengthen cooperation in developing the infrastructure which is required for the German – Baltic electricity interconnection in Liepaja. For the said purpose the concept foresees allocating a proper site, which has already been selected. 

“New interconnections mean new opportunities for Latvia and the Baltic States as a whole. They enable deeper integration into electricity and ancillary services markets, create preconditions for new renewable energy projects, foster economic growth, and attract new businesses to Latvia. Every additional interconnection improves the security and stability of electricity supply — factors of particular importance in the current geopolitical environment. AST is actively developing additional interconnections with Estonia and Lithuania while simultaneously working on long-term development plans, exploring potential links with Sweden or Germany. As for interconnection with Germany, still much remains to be done before reaching investment decisions and confirming that such a project would be beneficial for Latvia. Once that confidence is achieved, we want to be ready for the next step — and the signed Letter of Intent will be a strong argument in favor of Liepaja as the Baltic–Germany interconnection ‘endpoint’. This initiative will also open significant opportunities for the development of the City, so we highly value the constructive cooperation with the Liepaja SEZ Authority and the Liepaja City Municipality, that recognize contribution of the aforementioned project to economic growth of the city and the region,” said Arnis Daugulis, Member of the Management Board of AST.

Although the project is still in its initial feasibility stage, the city’s commitment to participate in its implementation while creating conditions for a substantial increase in available electricity capacity in Liepaja. This, in turn, is a prerequisite for economic development of both the city and the region, enabling the establishment of modern manufacturing enterprises with high electricity demand.

Uldis Hmieļevskis, CEO of the Liepaja SEZ Authority and the city councilor emphasized that the construction of the Baltic–Germany interconnection would give Latvia an opportunity to become an exporter of wind and solar electricity, while also opening the door for new energy-intensive investment projects in Liepaja.

Continuing the development of transmission infrastructure projects of national and Baltic Sea regional importance, AST, together with the Lithuanian and German transmission system operators “Litgrid” and “50Hertz”, has launched work on an ambitious offshore power interconnection project between Germany and the Baltic States under the name - the “Baltic Hub.”

The 600 km-long offshore hybrid interconnector, with a total capacity of 2 GW, is planned to integrate the offshore and onshore transmission systems. To implement the project, land will be required for an onshore connection point integrating the submarine cable route infrastructure into the existing transmission grid and constructing a new high-voltage substation. The project is currently in its early development phase — the three transmission system operators are jointly conducting studies to determine the economic viability of the project, financing options, and other key aspects, including the optimal connection point in the Baltics — whether in Lithuania or Latvia.

The Liepaja SEZ Authority regularly consults with the AST management and experts to jointly plan the long-term, safe, and sustainable development of the electricity supply infrastructure. The Memorandum of Understanding continues the successful cooperation already established between Liepaja and AST. In 2024, the Liepaja SEZ Authority, together with the port company Liepajas SEZ “TERRABALT” Ltd. and the heavy cargo transport company “ULTIMA” Ltd., proved to be reliable partners in ensuring the delivery of Latvia’s first synchronous compensator to the AST substation in Grobiņa, which is the suburb of Liepaja.

The AST synchronous compensator helps to maintain inertia and stability in the transmission network — a capability that has become particularly important following the historic synchronization of the Baltic electricity grids with the European network, as well as with the increasing integration of renewable energy sources into the grid.