S P R I N G 2020
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B A LT I C B U S I N E S S Q U A R T E R LY | S P R I N G 2020
Organizers of the event
2nd German-Baltic Digital Summit 7 October 2020, Munich Germany is not only the biggest single European IT market. It also invest massively in its own digital infrastructure and services portfolio. Germany is therefore a main target market for Baltic services suppliers and benefits at the same time significantly from cooperation with the innovative Baltic technology scene.
Digitizing Energy
Estonia, Latvia and Lithuania are European figureheads and global forerunners when it comes to digitization. Digital Energy solutions, Sustainable Mobility in a Smart City, Cyber Security and Digital Administration & E-Government are the main topics of the 2nd GermanBaltic Digital Summit.
44 | B A LT I C S TA RT- U P S
Skeleton Technologies: Competing against big names
www.digital-baltics.de
www.ahk-balt.org
Partners of the event
12 | Personality
Historic visit of the German Minister for Economics and Energy, Peter Altmaier, to the Baltics
28 | Interview
Trading biomass like electricity, Andrius Smaliukas, Baltpool
34 | Baltic energy transformation
What does the future energy system look like
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German-Baltic Chamber of Commerce (AHK), at your service
organizers of the event
supported by
E D I TO R I A L
“Climate change is presenting the greatest challenge humanity has ever faced.” Al Gore, 2013
we
have known it since the first report by the Club of Rome (The Limits of Growth) in 1972. Now we are literally on the edge. The challenge ahead is no longer a theoretical question from some high-level academics.
wind energy/offshore sector, there is an enormous, largely unused potential for all three countries. One step in this direction could be the recently announced cooperation between Estonia and Latvia on an offshore wind farm in the Gulf of Riga.
Climate change will affect our lives, our thinking, our economy, the way we do politics, the way we raise our children, our mobility, our housing – well, it is hard to think of anything that will NOT be affected in one way or another.
Another very important factor on the way to reducing greenhouse gases is to save energy. There is also huge potential with regard to energy efficiency in buildings.
Europe’s answer to the urgent need for action is the Green Deal – the way to a carbon neutral economy by 2050. Ursula von der Leyen, the new President of the European Commission, has issued the goal of bringing the economy into line with our planet and making sure that the economy works for the people. In this respect, the Green Deal could also become Europe’s new growth strategy, as Europe wants to be at the forefront of climate-friendly industries and clean technologies. All three Baltic states have already not only achieved the target of 20% renewable energy consumption in 2020 for EU member states, but significantly exceeded it. Latvia’s share currently stands at 40%, Estonia’s at 30% and Lithuania’s at 24%. Despite these impressive figures, there is still plenty of room for improvement. Especially in the
EU recycling targets 2025
Municipal waste
Packaging waste
55%
65% 59%
Estonia
28%
Latvia
25%
62%
Lithuania
52%
54%
Status of the recycling targets. Based on Eurostat figures for 2017/2018.
I would like to point out that one last very important piece of the jigsaw puzzle on the way to a climate-neutral economy is a low-emissions transport infrastructure. The best example of this is the unique Rail Baltica project, which will not only integrate the three Baltic states into the European railway network, but will also be operated in an environmentally-friendly way using electricity. One field where clear and significant measures are already possible is the issue of waste and its recycling (see infobox). Let’s not waste any time here either and tackle this problem fast! To sum it up, the Baltics have the potential to contribute significantly to the new green deal. It will protect the unique beautiful nature with the marvellous costal landscapes around the Baltic Sea, which we all love so much. Best regards, Florian Schröder – Executive Board Member
Deutsch-Baltische Handelskammer in Estland, Lettland, Litauen German-Baltic Chamber of Commerce in Estonia, Latvia, Lithuania
Baltic Business Quarterly is a publication of the German-Baltic Chamber of Commerce (AHK) and is released four times a year. For questions or subscriptions, please contact info@ahk-balt.org
CONTENT | 3
2 | CONTENT
4 10
Business in Picture Guest Commentary: Digitization in the Energy sector: trends and challenges
14 Baltic Business News 18 My Office: Mindaugas Ubartas,
12
PERSONALITY
Peter Altmaier
38
Federal Minister for Economic Affairs and Energy gives an interview to Baltic Business Quarterly about German- Baltic future economic relations.
Facing Environmental Impact Challenges
CEO at association INFOBALT
20
Coverstory: Renewables and the digitization of the energy system
27
Digital Energy: Kęstutis Kasakaitis, SAP about decarbonisation, decentralisation and digitalisation
34
24
TRANSPORT
Baltic Business Quarterly finds out what Baltic transport companies are doing to adress environmental issues.
DIGITAL ENERGY
44
Unplugged
BALTIC START- UPS
Competing against big names
The Ignalina Nuclear Power Plant is shut down. Big changes of the Baltic energy sector are underway.
Opportunities for clean energy startups to rapidly emerge as market leaders are huge and the Baltic states already have some very good examples.
Major Energy Players: Baltic Energy transformation and the new market trends
52
56 Trade fairs 60 Law&Tax: Being
accountable under GDPR
BUSINESS LOCATION
Estonia’s smart city
Tartu combines academic tradition with youthful student energy.
62 Event Reports 70 AHK Members: Who’ s new in AHK’ s Baltic network?
72
78
80
Travel: Atomic attraction. Lithuania has become a new destination for nuclear tourism Food: Vegan Hot Spots in the Baltics.The number of vegan restaurants in Estonia, Latvia and Lithuania is growing exponentially. Shooting Star: Raimundas Slavinskas, CEO of Aedilis
Spring 2020
28
INTERVIEW
“We are the only and the biggest biomass exchange in Europe” Andrius Smaliukas, CEO of Baltpool about how to trade biomass like electricity.
76
CULTURE
Out of the ordinary
Lesser known places in the Baltics with collection devoted to the weird, macabre or absurd.
Spring 2020
BUSINESS IN PICTURE | 5
Photo: Office of the President of Estonia
Photo: Baltic Connector
THE FIRST DIGITAL SIGNATURE IN ANTARCTICA Estonia is a digital nation – and President Kersti Kaljulaid once more proved it. The Estonian head of state has given the first ever digital signature in Antarctica while joining an expedition celebrating the 200th anniversary of the continent’s discovery by the Saaremaa-born Baltic-German explorer Fabian Gottlieb von Bellingshausen. “Estonia has always been a seafaring nation, but now we are also a wellknown digital nation. For a digital society, geography doesn’t matter anymore – we can use our digital ID to do business, run the country and communicate with our loved ones wherever we are in the world”, Kaljulaid said after signing a resolution bestowing state decorations aboard the Admiral Bellingshausen at the end of January. Every Estonian holds a state-issued digital identity and can provide digital signatures by using their ID card, Mobile-ID or Smart-ID to safely identify themselves and use e-services. Non-citizens with an Estonian residency as well as e-residents can do the same. Digital signatures in Estonia are considered equal to handwritten physical signatures and are legally binding within the EU. It is estimated that using the electronic signature saves 2% of the Estonian GDP every year. AW
Spring 2020
Spring 2020
6 | BUSINESS IN PICTURE
BUSINESS IN PICTURE | 7
How to speed up the building of Rail Baltica? The pan-Baltic high-speed rail route gained most of the attention at the first meeting of the Prime Ministers of Estonia, Latvia and Lithuania in 2020 on 7 February. Following media reports about delays and conflicts of interest that raised doubts about the future of Rail Baltica, the three heads of government displayed their joint determination to move forward with the implementation of the mega-project and discussed solutions to improve its current management model. Other topics on the agenda were the synchronization of the Baltic power grid with the European continental system and the long-term budget of the European Union. Participant in the meeting were Johannes Hahn, European Commissioner for Budget and Administration (from left), Estonian Prime Minister Jüri Ratas, Latvian Prime Minister Krišjānis Kariņš and Lithuanian Prime Minister Saulius Skvernelis. AW
Spring 2020
Spring 2020
Photo: Alexander Welscher Photo: Continental
KEEPING RAIL BALTICA ON TRACK
8 | BUSINESS IN PICTURE
BUSINESS IN PICTURE | 9
Photo: Klaipedos Port
REHAU EXPANDS PRODUCTION BY ENTERING KLAIPEDA In February, REHAU, a family-owned German polymer specialist with an annual revenue exceeding €3.5 billion and a long-time AHK member, announced its decision to develop a modern microduct system manufacturing plant in the Klaipeda Free Economic Zone, Lithuania. The company is set to employ 55 specialists – engineers, mechanics and administrative personnel – in the initial stage. The new production unit in Klaipeda will be part of REHAU’s Building Solutions division, which manufactures a range of polymer products including piping, fittings and polymer solutions for telecommunications. The output from REHAU’s Klaipeda unit will mainly go to wholesalers, telecommunications companies, and municipalities in countries across Europe. In fact, the Klaipeda Free Economic Zone is the largest and oldest one in Lithuania: its investors generate more than €1.2 billion in revenue yearly, which amounts to nearly 3% of Lithuania’s GDP. LM
Spring 2020
Spring 2020
10 | C O M M E N T
by KRISTAPS GREIDĀNS ADVEN LATVIA BUSINESS DEVELOPER
in
the last decade, technology innovation has significantly changed most industries, including energy. Those technologies are set to make energy systems around the world more intelligent, efficient, connected, reliable and sustainable. Now, the Baltic states and all of Europe are facing great challenges, where digitization, robotics, artificial intelligence, virtual reality and even blockchain play a major role. The industry has come to a point where it is no longer enough to simply follow trends; it has become a question of being better than the competition, so automated energy production is inevitable. Robots are continuously replacing humans at tasks that require extreme precision or if the work environment is too dangerous for a human being. However, this does not mean that humans are no longer needed at all. On the contrary – for specialists in the field, these robots will be and are becoming advanced tools that make their jobs significantly easier. Human presence will handle the management part of things, while robotics does the heavy lifting. Digitization does not mean that heavy tasks are just performed by robots. It also includes the involvement of artificial
Spring 2020
intelligence for handling data-heavy tasks way better than a human being. By being able to handle data a lot faster, robots can also make better decisions more quickly. Digital systems in the future will determine who needs energy, when they need it, and be able to deliver it more cost-effectively without the direct involvement of humans. Also, many concerns regarding safety are now being tackled by digital solutions. In many districts in Finland, for example, the heating and industrial energy production sites have a system whereby a real-time connection enables the control room operator in Helsinki to immediately look into an alarm that reaches the control system, as well as view the information that comes along with it and tackle it accordingly. In many cases, this is done without leaving a control room that is hundreds of kilometres away from the actual production site. Not only that, it also changes the markets of businesses and employment. New business models are emerging, while some century-old solutions may be on their way out. For example, already today in Latvia there are municipalities that choose to offer their residents energy that has been outsourced. Today, such models exist in the Latvian cities of Valmiera and Cēsis. The Latvian energy market already has access to technology that allows people to make better, more precise and faster key decisions, all from the comfort of their
Since technology can do specific tasks faster, more precisely and without stopping no matter the time of day, the underqualified, ordinary working man is at risk of losing a job. Technology does not get sick or tired, unlike human beings. The average security guards, mechanics and caretakers are the ones at risk because their jobs do not require specialist knowledge. The possibility of these positions losing their significance is visible today, and this leads to the assumption that such people need to be flexible and possibly go back to learning centres and re-qualify for new and more demanding positions. However, even if you hold a higher position, you are not out of the water yet, because technology advances rapidly. Once you become a professional at something, you cannot continue doing things the way you have been doing them forever, without expecting to learn new things and become better. The market is advancing so fast that it is simply not enough to understand your field well, it is also important to understand other fields that are connected to your work, such as IT. There is great strength and value in human qualities like leadership, compassion, creativity and setting priorities – all things that artificial intelligence has yet to tackle. In other words, employees must now grasp that learning does not end with university. In fact, the real learning process begins at the workplace. Leading companies often adapt to circumstances a lot faster than universities.
Publicity photo
Digitization in the energy sector: trends and challenges
own home. Some of the main advantages of such technology include resource economy, energy economy, safety upgrades and time saving. Automation is closely connected to digitization. Leaders of the industry are currently using digital solutions to have an overview of the resources and energy used and recovered, effective production planning, client services and other aspects of the business. Long-term use of data eventually leads to making small, but significant changes to optimize income and be more successful in the energy business. The enhancement of such data is of critical importance and is essential in order to remain competitive over the long term.
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P E R S O N A L I T Y | 13
12 | P E R S O N A L I T Y
Federal Minister for Economic Affairs and Energy Peter Altmaier visited the Baltic States from 19-21 February. This was the first visit of a German Minister of Economics to the Baltic States- a strong signal for the strengthening of GermanBaltic economic relations. BBQ has put several questions to Minister Altmaier. by LĪVA MELBĀR ZDE
Peter Altmaier
Federal Minister for Economic Affairs and Energy
Berlin
PROFESSIONAL EXPERIENCE Since March 2018 Peter Altmaier is Federal Minister for Economic Affairs and Energy. Previous positions: 2013-2018
Head of the Federal Chancellery, Federal Minister for Special Tasks and Refugee Coordinator of the German Federal Government (since 2015)
2012-2013
Federal Minister for the Environment, Nature Conservation and Nuclear Safety
2009-2012
Chief Whip of the CDU/CSU parliamentary group
2005-2009
Parliamentary State Secretary in the Federal Ministry of the Interior
2004-2005
Parliamentary Legal Counsel of the CDU/CSU parliamentary group
2002-2003
Spokesman of the CDU/CSU parliamentary group in the First Investigation Committee
1999-2003
Delegate of the CDU/CSU parliamentary group to the European Conventions on the Charter of Fundamental Rights of the EU and on the Constitutional Treaty
1994-2004
Member of the Committee on European Affairs
1994-1998
Member of the Committee on Legal Affairs
Education and Professional Career:
Legal studies at the Saarland University (First and Second State Exam 1985 and 1988)
Certificate in European Integration studies (1986)
1985-1990
Research assistant for Public and International Law at Saarland University and later at the European Institute of the Saarland University
1990-1994
Official of the European Commission; SecretaryGeneral for the Administrative Commission on Social Security for Migrant Workers from 1993 to 1994
As of 2006 Peter Altmaier has been the President of the EuropaUnion (German branch of the Union of European Federalists) and since the end of 2011 he took over the office as Honorary President.
Our annual business survey in Europe shows that German investment in the Baltic states is lagging behind – despite better economic conditions than some other Central and Eastern European countries. What measures can be taken to raise awareness of the Baltics in Germany? German investments in the Baltic states are growing continuously and they increased by 19% last year in Lithuania, where Germany is the fourth biggest foreign investor – far ahead of other European partners like France, Spain and Great Britain. In Lithuania, German companies benefit from a continuously positive economic situation and excellent productivity rates. These are very good conditions for further expanding our business relations. For this reason, I am delighted to have been able to travel to all three of the Baltic states as the Federal Minister for Economic Affairs in order to promote the deepening of our economic ties.
Winter 2020
The Federal Ministry for Economic Affairs and Energy encourages German investment abroad with a range of measures for foreign trade promotion, aiding small and medium-sized companies in particular. The Foreign Trade-Fair Programme supports German companies’ business initiation trips and delegations when investing in neighbouring countries. This also boosts the recognition level of foreign markets among German firms. A decisive factor for investment – not only for German companies – is a good, reliable investment environment. The EU Single Market provides an incomparably good framework for this. In addition, every country’s government has to create the right conditions, of course. The 2019 AHK survey shows that this has been very successful in Estonia. From a business perspective, the country is the most attractive place to invest in
the Central and Eastern European countries. German investors are already familiar with many positive location factors, such as the outstanding developments in the field of digitization in Estonia. The network of German Chambers of Commerce Abroad (AHKs), and the GermanBaltic AHK in particular with its three locations here, makes an important contribution to the support and connection of companies. The promotion of locations by the Baltic states, among others, in Germany also makes investment locations more widely known and raises the awareness of active efforts to acquire foreign investors. The Baltic states are leaders in the IT sector. Could the Estonian e-government model also be transferred across Europe? I am convinced that we can learn very much from Estonia in matters of digitization. Naturally, we would
have to adapt it to other conditions in Germany when it comes to the actual implementation stage, but I always enjoy learning more! The EU as a whole has set a clear, ambitious target: we want to create an EU-wide, uniform, electronic gateway. By 2023, this should enable all people and companies in the EU to access administrative services by using a unique user account and only having to provide their data once. This will be implemented by an interoperable network of the various national portals. We will also need a portal network between the government and the federal states in Germany. That is an ambitious project and will only work if we guarantee interoperability across standardised IT interfaces. We still have a great deal of work to do! What does Europe’s “Green Deal” mean for the Baltic states? Will it save the climate / the world? With the Green Deal, the European Commission has announced a comprehensive programme for making Europe the world’s first climate-neutral continent by the year 2050. At the same time, I view the Green Deal as a growth strategy for Europe for using innovations and new, clean technologies to tap into growth markets and safeguard jobs. I believe that we must have the courage to continue along this path and make the most of the opportunities. We can strengthen Europe economically with new, clean technologies and maintain social cohesion. This is why we need to work even more closely in Europe in the future. New cooperation possibilities are opening up globally due to the rapidly changing world economy. Is an economic partnership between China, Germany and the Baltics conceivable? For example, with projects like the New Silk Road and the Baltics as a 5G lab? The European trade and foreign trade policy is designed to target the continued improvement of global economic conditions. Our aims are equal and fair competition all around the world, open markets and legally secure settings for business and investment. This also applies in the context of business with China. After all, China is both a partner and a competitor, and we will have to deal with that. At the moment, the EU is negotiating with China regarding an investment agreement because our aim is, of course, to improve our economic relations. This includes openly discussing and demanding the non-discriminatory treatment of European companies in China. In September 2018, the EU also discussed its connectivity strategy for the New Silk Road initiative, based on the principles of sustainability, equal opportunities, transparency and compliance with international standards. For us, these are the standards for infrastructure projects, such as the New Silk Road.
Winter 2020
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14 | B A LT I C B U S I N E S S
Shutterstock, Pixabay
High increase in airBaltic passenger numbers in January in Tallinn According to the Latvian state airline, 45,000 passengers took a direct flight from Tallinn in January. This is 37% more than in the previous year. Last year, the airline already carried 50% more passengers from Estonia than in 2018. airBaltic currently offers direct flights from Tallinn to Amsterdam, Berlin, Brussels, Copenhagen, London, Malaga, Oslo, Paris, Riga, Salzburg, Stockholm, Vienna and Vilnius. The company is about to launch direct flights from Tallinn to Rome, Zurich and Hamburg in March and to Nice in May.
Turnover and investments of the business sector increased Turnover and investment in the business sectors increased in almost all sectors of the economy in 2019, according to preliminary data from Statistics Estonia. Most growth in turnover was recorded in the trade, manufacturing and information/communication sectors. Goods and services were sold for €64.2 billion, which is about 5% more than in 2018 (labour cost increases included). In addition, companies invested about a fifth more than in the previous year, mainly in machinery and equipment as well as in buildings.
Spring 2020
Estonia is the most popular destination for the UK’s Generation Y According to a study by the British company Comparethemarket.com, Estonia is the most popular destination for the generation born between the early 1980s and the late 1990s. The travel report shows that millennials in the UK – travellers aged between 25 and 34 – travel to Estonia 91% more often than any other age group. Romania is the second most popular destination for UK millennials and Lithuania is third. In 2019, around 33,131 Generation Y Brits visited Estonia.
Latvenergo Group posts €92 million in unaudited profit in 2019 Power utility Latvenergo posted €92 million in profit before tax in 2019, around €16 million more than the year before. Latvenergo Group’s revenue also increased last year, from €838,8 million in 2018 to €841,6 million in 2018. They generated 4,880 GWh of electricity and 1,842 GWh of thermal energy in 2019. For the second year in a row, combined heat and power plants generated historically the largest amount of electricity, which is 5% more than in 2018.
Impending plastic tax for Estonia Estonia’s contribution to the European Union’s common budget could begin as early as next year. This means that for every kilogram of plastic waste that ends up in an oven or a garbage dump, the country has to pay 80 cents to the EU. The proposal to make the country’s contribution to the EU budget dependent on waste collection is being discussed in Brussels. As Estonia has several tonnes of plastic waste, this could mean dozens of extra payments. According to Sigrid Soomlaid, head of the Department of Environmental Management at the Ministry of the Environment, there were over 65,000 tonnes of plastic waste in 2017, of which only 27% was recycled, and according to this indicator Estonia is one of the least developed countries in Europe.
S&P increases Latvia’s credit rating to highest ever level The international rating agency S&P Global Ratings has raised Latvia’s credit rating from A to A+, with a stable future outlook, what is Latvia’s highest ever ratings level. It’s anticipated that Latvia’s debt ratio is projected to decline to around 27% of gross domestic product by 2023. The strong economic growth over the years and very favorable macroeconomic conditions, as well as Latvia’s political efforts to control expenditure, have supported fiscal consolidation.
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16 | B A LT I C B U S I N E S S
Riga Airport ranked 3rd fastest-growing airport in European capital cities In 2019 Riga International Airport (RIX) was the third fastgrowing airport in European capital cities. The number of passangers at RIX rose 10,5% last year, which is the third strongest growth after Vienna Airport and Milan Malpensa Airport. Riga Airport’s growth was more than twice as fast as on average in Europe and the passenger numbers grew by 3,3% on year. Latvian transport Minister Tālis Linkaits indicated that the Latvian aviation sector can be more ambitious and become stronger not only in the region but also in the European context.
Five cities in Lithuania have the chance to further invest in electric buses
Green Genius expands into Hungary and Romania
The Lithuanian authority is considering investing another €30 million in the purchase of electric buses for the cities of Kaunas, Klaipeda, Panevezys and Šiauliai to reduce traffic noise and pollution. In 2018 and 2019, around €22.9 million were already spent on the purchase of environmentally-friendly city buses from abroad. The city of Klaipėda has already bought the first Lithuanian-made electric “Dancer” bus from Vejo Projektai, a company owned by Lithuanian and German investors.
The Lithuanian renewable energy company plans to invest over €300 million in solar energy projects in Hungary and Romania. The company is part of the Modus Group owned by Lithuanian businessman Kestutis Martinkenaus. The total capacity of projects that the company plans to implement in the new markets will exceed 450 MW, with the first projects to be implemented next year, the company said. With the expansion to Romania and Hungary, the company is already present in eight countries and is currently developing renewable solar and biogas projects in Lithuania, Poland, Belarus, Ukraine, Italy and Spain.
Latvia ranks second in EU by use of renewable energy
Spring 2020
Preparation for the IPO of the Ignitis Group
Shutterstock, Pixabay
In 2018 renewable energy accounted for 21% of all energy used in the EU for heating and cooling, up from 12% in 2004 . The growth has been achieved through an increasing use of renewable energy in production, services provision and households. Latvia is ranked second with 56%, just behind Sweden with 65%. Finland came third with 55% and Estonia fourth with 54% of all energy expended on heating and cooling generated from renewable sources.
After detailed examination, a working group appointed by the Lithuanian Ministry of Finance recommends preparing the Ignitis Group for an IPO. According to the Minister of Finance, Vilius Sapoka, this solution is the most sensible option, as the Ignitis Group needs an investment of around €5 billion by 2030 and an IPO would be the most effective way to do so. The Minister of Finance added that “the Ministry of Finance will initiate (the process) and present all the necessary documents to the government in the near future so that we can start”. The working group recommends offering between 25% and 33.33% of the Ignitis Group’s shares through an IPO
Plastic deposit system in Lithuania has proved enormously successful Since February 2016, Lithuania has had a “deposit return system” to encourage consumers to return their used plastic bottles for recycling. When purchasing eligible beverage containers, consumers are charged a deposit of €0.10, which is refunded when the empty container is returned for recycling. By the end of 2016, 99.8% of the Lithuanian public were already familiar with the deposit system, 89% had used it at least once and 58% of consumers said they recycled more often. Before the deposit system, only one third of all beverage containers in Lithuania were returned. By the end of 2017, however, the return rate increased to 91.9%.
Spring 2020
MY OFFICE | 19
18 | MY OFFICE
Photo: Augis Narmontas
MINDAUGAS UBARTAS
C E O A T A S S O C I A T I O N I N F O B A LT
This notebook is sustainable. It may be possible to do the same job on a tablet, but the feeling with this notebook is like with paper. It is synchronized to my computer and my phone. And I can also sign a contract using this device: I import a PDF via a computer, sign it and send it immediately. I also use this notebook for reading e-books, which I enjoy doing while travelling.
I usually stand in my office. Standing at your desk is good for your health and is the equivalent of running two marathons per year.
This is a tracking device for trucks and lorries, also installed in Scania, Volvo and Mercedes trucks. Using this device, the owner of the company can see where his trucks are, their speed and their fuel consumption. With this information, the company can manage its fleet more easily and it also helps the drivers to drive more responsibly – both from the safety and the fuel consumption perspectives.
This is GSM alarm system, produced by our member. I collect the devices from our members to show that Lithuania is not only a country of agriculture but also produces quite a lot high-tech devices.
INFOBALT is an association for IT and communication companies in Lithuania and we have 170 members. We create a community for them, raising awareness for the IT and communication products which are available in the market for local and international businesses. We work to expand the commercial potential of our members. Our job also involves lobbying activities in the government. There are 7 employees here but we are organized into several interest groups, such as Industry 4.0, artificial intelligence, market condition improvement and education. Our employees manage these groups. These days, the importance of the CEO in a modern company is not characterised by his office, but by his personality and knowledge. When you enter these old, huge corporations, you usually feel really small. Like churches, they are built so big in order to show that human beings are just a small part of the universe. But that’s not how we think and act in our association.
This one is the alarm for motorbikes. You hide it somewhere in your motorbike. If you are close to your bike, it doesn’t work but if you at a distance from it and your bike moves, you get an alarm to your handset together with GPS coordinates to show you where the bike is.
It’s a sonar for fishing. When you come to your fishing spot, you throw it into the water and see what kind of fish is there on your handset. You charge it, put it in your pocket, come to the lake, then hook it and see what kind of fish you can catch today.
Spring 2020
D I G I TA L E N E RG Y | 21
20 | D I G I TA L E N E RG Y
Renewables and the digitization of the energy system
Digitization can prepare the markets for renewables and distributed energy production, and conversely, also make these resources fit for the market Enefit Green Paldiski wind farm
by ALE X ANDER WEL SCHER
Technological innovation, cost efficiencies and increasing consumer demand are driving the transition towards renewable energy in the Baltics. This leads to new challenges for the energy system. Digital innovations can help to relieve some of the stress on the grid and optimize performance.
P
ower will still come from a socket for another 20 or 30 years in the Baltic states. However, what happens in front of and behind it will change fundamentally. Estonia, Latvia and Lithuania are to transform their energy systems into a more sustainable, renewables-based system, away from large-scale fossiland fuel-based energy production. Due to the increased use of domestic “green” energy, the power supply is becoming more decentralised. This calls for more flexibility in the energy system and changes in the way electricity networks are built and operated. Digitization can prepare the markets for renewables and distributed energy production, and conversely, also make these resources fit for the market.
Spring 2020
Photo: Eesti Energia
“A green transformation cannot take place without a digital transformation,” said Estonian Prime Minister Jüri Ratas after a gettogether with European Commission President Ursula von der Leyen
Spring 2020
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in February in Brussels. In their meeting, they discussed the European Green Deal – the EU’s ambitous plan to achieve climate neutrality by 2050. To achieve this aim, the Green Deal sets a path for an energy and economy-wide transition to massively reduce the bloc’s carbonintensive activities and therefore its contribution to global warming. Among the presented series of actions is the shift to climate-friendly energy production, and this is also a prevailing topic in the Baltics. In Estonia, Latvia and Lithuania, oil and natural gas have long been the dominant fuels. However, high energy prices and a political desire to reduce import dependency have prompted a on-going move towards local resources. The installed capacity of power plants based on renewable energy sources has significantly increased in recent years in the three countries. Growth has been particularly strong for biomass and biogas plants. Several small hydropower plants and wind farms have also been put into operation, while solar energy is still rarely used for electricity or heat generation.
Falling costs for using renewables open door to more growth The main driver for the use of renewables – besides the primary rationale of reducing CO2 emissions to mitigate climate change – has been the steady decline in costs of installation and maintenance that was long an important stumbling block to mass adoption. Renewable energy projects had experienced their share of problems as initial investments were huge and challenges such as hooking up the power stations to the grids resulted in temporary setbacks. Now, renewables are cost-competitive
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with fossil fuels and are most frequently the cheapest source of energy generation, according to a report by the International Renewable Energy Agency (IRENA) published in May 2019. The cost reductions, particularly for solar and wind power technologies, will continue into the next decades. Measured by their levelized cost of energy (LCOE) generation, wind and solar power are set to become the cheapest option for new generation investments in the Baltics in the short term, according to a scenario-based energy system analysis published by the Nordic Council of Ministers in 2018. Local energy experts agree that there are good wind and solar energy resources in the Baltics which, to a large extent, could already be explored by using existing techniques and networks. Tapping into the Baltics’ wind potential, several projects are in the pipeline in Estonia and Latvia that imply not only bigger wind parks and turbines but also a joint offshore wind farm in the Gulf of Riga, aimed at contributing to electricity grid security in both countries. In Lithuania, the wind power output hit an all-time record in 2019 and a boom in the construction of new turbines is expected between 2021 and 2023 by the Lithuanian Wind Power Association. At the beginning of this year, the first investment in a wind farm without state support was announced, hailed as a “breaking point in Lithuania’s renewable energy” by Energy Minister Žygimantas Vaičiūnas. Energy companies in all three countries have launched new businesses to help residents and enterprises to install solar power systems that can be connected to the grid and feed in unused power. Large-scale solar panel rooftop
RENEWABLES IN THE BALTICS In general, the natural conditions in the Baltic states are favourable for the widespread use of renewables. The main potential lies in generating energy from biomass and biogas because of the large share of land used for agriculture and forestry. Other promising options to increase renewable energy production include heat pumps for buildings and district heating, while waste and by-product incineration also offer sufficient potential for generating green energy. The same is true for wind and solar power as well as geothermal energy, as scientific reports and studies have shown. The transition to renewables in the Baltics is being supported and encouraged by funding and incentive programs, as well as by feed-in tariffs. However, the lack of political support and nontransparent market conditions for renewable energies are often criticized in all three countries. For many years now, there has been constant tinkering with the funding instruments and the legal framework. Industry representatives are therefore critical of the lack of clear, long-term investment and planning security.
installations have started operations atop commercial buildings and industrial facilities. In Salaspils near Riga, the sun will now even provide most of the energy for heating water during warm months after the town’s municipal district heating company installed one of the largest solarpowered centralized heating systems in Europe. In another ambitious project, the Lithuanian state-owned enterprise Ignitis Gamyba has partnered with scientists from Kaunas
University of Technology (KTU) to construct an experimental floating photovoltaic power plant at the Kruonis hydroelectric facility – the first of its kind in the Baltic region.
New market roles, challenges and mechanisms Given the combination of low prices and zero emissions, future growth in both industries can be predicted. This will elevate the economic importance of renewable energy but, at the same time, add new levels of complexity to the power and utilities business since market mechanisms and the way participants interact are about to fundamentally change. “We are moving away from the traditional centralized energy production in power stations to decentralized networks with multiple sources of energy that are connected by smart grids and powered by digital solutions. There is a whole business eco-system coming together with this change while the long-standing monopoly model is fading away,” says Kęstutis Kasakaitis, an expert at the German software firm SAP, of the shift within the industry. Driven is this trend also by other development, such the trends toward electric vehicles, shared mobility and smart cities. While the transition to renewables has long been led by energy developers and power generating companies, consumers themselves are also now looking for ways to make use of alternative technologies and solutions. More and more people generate and store electricity and heat in their own homes, for example with photovoltaic systems, cogeneration plants, heat pumps and solar batteries. This puts an end to the old dichotomy between producers and consumers of electricity and heat. Instead, there
are now so-called prosumers who can do both and take on an increasingly active role on the energy market. However, this comes with new challenges and different approaches are needed to ensure that supply and demand can be balanced flexibly and cost-effectively. One of the strains is the variable nature of renewable energy sources. The sun does not always shine, the wind blows strong and weak at times – and that makes it difficult to ensure that there is enough energy to go around for top demand. Right now, such drastic supply swings have been compensated for through traditional coal, gas and nuclear power producers. Sooner or later, however, the renewable energy sources will assume ever more importance.
Smart solutions for the energy transition Energy firms have already been pushing forward with smart grids in order to make better use of the expanding, widely strewn renewable energy source. In line with EU regulations, intelligent measuring systems have been installed in many houses across the Baltics, enabling the utilities to get a detailed insight into consumer behaviour and patterns. While in Estonia already 100% of the consumers have a smart meter for electricity and access to an energy metering data sharing plattfom, the grid operators in Latvia and Lithuania are planning to complete their roll-out in the upcoming years. Smart home systems also enable consumers to monitor and regulate their own energy consumption. Automated solutions let them remotely control and use items around the house more flexibly with the help of smart devices. This
will include the lights, temperature, a heating system, air quality, ventilation, the indoor climate, locks and security surveillance. A survey conducted by mobile operator Tele2 and market researcher Norstat in 2019 in Latvia showed that there is much interest in these solutions: Almost a quarter of the respondents would like to get heating control systems or have smart sockets installed in their houses. However, the adoption rate is still low. “In Latvia, compared to the US or Western European countries, smart technologies are entering households very gradually. This is due to various prejudices about the functionality of such devices and the level of trust in technology, as well as the fact that some smart devices do not yet recognize the Latvian language,” explains Tele2 retail director Dace Škrabe. The situation in Estonia and Latvia is estimated to be similar and also limited by the often missing local language options for smart devices. In addition, the demand throughout the Baltics is further hampered by the low purchasing power of the population, according to a Tele2 spokesperson. Smart meters, smart appliances, and smart grids are all available, but just to roll out and employ these technologies is not enough. What needs to be done is to make sure that they are interconnected and interact in an intelligent way to be able to integrate more power from renewables, according to technology and market experts. Only then can the markets for power and heat be more market-based, and provide for greater flexibility within the entire energy system. At the same time, cybersecurity will become one of the major aspects. Increased digitization and integration of electricity grids make energy systems more vulnerable and also raise new security and privacy risks.
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Unplugged
The decommissioned Ignalina nuclear power station in Visaginas
by ALE X ANDER WEL SCHER
Ten years ago, the Ignalina Nuclear Power Plant in Lithuania was shut down forever. The forced phase-out of the only atomic power station in the Baltics led to a fundamental transformation of the energy sector. Further big changes are underway, but by no means completed yet.
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Switching off the ageing Sovietera reactor dramatically changed the power generation landscape in the Baltics, with the region looking for new sources and ways to secure their energy supply ever since. “It had quite a negative impact on our energy balance. Instead of being an exporter, we became an importer. It also brought some negative consequences to the energy price – the average electricity price increased by almost 30%”, Lithuanian President Gintanas Nauseda recalls the implications of
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the planned nuclear phase-out for his country. On a positive note, he also referred to the shutdown as “a huge trigger to stimulate the development of our renewable energy”.
Electricity shortfall and energy dependence Ignalina used to supply 80% of Lithuania’s electricity and also exported power to Estonia and Latvia, covering almost 40% of the overall consumption of the Baltic countries. However, as important as the power plant was for the region’s energy supplies, its hefty 1,500-megawatt reactors caused safety concerns, especially in Western European countries. Fears centred on the reactor design that was of a similar type to those at the infamous Chernobyl reactor in Ukraine which melted down in 1986, causing the world’s worst nuclear accident to date. Brussels thus demanded Ignalina be shut down because it was deemed unsafe. The first reactor was taken offline on December 31, 2004, the second on December 31, 2009. The end of Ignalina caused mixed emotions. Not least because it meant that the whole region had to rely on alternative sources of energy. Lithuania had to increase the output of its conventional power stations and also raise the amount
Synchronization of the Baltic power grid with Europe of energy it imports from other countries – including Russia. Almost 20 years after breaking away from the Soviet Union, the three Baltic states were again heavily dependent on Moscow due to a lack of other connections and suppliers. The increased reliance on the powerful neighbour as the primary energy supplier left many with a sense of unease – energy policy is still understood as a question of national security in Vilnius. The same is true for Tallinn and Riga where energy issues in the past have also risen to the top of the political agenda and still have a significant impact on bilateral relations.
Going past monopoly and the status as “energy islands” Lithuania even lobbied for Ignalina to be granted an extension to its lifespan but was rebuffed by
Photo: Alexander Welscher
the midst of a scenic forest area nestled in the north-eastern tip of Lithuania, close to both the Belarusian and Latvian borders, the silhouettes of two washed-out redand-white striped smokestacks poke into the sky. Visible already from afar at the end of a single road, they tower up from hulking structures that were part of the only nuclear power plant in the Baltic states: Ignalina. The huge atomic station was Lithuania’s most important power source, but had to be closed for good ten years ago. Fulfilling a commitment that Lithuania gave when it joined the European Union, the plant ultimately went offline at the end of 2009 – long ahead of the date that its builders had envisaged. Since then, the power plant has not generated any more electricity.
Another new zone of competition was enabled by the recent completion of the Estonian-Finnish gas link called Balticconnector. The bi-directional pipeline connects both countries’ grids and provides Finland with access to Latvia’s natural gas storage in Inčukalns, making way for a threecountry marketplace for natural gas. The united system encompasses a common tariff zone that allows cross-border trading at a single rate with no extra charges beyond pipeline and storage costs. However, the connection and common market will do little to end Gazprom’s prevailing dominance in the region before the Poland-Lithuanian gas link is ready for operation at the end of 2021. Not to mention that the negotiations on the possible accession of Lithuania to its Northern neighbours’ joint market are still on-going.
the European Union. Policymakers in Vilnius thus agreed to shut the plant down – grudgingly and without much preparation. To smooth out the transition and not throw the Baltics into perpetual darkness, Brussels pledged to largely finance the cost of decommissioning. The EU commission promised help with the connection to the European energy networks and came up with the so-called Baltic energy market interconnection plan (BEMIP) that was designed to end the Baltic states’ status as “energy islands” within the European Union by building links to other EU members. Interconnections were increased with Estlink 1 and 2 lines between Estonia and Finland, the LitPol Link line between Lithuania and Poland and the Nordbalt line between Sweden and Lithuania. This reduced the dependency on Moscow, which for a long time also used its economic leverage to exert political pressure.
A liquefied gas terminal that went into operation in 2015 in Klaipeda has also shifted the balance of power. The floating storage regasification unit – aptly named “Independence” – broke the monopoly of Russia’s state-owned gas company Gazprom over gas supplies to the Baltic states It can serve as an alternative to the natural gas supply by pipeline from Russia. Boasting 4 LNG storage tanks of a total capacity of 170,000 cubic metres, the facility can theoretically cover all of Lithuania’s gas needs and help to supply its Baltic neighbours. Initially, it imported mainly Norwegian LNG for mostly domestic consumption, but began to diversify in late 2017 with the import of its first US cargo. Since then, the gas transmission of Lithuania to the Baltic states has increased manifold and, with almost 6 TWh in 2019, reached the highest ever-recorded amount of gas to the Baltic states.
Similarly, the Baltic power grids are still part of the BRELL ring that operates synchronously with the Russian and Belarusian systems, and remain dependent on the control centre in Moscow. But this will change by 2025 when the Baltic states are to be fully connected to the rest of Europe via Poland and integrated into the continental European network. In mid-2019, the governments of the four countries and the European Commission approved a political roadmap and work schedule for the synchronization. To ensure a smooth disconnection, Brussels will be involved in negotiations with Moscow, which has already expressed its discontent and claimed the move would be very unwise economically and might cost billions. The price tag is indeed high: the total value of the Baltic synchronization project is €1.6 billion, according to the Lithuanian Ministry of Energy
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Nothing was heard anymore by the presidential trio about the construction of an Ignalina replacement facility to serve the whole region. Lithuania, Latvia, Estonia and Poland have long been holding talks about building a new plant together at the site of the previous nuclear station. However, the initiative stalled due to domestic
by ALE X ANDER WEL SCHER
political disputes in Lithuania and a lack of binding agreements among the potential partners. Blighted by delays and indecision for years, it is more than unclear whether the project – which was also rejected in a non-binding referendum held alongside the parliamentary elections in 2012 – will ever be revived.
Lithuania stood in for its ‘sister’ in Chernobyl and now has become an off-beat tourist attraction since the show aired last year. Due to the high interest in visiting the plant, Ignalina had to increase its visitor capacity and attract additional tour guides to cope with the demand from Europe and beyond.
Atomic legacy
Still, most of the 1,800 people working at the power plant are dealing with the dismantling of the reactors – a process expected to take 30 years. Nearly 40% of the cleanup work has been completed. About a third of the nuclear waste held at the facility has been processed and taken away over the last decade, and 70% of spent nuclear fuel has been loaded into special storage. “We are definitely on schedule, ahead of it in some respects”, Energy Minister Žygimantas Vaičiūnas told the Lithuanian public broadcaster LRT at the turn of last year. “The decommissioning will be completed in 2038, when a green meadow will be all that remains in the 80-hectare territory.”
Meanwhile, work will continue on dismantling Ignalina, which served as a filming location for the highly-rated HBO mini-series Chernobyl, a dramatization of the 1986 nuclear disaster. In the episodic TV drama, the defunct plant in
Finland
New Baltic energy market interconnections
Inkoo
Sweden
2007 Estlink # 1 350 MW DC
2015
To Europe II
2014 Estlink # 2 650 MW DC
Balticconnector
Denmark
NordBalt 700 MW DC
Kersalu
Estonia
Incukalns UGS
Latvia
Blåbjerg
Lithuania 2025 Harmony Link 700 MW DC
Baltic Pipe Project
Goleniów
Gustorzyn
Poland
• Gas infrastructure in the region • Electricity interconnections
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Sources: AST, Amber Grid, Baltic Connector, Interfax
Ignalina’s red-and-white striped smokestacks will then no longer be visible. However, the atomic legacy of the plant will still be there and it appears to be more durable. There still is some controversy on the final destination of the radioactive waste which can only be kept in the interim storage for 50 years.
Photo: Alexander Welscher
”We will do whatever it takes to make this process smoother and more effective”, Lithuanian President Gitanas Nauseda emphasized after a meeting of the three Baltic heads of state in Riga in mid-December. His colleagues Kersti Kaljulaid (Estonia) and Egils Levits (Latvia) also reaffirmed their support for the technically complex and daunting project which has led to internal disputes on the synchronization scenario in the past. Now, the synchronization should also contribute to green energy policies that drive the three countries towards climate neutrality and become regionally independent electricity producers in a CO2-neutral way, the presidents emphasized.
Decarbonisation, decentralisation and digitalisation Kęstutis Kasakaitis does not have a crystal ball to tell what is ahead of us in the energy sector. Nevertheless, Lithuanian representative of the leading German software company SAP is closely analysing new developments and trends in the energy sector and how they will affect the Baltic markets. In a short interview with Baltic Business Quarterly, Kasakaitis shares his insights.
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hich trends do you currently see in the energy sector? From a global perspective there are several main trends – a shift towards renewable energy and transition into low carbon, more sustainable economy. This has and will be further affecting the energy sector with fundamental changes in its markets. However, despite significant challenges a new course of action is being supported by the public opinion as well as political and economic players,and the society itself is becoming more demanding. Are you referring to Greta Thunberg’s zeitgeist? Not only. This shift of mind-set was evident in the recent World Economic Forum where for the first time environmental topics such as climate change and global emissions took over the main stage from economical discussions. The European Union has a big agenda for decarbonisation and investment into
renewable energy sources. The Green Deal is yet another strong position and push from the governments. Europe is aiming to become carbon neutral by 2050 – this is an ambitious goal and can only be achieved with a profound investment plan. In which areas investments are needed? The energy transition will bring opportunities to further invest into
renewable sources digitalization of energy consumption as well as new business models that will be offered to final consumers who themselves start having a much more active role in the market. We are moving away from the traditional centralized energy production in power stations to decentralized networks with multiple sources of energy that are connected by smart grids and powered by digital solutions. There is a whole business eco-system coming together with this change while the longstanding monopoly model is fading away. What effect will this have on the markets? Overall, the energy markets are evolving and becoming much more interconnected. This needs to be orchestrated by an entirely new ecosystem that strongly relies on IT, to make sure that all elements are operational and linked to one big network and no information is lost along the way. Therefore the technological base is becoming critical and cybersecurity is a major aspect of it. The openness, cross-docking and exchanging of energy sources make the grid infrastructure more vulnerable, also due to our increasing dependency on energy data. Are these topics also on the agenda in the Baltics? Definitely. The energy transition is now very present in Europe and particularly in the Baltic States. Being smaller countries allows us to adapt even easier and quicker. We are turning fast in those new directions and the speed that the major Baltic energy companies have been demonstrating is impressive.
WHAT SAP IS DOING IN THE ENERGY SECTOR For decades SAP has been developing the software that helps its customers keep track of their entire business processes and use this data for their decision making process. Applying solutions of the German software leader, electricity and other utility providers around the world are maintaining their grids, monitoring access and consumption data, running the end-to-end business process from a settlement of a new connection to customer care. “In the energy sector, SAP is considered to be the industry standard for utilities. We are not yet very strongly positioned in the Baltics but we want to change this,” says Kestutis Kasakaitis. “We are coming with the knowledge and expertise of serving the 91% of the Top Forbes Global 2000 Utilities that runs SAP solutionsin the cloud or on their own premise. Latest SAP solutions enable energy utilities to develop new energy related services based on the data collected from smart home devices, intelligent meters, distributed energy sources, weather maps, as well as consumer behavior.”
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“We are the only and the biggest biomass exchange in Europe” Exchanges rank among the most effective marketplaces, and this holds true in the energy sector as well. In Lithuania, the trading of biomass products is organized on the Baltpool energy exchange – the first of its kind and the number one platform in Europe. Baltic Business Quarterly talked to the man who is driving the development of Baltpool and contributed to the fully-functioning biomass market in Lithuania – a conversation about green deals, big plans and an unusually warm winter. by ALE X ANDER WEL SCHER
How can one trade over the exchange? In our case, you just have to register and you can already trade without major collaterals. There is also no need for trade terminals, training
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What are the benefits of using the trading system? The main advantage is that it is easy to trade via the biomass exchange. You just make one click and then you can place the order – and that is all. You immediately get the specifications of the standardized product and all the technical parameters – you know what products are available in what quantities, and you have standardized contract terms that are the same for every buyer and seller. This makes the whole process very efficient, transparent and reliable. This means that you can put all your efforts into what matters most – the price. How much time or costs can biomass traders save on Baltpool? It is difficult to quantify and make generalisations, but at the end
How much do the prices of other energy exchanges such as Nord Pool affect your business? Basically, the products traded on the different energy exchanges are not related in the price. However, there are graphs that show that they are similar. But not with electricity – I am talking more about gas. We occasionally compare the prices of gas and biomass. In general, of course, the price of biomass is much lower, but when we had high price in the biomass sector, we also had high prices in natural gas. When we have low prices in the biomass sector and check the price in the gas exchange – it is also low. So theoretically they are not related but practically they often in the same direction. This is also true of this winter. How much are the prices affected by the unusually warm temperatures? This year, the winter is indeed very warm. So you need less energy – the demand for biomass went down, the trading prices are lower and the turnover on the exchange has decreased. For the general population, this situation in the market is favourable – heating expenses are becoming increasingly affordable due to the low prices for
ANDRIUS SMALIUKAS Age: 35 Position: CEO Baltpool biomass exchange Experience: 12 years of experience in the financial sector and regulated markets Education: Master’s degree in Law and Economics, Vilnius University, Lithuania Family: Wife, daughter and son
Photo: Arina Solntzeff
the
name Baltpool has similarities to the power exchange Nord Pool. Does it also work in a similar way? The way trading takes place on our exchange is indeed very similar to what Nord Pool is doing in the electricity market. We are basically doing the same for biomass and thus often promote Baltpool with the slogan ‘trading biomass like electricity’, because almost everyone knows Nord pool. At the same time, however, the biomass market is nothing like as complicated as electricity – you do not need to have an army of data analysts looking for different directions and developments in related markets. Wood chips and wood pellets are physical goods and are therefore much easier to trade.
or the like, as on other financial or energy exchanges. Baltpool is an online platform – you just need an internet connection and web browser. We are also trying to keep our trading system as simple as possible. Everything should be clear from the user interface and without big manuals – and also be accessible for small market participants.
everything comes down to the price. And here we see clearly that, since the beginning, prices on Baltpool have mostly been lower than for transactions outside the exchange. This was especially visible some years ago, when around half of the transactions in the market were conducted on and the other half off the exchange. Our average price was then 20% lower. Since then, the difference in prices has shrunk largely due to the fact that more than 90% of the trade in Lithuania is now done via Baltpool. But we also see this effect in other markets that we have entered recently.
both biomass and gas. We also see that the activities on the spot market are much less intensive because many district heating supply companies have concluded long-term contracts to purchase biomass. Due to the warm weather, there have not been so many demand peaks this winter which would have to be balanced by short-term transactions. Is this spot market similar to the one on financial stock exchanges? In a way, yes. On our exchange, we have four different contract durations. The weekly contract is the shortest, then monthly, quarterly and half-year. 40% of all contracts are closed on a weekly basis – so we consider this the spot market. The other 60% is basically base load – biomass that is contracted for a longer period. This can be explained by the structure of the market participants. Our main clients are municipal utilities and power plant operators that produce electricity or heat, and supply to customers. For them, the main thing is security of supply – this is often even more important than the price.
Who are your biggest competitors? Basically we do have not any competition except for bilateral trading – that is negotiations and direct contracts between buyers and sellers. Otherwise there is no other biomass exchange at the moment. There used to be one in 2012 in the Netherlands, but they closed when we started our operations. Now, we are the only and the biggest biomass exchange in Europe. And we can proudly say that it works. We have had a successful run for many years and are expanding into other countries. What do you attribute this to? We think the biggest obstacle and issue in creating a biomass exchange is the market structure. Unlike in the gas or electricity market, there is no transmission system operator that ensures the quality and delivery of the product, so that you can build a trading platform around these basic parameters. You have to establish quality standards and a way of measuring them on your own. As an example: In the market, there were no standard products for wood
chips. So we made our own product specification for these products. The same goes for the physical delivery and the related logistical aspects. We have solved these issues and included transportation costs in our electronic trading system. Others would need to come up with their own approach or similar solutions. This is not so easy. The agenda for the energy industry is currently increasingly set by climate change and the move to a low carbon economy. Do you consider Baltpool as an enabler of a green shift? Yes. We see that we are making things easier. We have created an open market for biomass with fair trading rules. So we contribute to this energy transition to renewable sources that can take place with the trust of our society. Basically, everyone can enter the market and be part of that change. We believe in that. And we are happy that we hear the same from our suppliers. They say: We changed from natural gas to biomass in heating just because it was an open market.
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Where do see you the biggest opportunities? We believe that the biomass trade in the direction from the Baltics towards Western European countries
will just become more active and intensive. Most of the countries will sooner or later need to convert to renewable energy sources, but many countries do not have their own biomass resources. So these countries need to source somewhere else. There are various locations, but one of the best places to do so is right here – in the Baltics. This will also offer us opportunities to expand, introduce our expertise and establish biomass trade platforms there. We see this in Denmark, where we launched operations with a local partner. The biomass market there is expected to grow quite a lot in the near future – and the Baltic countries are among the key suppliers. Lithuania, Latvia and Estonia are about to get more connected to the rest of Europe by new gas and electricity interconnections, and they are also moving towards a common Baltic energy market. Do you benefit from this? In general, the more liberalized other markets are, the easier it will
SWITCHING FROM GAS TO BIOMASS: THE LITHUANIAN SUCCESS STORY
energy system and especially biomass – Lithuania’s most significant domestic energy resource.
Lithuania’s dependence on imported fuel from Russia has long been seen as both an economic and a political challenge. The government in Vilnius has thus embarked on important energy policy reforms which aim to progressively reduce the excessive reliance on one single supplier to liberalise the energy markets. One of measures was the increased use of domestic renewable energy across the entire
Biomass has now become one of the country’s main energy sources. Practically all cities, towns and large villages in Lithuania have switched to biomass district heating. The share of biomass in central district heating increased between 2000 and 2016 from 2% to about 65% – and has also already exceeded the share of imported gas. The share is expected to further grow to reach 90% by 2030, according
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to the Lithuanian National Energy Independence Strategy. Over the years, an effective, flexible and open biomass sector has been created in Lithuania – not least also because of Baltpool. While a few major sellers with high market shares previously dominated the market, there are now over 200 suppliers of solid biomass. The turnover in the biomass sector amounts to more than €400 million annually and more than 7,500 people are employed in it. Biomass technologies worth €100 million are exported every year.
GENERAL INFORMATION Baltpool is joint stock company that was established in 2010. Originally, the exchange was focused on power and gas trading but it later reoriented to biomass and, since 2012, has operated as an energy exchange for trading wood chips, wood pellets and forestry biomass in Lithuania. The state-run energy holding Epso-G owns a 67% stake in Baltpool, while the stateowned oil and gas terminals operator Klaipedos Nafta holds the remaining 33% of shares. The exchange is licensed and regulated by the National Energy Regulatory Council.
Trading biomass like electricity Biomass is considered to be a key factor in the transition from fossil fuels to renewable energies. However, the market for the green raw material has long been fragmented and non-transparent. Baltpool has managed to change this: anyone who wants to buy or sell biomass, can now use the fully-functioning Lithuanian biomass energy exchange. In other countries too.
a
by ALE X ANDER WEL SCHER
be for us. However, it is not so much the infrastructure but rather the way that energy is traded in other markets. When an energy company or any other market player is used to trade electricity and gas via the exchange, they are very open to the idea that biomass could also be traded there. So that is the positive thing about the liberalisation of the gas and electricity market.
cquiring a basic understanding of fossil fuel markets is pretty easy. Oil and gas as well as their main producers and suppliers are widely known and get plenty of media attention. There are long established trading places, regularly published price indexes and numerous reports about the mechanisms and developments of the markets. The same goes basically for electricity too. Do you want to know the current energy prices or other market data? Just simply look it up online on the websites of the respective energy exchanges, such as GET Baltic or Nordpool – the main marketplaces for gas and electricity in the Nordic and Baltic region.
What effects you expect on your business from the ambitious EU Green Deal that aims to decarbonize the world’s secondlargest economy by 2050? We believe that Europe’s policy to go green will, of course, be good for our business. This is a big challenge for the energy sector, but from the perspective of society, this shift creates a positive momentum. People would like to rescue nature and take care of the environment, especially the one where they live. So, together with Europe, we also need to go that way. AW
By contrast, to get an understanding of the renewable energy market is still rather difficult. Biomass in particular has long been a raw material with unclear prices and no official marketplace. This is mainly because different feedstocks have different physical and chemical characteristics that vary by region and season. Biomass markets thus operate at local conditions and in a highly informal manner in many world regions – even though there are already effectively established supply chains. To get a price quote, the only option is often to reach out to a local supplier.
Turnover 2018: EUR 902,700 EBITDA: EUR 232,000 Employees: 12
Not so in Lithuania, where standardized trade arrangements can be made via an established market hub for solid biomass – the Baltpool biomass exchange. The online trading venue allows buyers and sellers to electronically conclude contracts according to established rules and transparent procedures. Through the trading system, market participants can sell their products and purchase the required quantity of wood chips, wood pellets and other forestry biomass. “Our exchange ensures an efficient balance of supply and demand – just like any other exchange”, says Andrius Smaliukas, CEO of the Vilnius-based market hub. By this, Baltpool aims to create a transparent market with competitive and nondiscriminatory prices as central parameters. “We bring buyers and sellers together on a central platform. This helps to ensure that biomass is provided at the lowest possible cost and fair market conditions.”
Market hub for wooden biomass
Baltpool operates in its home market of Lithuania and the neighbouring countries of Latvia, Estonia and Poland. Together with a local partner, an exchange was also set up in
Denmark and operations are to start in Finland based on the same principle in 2020. More than 420 market participants from five countries are currently active on the exchange and trade annually around 5.6 terawatt hours (2 million tons) of biomass at the trading venues. Energy companies appreciate the marketplace. Transparency and openness are some of the many advantages, according to market participants from Lithuania and Latvia. Apart from fair and market prices, the exchange is about stable future energy supplies. “Our main clients are municipal utilities and power plant operators that produce electricity or heat, and supply to the customers. For them, the main thing is security of supply – this is often even more important than the price”, explains Smaliukas. “They can mitigate risks with product quality and delivery by using the stock exchange and get additional flexibility from the spot market. When they need suddenly additional amounts of biomass, they just go to the exchange and get it.” As an example: A municipal district heating company operates combined heat and power plants and needs a lot of wood chips for its operations. The company now believes that the
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Photo: Arina Solntzeff
Could Baltpool become a model for other European countries? Our big plan is to make biomass trading much more efficient and easy – not just in the Nordic and Baltic region but also in the whole of Europe. We believe that electronic biomass trading platforms are necessary to develop the market, especially in countries that are planning to use more biomass as fuel. We could see this in Lithuania – the market grew together with the demand. The speed with which we were be able to change from natural gas to biomass is really a success story of the entire Lithuanian energy sector, which will hopefully also inspire other countries. We are happy that Baltpool was and is part of it because we believe that we greatly contributed to achieving the goal by creating an effective biomass market.
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prices of the wooden fuel will rise in the near future and is therefore looking for a supplier on the stock exchange who will sell wood chips for the next heating season at a fixed price over the next couple of months. This enables the operator to set its procurement costs. Or conversely: A sawmill is looking for a buyer who will buy its wood residues at the current price in the long term or can secure a margin by selling excessive biomass earlier due to a favourable price.
How the trading system works
Baltpool facilitates price setting for these transactions. The platform is operated by trading analysts in the Baltpool main office in Vilnius. They sit in front of several screens and look at endless tables of numbers that indicate how many megawatt hours or TOE (tonnes of oil equivalent) of biomass are currently changing owners and at what conditions and settlement prices. The prices are determined by an auction, where purchase orders are matched with bids from possible suppliers. It takes place weekly and, in practice, proceeds as follows: Biomass buyers and sellers place their orders by 10.30 a.m. on the second business day of each calendar week, after which the auction begins at 11.00 a.m. Vilnius time and lasts one hour. The interested parties can then choose to adapt their prices to match their offer. This anonymous “partner search” through Baltpool helps to ensure that biomass gets a transparent market price.
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When the trading results are announced, participants receive electronic copies of the finalised purchase agreement. The digital contracts entered on the exchange are legally binding for both buyers and sellers, and are considered equal to paper contracts. In 2019, more than 5,250 transactions were concluded with an average quantity per transaction of 82 TOE. In total, 431,870 TOE of biomass were traded at the Baltpool trading venues at an average price of 144.99 EUR/TOE, along with other energy sources such as timber and heat. The turnover at the exchange was €62 million. Changes in the price and market situation are reflected in biomass product indexes. They include all one-week supply transactions on the exchange and are published weekly, immediately after trading auctions. “Previously, it was impossible to monitor the price changes, but the trading platform enables us to track the development. In Lithuania, 90% of market volume is traded on our platform. So we are able to provide a very clear and valuable picture”, Smaliukas relates with a hint of pride. Over the entire time period of operation of the exchange, the biomass price in Lithuania decreased by more than 20%.
Altering the market and its rules
In Lithuania, most district heating
utilities now procure their biomass through Baltpool. One of the reasons is that Baltpool ensures that the same rules apply to everyone, and it has more or less become the entire market. Not least so because since 2016 basically all regulated heat providers have been buying more or less obligatorily and have to pay their biomass via the trading system. Not much trade happens off the exchange anymore. Mainly, biomass products such as sawdust and tree bark are traded outside Baltpool, usually in small quantities.
are divided into four reliability categories. The better the category, the fewer collaterals are required and the fewer restrictions on trading volumes and contract duration are imposed on the participant. “This limits the possibility of weaker market participants to enter disproportionally large contracts”, adds Smaliukas.
Subsequent self-regulation
In contrast to financial stock exchanges, the contracts concluded through Baltpool do not involve financial settlements only, but also the actual physical delivery of the goods. Prices on the exchange include transport and unloading. The system thus offers a transportation distance calculation algorithm. By this, sellers can limit the geography of their delivery and accurately estimate logistics costs. Or they can theoretically compete for biomass deliveries all over Lithuania, regardless of where they are actually located. Baltpool has now even worked out the conditions for transport by ship from and to Baltic ports.
Before the exchange started its operations in 2012, there used to be only a few top dogs in the biomass business who set prices and market conditions. Due to the politically endorsed energy transition from natural gas to biomass in the district heating sector, many more sellers have entered the previously murky market. Even smaller market players can now take part in the exchange that satisfies about two thirds of the annual demand for biomass in Lithuania. Entering and utilizing the exchange is free of charge and there is also no terminal or other connection component needed to join the webbased trading system. Fees are only charged for actual transactions – half a percent of the contract value. The minimum amount of order is 70 megawatt hours, which equals one truck. “Our smallest market participants are farmers. They usually use the exchange only in the winter time when the farming season is over to sell stem wood or logging residues”, explains Smaliukas. To make sure that the trading system is working efficiently and that security of supply is ensured, Baltpool checks the financial conditions, experience and technical capabilities of each participant. Based on a risk management system, participants
What others say about Baltpool Photo: Liepājas enerģija
The quantity, type and delivery period of the standardized biomass products have to be specified in the offer. It is possible to trade four types of wood chips, three types of wood pellets and also milled peat by contracts with a duration term of a week, month, quarter or half a year. The exchange
rules also stipulate what quality standards and technical specifications, such as ash or moisture content, the delivered biomass has to meet, how to measure them and what happens in non-compliances cases or if anything goes wrong with the delivery. As concerns continue to mount over environmental degradation and climate change, sustainability standards are also about to play a growing role on the exchange.
Liepājas enerģija is the main provider of district heating in the third biggest Latvian city Liepāja. The utility generates about two thirds of its heat from
Upon delivery of the biomass, the buyer takes a sample that has to be analysed in an independent laboratory. After entering the results in the trading system, the energy value of delivered biomass is calculated automatically. Most of the time, the products fully meet the required quality standards. Only rarely trades are later disputed, according to Smaliukas. “If there is a dispute about quality, we get involved in it. We offer additional services to mediate between both parties to find a solution”, says the Baltpool CEO. “So far, all the contracts were executed properly and we had no cases of default.” Over the entire period of its operation, more than 2 million TOE (23 terawatt hours) of biomass have already changed hands via the energy exchange. Most of the quantities were traded under weekly contracts – they account for 40% of the sales of biomass at the exchange. In total, around 8.2 million tonnes of biomass, or nearly 300,000 trucks, were delivered to buyers. Lined up, the vehicles would
renewable energy sources and usually incinerates around 200,000 megawatt hours of wood chips per year. In addition to long term supply agreements, Liepājas enerģija participates in the Baltpool. Depending on the price and weather conditions, the energy supplier sources up to 30,000 megawatt hours per year via the biomass exchange. “We use the Baltpool trading system to meet the demand for additional resources of wood chips”, says board member Andris
stretch the distance from Vilnius to Madrid and back, according to Baltpool.
Expansion to other markets
Not as far-reaching as the truck line are the expansion plans of Smaliukas, who is looking to export the Lithuanian experience in setting up a biomass exchange to other countries. Next in line after the Baltic and Nordic countries is now Germany, where talks are already on-going with some potential partners. This is not least because of the “Energiewende” (energy transition), Germany’s ambitious transition of its energy system to renewable sources. “We believe that electronic biomass trading platforms are necessary to develop the market”, says the Lithuania energy exchange executive, who considers his exchange to be a supporting factor for the green shift. Ultimately, Smaliukas’ aim is to make trading biomass more efficient and easy on a transparent European-wide platform. Getting a basic understanding about the biomass market would then be pretty easy. Not just in Lithuania.
Štāls. “We buy up to 30% of our needs there, but this depends on the outside temperatures.” Especially in the winter period, Liepājas enerģija uses Baltpool practically every week, according to Štāls. This winter, however, is “extremely warm” and the demand is lower. Liepājas enerģija mainly follows a simple and universal rule on the exchange. “We have regular contracts with a probability to buy of +/- 30%. If prices on Baltpool are lower than in our contracts, we try to
buy,” is how Štāls explains his company’s trading scheme. “If Baltpool prices go up, we use the maximum of our regular contracts.” With check marks in his purchase orders, Štāls is able to ensure that Liepājas enerģija is solely matched with suppliers who can provide wood chips in the required amount and quality. “We do not have a special employee for this, and I practically do it by myself,” he says and seems generally satisfied with the biomass exchange and the ease of trading.
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Baltic energy transformation Variable renewable energy, distributed generation and digital technology will be crucial elements of the future energy system. Energy companies are at the centre of the shift towards a multi-directional, digitally interconnected energy system. Baltic Business Quarterly asked three major Baltic energy players what market trends they see and what they do to drive the transition.
of the regional drivers of the green energy transformation and we plan to increase our green portfolio to 3000 MW by 2030. This will be done mostly through the acquisition of existing renewable energy plants and the execution of clean energy projects in the Baltics and Poland. WHICH CURRENT AND UPCOMING TRENDS WILL INFLUENCE THE ENERGY MARKETS IN ESTONIA, LATVIA AND LITHUANIA IN THE COMING YEARS?
Priit Luts: Two major issues
PRIIT LUTS
MĀRIS BALODIS
DARIUS MAIKŠTĖNAS
SPOKESPERSON EESTI ENERGIA
HEAD OF RESEARCH AND DEVELOPMENT, AS LATVENERGO
CEO AND CHAIRMAN OF THE BOARD AT IGNITIS GROUP
by ALE X ANDER WEL SCHER
GERMANY HAS DECIDED TO SWITCH ITS ENTIRE ENERGY SUPPLY TO RENEWABLES. WILL WE SEE A TRANSITION SIMILAR TO THE “ENERGIEWENDE” IN THE BALTICS TOO?
Priit Luts: The transition to a climate-neutral society is a longterm objective but as it is expected to be hammered into the “climate law” by the European Commission, then it is obvious that all EU member states will be bound to this common objective. We are glad to admit that all three Baltic countries are among the top 10 performers in the EU when it comes to meeting 2020 targets and this trend is expected to continue
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also in terms of fulfilling the 2030 targets. Estonia has so far met all its targets for reducing greenhouse gases and increasing renewable energy.
Māris Balodis: The share of renewable energy will undoubtedly grow, even regardless of the fact that Latvia is already one of the European Union’s leaders in this regard. If we look at Germany, the “Energiewende” energy transition was dominated by the need to phase out nuclear, coal and lignite power plants. In the Baltics, and especially in Latvia, the situation was quite different historically. Hydro energy and local biomass resources have played a major role and there was no environmentally harmful generation, except oil shale plants, in Estonia. We must also take into account the ability of the economies of the Baltic states to ensure such a huge transformation of the energy sector
as it is planned in Germany. On the one hand, the Baltics can’t afford to dedicate enormous financial resources to expensive projects, while on the other hand, paradoxically and thanks to the smaller population and area of the countries, we can outpace Germany in things like the electrification of the transport sector.
Darius Maikštėnas: The National Energy Independence Strategy of Lithuania projects that 45% of electricity consumption and as much as 90% of heat energy will be produced from renewable energy sources by 2030. Furthermore, all electricity and heat consumed in Lithuania will be produced from renewable and other clean sources by 2050. Renewable energy sources will account for 80% of Lithuania’s total energy consumption. As mentioned in our company’s 2030 strategy, the Ignitis Group is aiming to become one
dominating the Baltic energy markets currently are related to the desynchronization of Baltic electricity systems from the Russian electricity system and the rapid depletion of dispatchable generation capacities in the Baltic states, whose place has been taken by thirdcountry electricity imports. Given the fact that the development of new generation capacities in the Baltic states has been rather limited during the last few years, while very active in neighbouring third countries (Russia, Belarus), the latest developments in the market could be described as an act of carbon leakage in the electricity sector. Electricity imported from Russia to the Baltic states and Finland damages the competitiveness of energy production and energy security of the entire region. Russian electricity producers have a significant competitive advantage compared to local EU producers, as the CO2 emissions of Russian electricity producers have not been priced. At the same time, unfair competition of Russian electricity is hampering the investments needed in renewable energy production to meet the climate targets, since the market price of electricity (against which the investment will be analyzed) is shaped by a significantly lower cost base for Russian producers,
which is creating an unfair market situation for European energy producers. Desynchronization by 2025 should bring an end to this phenomenon and give a new impetus to local developers.
Māris Balodis: The EURELECTRIC analysis reveals that two trends will set the tone in the energy sector in the near future: decarbonization and electrification. The Baltic region is no exception, and we foresee growth in the use of renewables, especially wind and bioenergy, a lesser role for oil shale in Estonia, the diversification of gas supply routes (thanks to the Klaipeda liquefied natural gas terminal) and a variety of alternative gases, including a bigger proportion of biogas and biomethane in our gas networks. Electrification will affect the heating and cooling sector with more use of heat pumps, and especially the transport sector with the widespread development of electric vehicles and charging stations. We’re not just talking about electrifying passenger vehicles, but also about public and freight transport. The Rail Baltic project is quite interesting in this regard. The synchronization of the Baltic states’ electricity transmission grid with continental Europe’s system is another important trend. It involves making the Baltic power transmission system work in parallel with those of Western Europe, and to partially disconnect from the Integrated/ Unified Power System (IPS/UPS) of Russia and Belarus by 2025. The partial realignment to other suppliers is planned in the gas sector as well.
Darius Maikštėnas: Talking about Lithuania, it is the deregulation of the energy market that will influence the market the most. By 2021, Lithuanian household customers will be free to choose the electricity supplier they prefer. That will mean intense competition
amongst independent suppliers for their share of the market and more favourable conditions for customers. Another trend which we will see in the energy sector of the whole region is decarbonization. You can already see the growing attention worldwide to energy technologies that reduce the carbon footprint. The Baltic states won’t be an exception and will act in line with the EU’s ambition to go carbon-neutral by 2050. WHAT NEW TECHNOLOGIES DO YOUR COMPANIES ALREADY USE AND WHAT DO YOU EXPECT TO BE THE NEXT BIG THING?
Priit Luts: There are currently quite a number of “crazy ideas” circulating among experts regarding how to bring our energy economies forward. Obviously, onshore wind and increasingly photovoltaics solutions are the most common solutions. Off-shore wind and various storage solutions are considered as promising for the upcoming decade. The hydrogen economy is expected to follow when we have already deployed renewable energy sources solutions in abundant amounts. And of course, new services for customers and related technological solutions are currently actively considered, as the deployment of smart metering in Estonia has already reached almost all consumers.
Māris Balodis: The huge challenge for the industry now is developing energy storage solutions, and we are not an exception. Another intriguing area is the potential for using so-called “green hydrogen”, which may become one of the most important fuels not only in the transport sector, but also in thermal power plants. Latvenergo participates in discussions and shares experiences in sector coupling and conversion of electric power into various substances (power-to-X). There is
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a trend towards decentralisation and creating micro grids. Latvenergo has planned to carry out a micro grid pilot project. Additionally, after the Baltic energy systems are synchronized with those in continental Europe, the Baltic states themselves will have to provide system services, i.e. frequency control, inertia and balancing. One of the possible technologies is the use of various electric batteries Latvenergo is currently exploring the possibility of installing such a battery electric storage system (BESS).
Darius Maikštėnas: Attention to renewable energy and to the creation and development of innovations in the energy sector is embedded in our company’s strategy for 2030. Ignitis Group, along with international giants such as Hyundai, Honda, and BP is also investing in start-ups that develop future energy technologies and decarbonization solutions worldwide. For example, in the autumn of 2019, the Smart Energy Fund of Ignitis Group invested in the Israeli company H2Pro, which develops innovative and environmentally-friendly hydrogen production technology. Earlier, our Group’s Smart Energy Fund directed investments towards the British startup Moixa which develops smart energy storage devices and virtual power plant technologies. THE BALTICS ARE MOVING TOWARDS A COMMON ENERGY MARKET. WHEN DO YOU THINK IT WILL BE COMPLETED? AND HOW BIG IS YOUR MARKET SHARE ALREADY IN THE NEIGHBOURING COUNTRIES?
Priit Luts: In terms of infrastructure, the Baltic States are already practically one marketplace. In order to make that happen in terms of regulation, some bigger market participants have already suggested to Transmission System Operators and regulators that merging the Baltic bidding
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areas should be considered sooner rather than later. Obviously, that takes time, but by 2025 it should be feasible. In terms of gas, Estonia, Latvia and Finland have already formed a common marketplace. We expect the remaining disagreements with Lithuania to be resolved quickly so that Lithuania will also be able to join. Our market share in electricity sales is 60% in Estonia, 14% in Latvia and 8% in Lithuania.
Māris Balodis: The common electricity market has existed in the Baltics for quite some time now, actually. The energy companies in the Baltics actively trade on the Nord Pool exchange, and in each of the countries, there is much competition in the retail and supply of electricity. A common gas market is also establishing itself in the Baltics right now. With the already mentioned power system synchronization project and the integration of gas supply networks in the future, Baltic energy markets will merge into the pan-European markets. As an energy company, we operate in all energy trade segments in Latvia, Lithuania and Estonia. Currently, the electricity we supply outside Latvia accounts for one third of the overall amount of electricity sold to end consumers. In order to increase this share, we have been exporting solar panel services, and successfully so, especially in Lithuania.
alternative gas flows through the LNG terminal in Klaipeda and, once the interconnection with Poland is established, from other European markets. In our opinion, this does not yet provide the key benefits of the regional market. Our market share in the Latvian natural gas market ranges from 5% to 10%. Our market share in the Finnish natural gas market is around 13%. WHAT DO YOU CONSIDER TO BE THE MOST IMPORTANT ASPECTS AND (POTENTIAL) BENEFITS OF DIGITIZATION IN THE POWER AND ENERGY SECTOR?
Priit Luts: Europe is behind on
Darius Maikštėnas: Currently,
the smart meter goal – 70% of consumers by end of 2020. If the current pace continues, we will reach 50% in the best-case scenario. This means that we are lacking data that could motivate consumers to make changes in their consumption, as well as production. Customer engagement will increase if energy consumption and pricerelated data is made available to consumers. In Estonia, all metering points are smart meters. Our digital ambition is a radical improvement/ re-engineering of existing business processes through IT and technology innovation. In 2019, Eesti Energia and Microsoft signed a cooperation agreement to jointly develop and export digital power and power network management solutions.
Latvia and Estonia have merged their gas systems, creating a regional market. Together with Finland, those countries created a unified natural gas transmission entry-exit system where payments regarding the border-crossing between the mentioned countries are not applied. Nevertheless, without the accession of Lithuania to the merged market zone, the barriers still exist for direct access to
Māris Balodis: Digitization in the electricity supply sector makes it possible to automate various processes that were previously done manually. For example, electricity consumers used to have to take the electric meter readings and send them to the power company themselves. Thanks to the widespread use of smart meters nowadays, this data is automatically sent to the
electricity suppliers. Smart meters also enable consumers to analyse this data and find ways to save electricity (improve energy efficiency). In the future, an aggregation service may be created that enables a combination of the consumption of multiple consumers, and to balance the supply and demand.
Darius Maikštėnas: For energy suppliers, digitization is one of the tools for keeping up with the changes in the market. It enables quick adaptation and time to market of new technologies, which is one of the most important aspects. At the same time, digitization benefits energy consumers by enabling a simple and broad choice of services and service providers. Changing an energy supplier or charging one’s electric vehicle wouldn’t be as simple as it is today without digital technologies. And for infrastructure owners, digitization provides a means to be more responsive when dealing with infrastructure problems. To put it simply – it helps to provide better electricity. IN WHAT AREAS AND HOW MUCH DO YOU INVEST IN DIGITAL TECHNOLOGIES TO TRANSFORM THE ENERGY SYSTEM?
Priit Luts: The strategic goal of Eesti Energia is to provide a great customer experience through digital solutions and reach 1 million customers in the Baltic Sea region by 2023. Contractual partners see international export opportunities in digital network management solutions as Estonia has emerged as a leader in other countries and network companies thanks to long-distance electricity meters, as well as in other new customer-oriented solutions. We also have a mobile app. You can see your consumption information, electricity and gas contract, bills and contact
details are easy to access from anywhere using the mobile app. The app allows you to view your consumption volumes with hourly precision. You can also compare longer periods (week, month and year) for a more thorough analysis. We are also digitizing our energy industry, implementing datadriven management to streamline our manufacturing processes.
Māris Balodis: The smart electric power meters already mentioned is one of the areas. Power plants also make extensive use of digital systems, and these will allow us to change the way power plants are operated. For example, transitioning to condition-based maintenance (CBM), when decisions about the maintenance of power plant equipment is made based on its actual technical condition, using measurements of a number of technical parameters. Another possible concept is the so-called “digital twin” when performance data from power plant control monitoring system is compared to simulated performance. Latvenergo has successfully implemented an innovative system for the automated assessment of the condition of hydropower plant dams on the Daugava – the system collects and processes data automatically to monitor the condition of the plants and the assessment of dam safety. To recalculate possible high floods, we have also introduced water engineering structure stability programmes, among other things.
Darius Maikštėnas: Anything related to commercial innovations – new services, solutions and so on are based on digital technologies. From the energy infrastructure perspective, we are currently focusing on digital grid inspection, predictive analytics and grid planning.
WHILE DIGITIZATION BRINGS MANY BENEFITS, IT ALSO MAKE ENERGY SYSTEMS MORE VULNERABLE TO CYBER ATTACKS. HOW DO YOU DEAL WITH THE INCREASING NEW SECURITY AND PRIVACY RISKS?
Priit Luts: So far, there have been no major incidents that have significantly affected our day-to-day operations or caused any financial loss. Cyber security is hygiene for us.
Māris Balodis: This is one of the biggest challenges for the energy sector, as digitization progresses. Nowadays, energy sector facilities are becoming increasingly exposed to hacker attacks. However, modern methods make it possible to prevent them. The VGB association also pays particular attention to cyber security in the energy sector, and its ‘IT Security for Generating Plants’ standard brings together the most important trends that affect IT&T security in this industry. The Latvenergo Group has approved and implemented an information system security policy that sets uniform principles for information systems and for managing information system resources within the Group, providing a sufficient level of confidentiality, integrity and availability. Darius Maikštėnas: The protection of digital technologies – and group operations that depend on them – from cyber threats is being ensured by measures based on risk assessment, fulfilling the requirements of cyber security regulations, and implementing global cyber security good practices. Ignitis Group is constantly introducing the latest information technology security solutions, which boost the capability to detect and manage possible cyber attacks. Our company also cooperates with the National Cyber Security Center (NTSC) and participates in cyber security exercises organized every year by NTSC.
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38 | T R A N S P O RT After testing gas-powered trucks and being convinced of the benefits, Girteka Logistics is now adding environmentallyfriendly LNG trucks to the fleet.
emission standards. Since 2016, Norma -A has purchased 13 new MAN buses that meet the standard. According to Užans, the company continues to invest in the latest, more environmentally-friendly buses.
by EGONS MUDULIS
Facing Environmental Impact Challenges
Latvijas Dzelzceļš Latvian Railway
As climate change, greenhouse gas (GHG) emissions and environmental impact are increasingly becoming hot topics, businesses have to deal with the challenges they present.
to
find out what Baltic transport companies are doing to address these issues, Baltic Business Quarterly asked several passenger and cargo sector companies for a comment. Some chose not to respond, while others sent more or less detailed answers about their activities in the past and plans for the future. To sum up: businesses make use of available technologies and alternative fuels taking into account the current and planned legislation in specific countries and the EU, as well as the costs of greener operation.
Girteka
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The company complies with the UNGC principles (businesses should support a precautionary approach to environmental challenges; undertake initiatives to promote greater environmental responsibility; encourage the development and diffusion of environmentallyfriendly technologies) and constantly strengthens its use of intermodal solutions in order to reduce CO2 emissions and use more eco-friendly transportation of cargo.
Kreiss
“As the largest road transport company in Latvia and one of the most important freight carriers in the European market, Kreiss takes an environmentallyfriendly approach at all stages of the transportation service. Our goals and objectives are aimed at reducing environmental impact and energy efficiency,” says Natalija Vihrova, Public Relations Manager at Kreiss. The company has been increasing its efficiency by continuously updating and developing its fleet. Now, 99%
of trucks in the Kreiss fleet meet Euro 6 emission standards. As far as aerodynamics and performance modifications are concerned, Kreiss only uses Premium class tyres that have a special rubber compound. As a result, the tyres have lower rolling resistance and are more eco-efficient. In addition, company uses retreaded tyres that require fewer natural resources. The tyres have a built-in pressure control system, too. Kreiss makes use of alternative transport options offered by intermodal operators − ferries, road trains, etc. Precise route planning allows the company to reduce unloaded journeys. The firm is now testing a new fleet management system with multiple functions to control fleet performance, driver driving style and fuel consumption. Kreiss has been training its drivers to drive trucks with reduced fuel consumption. As a result, fuel consumption is reduced on average by 1−3 litres per 100 km. When choosing partners, Kreiss gives priority to companies that support greener practices (digital documents, e-signatures, digital order forms, recycling, etc.).
Lux Express
But what about the international transport of passengers by coach? In cooperation with Scania and coach manufacturer Irizar, Lux Express is
looking to move from diesel fuel powered coaches to gas powered ones − either compressed natural gas (CNG) or liquefied natural gas (LNG), says Janno Ritsberg, CEO at the Estonian company. Such coaches would be available around the second half of 2021. The company is also keeping an eye on the development of electric coaches. Commenting on the financial aspects of other fuels, Ritsberg explains, “The price of a coach with a gas engine is about 12% to 15% higher than coaches with diesel engines.” Even
“Lux Express is looking to move from diesel fuel powered coaches to gas powered ones − either compressed natural gas (CNG) or liquefied natural gas (LNG). The company is also keeping an eye on the development of electric coaches,” says Janno Ritsberg, CEO Lux Express
though the gas consumption per 100 km is comparable with EURO 6 diesel consumption (about 24−25 l/100 km), the cost of fuel is about 35% lower when comparing gas and diesel, but the expected repair and maintenance costs will be about 25−30% higher. For now, it is unclear how the residual value for gas powered coaches will develop. So for him, currently, there are more questions than answers. It is clear, however, that taking into account the whole coach life cycle, it will not be cheaper than the current diesel powered coaches. As far as upcoming challenges are concerned, these are infrastructure questions in terms of gas stations over the short term. It would take more than a few years to get current diesel powered trucks and coaches to be swapped on gas engines, therefore the demand for CNG and LNG stations would be relatively low. That, in turn, means that not all the operators could afford CNG or LNG powered vehicles due to fuelling constraints.
Ecolines Photo: Publicity photos
Let us start with road cargo transportation for lorries. Trailers are everywhere before our eyes on congested highways. As the Lithuanian company Girteka Logistics is a signatory to the United Nations Global Conduct (UNGC), it has committed to investing in a sustainable way of business that is equally important for it and its global clients, says Neringa Rimšelienė, the marketing and communications partner at the largest asset-based FTL (full truckload) transport and logistics company in Europe. She adds, “After testing gaspowered trucks and being convinced of the benefits, we are now adding environmentally-friendly LNG trucks to our fleet. Recently, Girteka Logistics
announced that it is buying 1,800 new Volvo FH trucks.” The deal includes a record breaking 900 units of Volvo FH with I-Save, Volvo Trucks’ latest innovative fuel saving technology which can reduce fuel consumption and CO2 emissions by up to 7%.
As new technologies have not yet reached mass production levels for coaches, there is not much to comment on, says Tomass Užans, Head of E-commerce at coach operator Ecolines, a brand of Norma-A Ltd. Nevertheless, Ecolines have been upgrading their fleet to meet Euro 6
Let us turn now to rail transport which is one of the most environmentallyfriendly modes of transport according to Ella Pētermane, Head of Corporate Communication at the joint-stock company SJSC Latvijas dzelzceļš (LDz) or Latvian Railway. Recognizing, however, that the economic activity of LDz has a certain impact on the environment, the company strives to reduce it in various ways. LDz is an infrastructure manager and has some subsidiaries that offer other services. One of the solutions to reduce harmful emissions into the environment is retrofitting the rolling stock that LDz subsidiaries have. LDz Rolling Stock Service Ltd has upgraded 14 2M62UM two-section diesel locomotives LDz CARGO Ltd, a freight transport subsidiary of LDz, has partnered with DiGAS to implement a project on the gasification of a ČME3 shunting locomotive. Preliminary testing results from DiGAS showed that the financial savings from dual-locomotives and gas costs are estimated at €31,800 per locomotive per year. Similarly, LDz in cooperation with representatives of the Latvian Hydrogen Association developed a hydrogen-powered locomotive prototype named Hyloco in 2016−2017. The ČME3 shunting locomotive was used as a base model. LDz is ready to implement such a project if EU funding is granted. The company’s future plans include reducing the use of fossil fuels both in day-to-day infrastructure management processes (changing heating systems and lighting) and in line with government-adopted energy and climate plans. In addition, if a railway electrification project is implemented,
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it will open up possibilities for operators to replace diesel traction with electric traction and reduce emissions, vibrations, noise and soil pollution.
Director at the Estonian company Tallink, the leading provider of minicruise and passenger transport services in the northern Baltic Sea region, as well as of ro-ro cargo services along selected routes. According to Link, emissions-related topics which can be attributed to climate change as well as the wellbeing of people are regulated by the International Maritime Organization (IMO). After the Paris Climate Agreement, CO2 emissionsrelated topics have been adopted by the IMO and the EU. Highly specific tasks of monitoring and reporting fuel consumption-related operational figures, including CO2 emissions, are assigned to shipping companies. Tallink has developed specific tasks and routines in order to collect and report required information.
Eesti Raudtee
Estonian Railways “In Estonia we have a very high regard for the environmentally-friendliness of rail transport,” says Monika Lilles, Communication Manager at Eesti Raudtee or Estonian Railways Ltd, the country’s state-owned infrastructure manager. According to Lilles, passenger trains in Estonia are operated by AS Eesti Liinirongid (Elron). In 2014, the train fleet was completely replaced with new Stadler Flirt trains. Half of the fleet are electric trains which serve Harjumaa regional lines, and the rest are diesel trains which serve national lines. Estonian Railways has started its electrification project, which envisages the construction of approximately 680 km of new contact lines in the next eight years. According to the plan, by the end of 2028, nearly 900 kilometres of the railway will be electrified. The total cost of the project is €295.1 million. This also means that any new trains procured will be in line with the electrification plan.
Operail
To further reduce its emissions from rail freight transportation, Operail has started to build the first mainline LNG freight locomotive in the region.
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airBaltic
Now from rail to air. “As one of the most innovative airlines globally, airBaltic is strongly committed to reducing its impact on the environment,” says Martin Gauss, CEO at the Latvian national carrier airBaltic. This year, the company is putting an additional focus on sustainability but “already today we fly a growing number of Airbus A220-300s, the greenest commercial aircraft available, and we have introduced various other notable initiatives to decrease CO2 emissions.” airBaltic will have a single Airbus A220-300 type fleet by 2023. According to Gauss, Airbus A220300 “is the first aircraft with a fully transparent life-cycle declaration,”
“Customer awareness is definitely increasing in this extent as well. Tallink has received a number of enquiries concerning the CO2 emissions per passenger on specific voyages. The number of similar enquiries will probably rise in the future,” Link notes.
helping to reduce CO2 and NOX emissions by 20% and 50% respectively. The new aircraft saves up to 22% of fuel compared to the Boeing 737 fleet. Compared to 2016, when the first Airbus A220-300 entered operations, airBaltic CO2 emissions per revenue passenger kilometre have decreased overall by 16%. The aviation market remains highly competitive, which means every airline in the world seeks additional efficiency, stresses Gauss. There is huge pressure on airlines to keep their prices low so the industry invests $15 billion every year in research to produce more efficient aircraft. Efficiency decreases airBaltic costs, enables lower fares and helps to further decrease fuel consumption and CO2 emissions, which has been a rising concern among passengers in Europe.
Tallink
Now let’s move from the blue sky to the blue seas. As a shipping company, Tallink is constantly facing different legal provisions (global, regional, local), says Katri Link, Communications
As intermodal transport was mentioned by some companies, here is a final touch as a representative of the Latvian Logistics Association in the Combine project funded by the Interreg Baltic Sea Region Programme. As the project aims at enhancing the share of combined transport in the Baltic Sea Region to make transport more efficient and environmentally-friendly, producers, shippers, transport operators and others may want to check what possibilities await them in the future.
Tallink has been working for years to increase the energy efficiency of its ships, hence reducing fuel consumption and emissions. Tallink has managed to reduce CO2 emissions per passenger by 44%.
Photo: Publicity photos
“Everyone knows that the freight sector’s carbon footprint is inevitably big,” acknowledges Raul Toomsalu, Chairman of the Management Board at Operail, the rail freight company owned by the Estonian Government. He says that Operail has taken goods from roads to rail by initiating multimodal container freight lines, thus improving road safety and reducing pollution in the entire transportation sector. “We have replaced over 8,000 truck runs with rail freight over the last 12 months.”
The locomotive decreases fuel costs by at least 30%, emits 20% less carbon dioxide and 70% less sulphur dioxide than diesel locomotives. The next step is to use technologies that have no emissions at all, claims Toomsalu. A good example is hydrogen powered locomotives. As he believes that this technology will surely have an impact on the future of the railway sector, “we are taking the first steps to implement the technology in Estonia in rail freight transportation.”
“airBaltic will have a single Airbus A220-300 type fleet by 2023. Airbus A220-300 is the first aircraft with a fully transparent life-cycle declaration,” Martin Gauss, CEO at airBaltic
Tallink has been working for years to increase the energy efficiency of its ships, hence reducing fuel consumption and emissions. The EU and IMO have set specific targets for the whole shipping industry, for example the EU has stated that CO2 emissions per transport job have to be reduced by 40% by 2030 and by 70% by 2050. Meanwhile, the IMO has stated that the total CO2 emissions from shipping have to be reduced by 50% by 2050 in absolute figures. Over the last 10 years, Tallink has managed to reduce CO2 emissions per passenger by 44%.
C O M M E N T
Ojars Karcevskis CEO LATVIAN FUEL TRADERS ASSOCIATION
What is obvious from the activities of Baltic companies is that they are not so focused on how to become greener or minimize GHG emissions in the context of EU policy. Rather, it is clear that business wants to cut expenses, such as by reducing fuel consumption or buying tyres with smaller rolling resistance. The EU, however, is interested in cutting the emissions per energy unit, leaving the choice of transport vehicles to companies themselves, such as electric instead of diesel-powered trains. It seems that the focus is now on natural gas (e. g. Nord Stream pipelines) as a primary energy source for producing electricity consumed, in turn, by electric or hybrid vehicles while the solar and wind energy share will not be so large. In the case of hydrogen as a transport energy source, methane will be split and not water. Compressed natural gas is another fuel that is mainly effective for trucks and buses due to the fact that vehicles need big gas cylinders. And finally there is liquefied natural gas that is available in Klaipeda, and there is a plan to build a terminal in Latvia (Skulte), too. LNG is also more suitable for larger transport units. The question is, however, if those solutions are or can be economically viable in the Baltics because of the lower excise duty. Transition is not stimulated by the EU, as it is in the case of other climate instruments, like house renovations. Therefore, the transition is financed by the consumers. I am not against any of the technologies or cutting of GHG emissions. The question, however, is what we in Latvia (Baltics) − not the richest country in the EU − can afford and if there is no more urgent areas to invest or spend money in, such as healthcare and education.
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Radical changes are coming
by ANDA A SERE
Competing against big names Opportunities for clean energy start-ups to rapidly emerge as market leaders are huge and the Baltic states already have some very good examples.
t
he Estonian cleantech startup Skeleton Technologies is the European market leader for ultracapacitors and energy storage systems for transportation, grid, and industrial applications. The firm works with some of the largest companies in the world to decrease emissions and fuel consumption, to improve power quality and protect equipment and infrastructure from power peaks, and to power electrification to fight climate change. Skeleton Technologies was founded in 2009 by the young Estonian entrepreneurs TaavI Madiberk and Oliver Ahlberg in the small town of Tartu and it now has its main manufacturing site in Grossröhrsdorf, Saxony (Germany). “We are a great example of European cooperation: an Estonian success story combining German engineering and Estonian IT in a cluster of high-tech manufacturing companies in Saxony,” says Arnaud Castaignet, Skeleton Technologies Head of Communications & Policy. The company was declared Europe’s best start-up in 2015 at the EcoSummit and is among the 2020 Global Cleantech 100 for the 6th year in a row. Only 20 out of these 100 companies are based in the EU. “Several companies featured in the Global Cleantech 100 list in the past have recently
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become unicorns. Notable examples include Impossible Foods, Blablacar and Uber,” adds Castaignet.
Central role to play “To become the world’s first climate-neutral continent, Europe must reduce emissions further and faster, and by at least 50% by 2030. Given that energy production and use accounts for 75% of the EU’s emissions, energy will have a central role to play in the European Green Deal. Energy efficiency and the development of renewable energy are therefore crucial,” says Castaignet. He emphasizes that all the industries will be impacted but many big corporations are buying start-ups because, as old businesses, they cannot deal with innovative technology development themselves at such a fast pace and scale. Cleantech start-ups are the ones that take into account the future business models and guide their actions based on new and upcoming regulations intended to adapt and mitigate the climate crisis we face. “Despite our important growth, it’s important for us to keep the mindset of a start-up and focus on getting things done and pushing boundaries. This is an important part of our work culture and I believe it’s highly suitable to the development of innovative solutions in the field of technologies fighting climate change,” argues Castaignet.
“It’s important to bear in mind that the energy sector is going to radically change in the coming years, which will facilitate the emergence of new players. The International Energy Agency predicts 920 GW of increase in renewable energy capacity during the period of 2017- 2022. This represents a 43% increase in five years – the same volume that the coal sector achieved in 80 years. So, opportunities are huge for clean energy start-ups to rapidly emerge as market leaders. Clean energy technologies offer holistic solutions and, in consequence, both energy costs and the environmental impact will decrease. So, they help companies and people to be environmentally and economically sustainable. The widespread adoption of energy efficiency measures could reduce industrial energy use by over 25%. This potential is a significant reduction of 8% in global energy
THE ESTONIAN CLEANTECH START-UP SKELETON TECHNOLOGIES IS THE EUROPEAN MARKET LEADER FOR ULTRACAPACITORS AND ENERGY STORAGE SYSTEMS FOR TRANSPORTATION, GRID, AND INDUSTRIAL APPLICATIONS.
“SOLAR ENERGY IS BOOMING IN ESTONIA AND IS EXPECTED TO INTENSIFY AFTER 2020 DUE TO THE REQUIREMENTS FOR NEAR-ZERO ENERGY BUILDINGS, WHILE LARGE-SCALE ENERGY PRODUCTION IS HAMPERED BY THE MARKET SITUATION,” SAYS SCIENCE PARK TEHNOPOL GREENTECH SECTOR MANAGER RAGMAR SAKSING.
use and of 12.4% in global CO2 emissions,” adds Castaignet. The EU has been an early mover on renewable energy and the target of a 20% share of renewable energy by 2020 is now within reach. However, he predicts more ambitious goals for electrification, while renewables penetration won’t be reached without improving energy storage. Increasing volumes of renewable energy sources, such as solar and wind, are driving the need for energy storage technology to level power load and reduce the strain on the grid. “This is why solutions such as ultracapacitors are important to support the development of renewable energy. Ultracapacitors help prevent blackouts by delivering peak power and extending the lifespan of batteries in energy storage systems. They are also able to provide backup power for wind pitch control systems and uninterrupted power systems,” Castaignet explains.
From chemistry to physics FOR OUR COUNTRY, FIGHTING THE CLIMATE CRISIS COULD BE THE BIGGEST BUSINESS OPPORTUNITY SINCE THE INTERNET REVOLUTION, ARNAUD CASTAIGNET, SKELETON TECHNOLOGIES HEAD OF COMMUNICATIONS & POLICY
Science Park Tehnopol Greentech Sector Manager Ragmar Saksing points out that over 90% of Estonia’s CO2 emissions come from burning oil shale for energy. Oil shale contributes significantly to other pollution and waste levels in the country. The Estonian electricity grid is well connected with the neighbours, and large amounts of oil shale energy are exported. The costs of wasted resources, damage to health, and environmental destruction, however, stay in Estonia. “The oil shale industry provides plenty of jobs – about six thousand people work in mining and energy production. They have relatively high salaries and stable jobs in a region that has high unemployment rates and lower incomes. Associated social problems should be a national priority, and new investments in the region are required to implement
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“THE ESTONIAN ENTREPRENEURIAL ATTITUDE CAN HELP SOLVE GLOBAL CHALLENGES. IT HAS BEEN KNOWN FOR UNICORNS SUCH AS SKYPE, TRANSFERWISE AND BOLT BUT IT COULD BECOME EVEN MORE FAMOUS FOR TACKLING CLIMATE CHANGE. FOR OUR COUNTRY, FIGHTING THE CLIMATE CRISIS COULD BE THE BIGGEST BUSINESS OPPORTUNITY SINCE THE INTERNET REVOLUTION,” ARNAUD CASTAIGNET, SKELETON TECHNOLOGIES HEAD OF COMMUNICATIONS & POLICY a fair transition. With the rise of CO2 emissions, electricity production is getting very expensive and new renewable energy sources are taking over the market. Solar energy is booming in Estonia and is expected to intensify after 2020 due to the requirements for near-zero energy buildings, while large-scale energy production is hampered by the market situation. The oil shale industry is heavily subsidised: the industry enjoys exceptional marginal resources and water costs, which allow electricity to be sold below its actual cost,” says Saksing. The development of wind farms was hindered by restrictions from the Ministry of Defence. On 7 November 2019, the wind energy sector achieved a breakthrough. At the cabinet session, the government decided to make the necessary investments to improve air monitoring capabilities in northeastern Estonia so that wind farms could be built in Virumaa without height restrictions. “Today’s economy is largely chemistry-based. At the heart of such an economy is the extraction and recycling of mineral resources. The economy of the future is more physics-based, utilizing all the operating forces and renewable energy. For this purpose, new business models are created that define how we have been used to doing business so far. From an entrepreneurial perspective, this means generating revenue through change. Green technology
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is a relatively new industry, it just takes more time to compete with the old economy,” says Saksing.
Nice trend The co-founder of CHRG Network Rokas Danusevičius is happy with the trend that energy companies here in the Baltics are making efforts to attract new ideas to the energy sector. They organize start-up hackathons annually, which is a good method to match persisting problems in the energy field with fresh and innovative thinking. “I believe that the core problem with innovation is that challenges inside these huge organizations are being solved by the
same people. Sometimes these people are not motivated, sometimes they just don’t have time to follow all the new technology trends. The more you can open up internal challenges and attract new people to solve them, the faster you can innovate,” he thinks. What’s more, Contrarian Ventures partner Tomas Kėbla sees an acceleration in activity: more and more start-ups participating in local hackathons and accelerator programs, as well as approaching investors. “We are managing a Smart Energy Fund, where we look for early-stage companies innovating in the energy and electrified mobility sector. These specific areas were very underserved, and we thought it was important to promote a local ecosystem to bring out all these people with ideas to transform energy and mobility,” he says. Head of InnoEnergy Hub Lithuania Kęstutis Morkūnas thinks energy is very important, as it fuels (in many meanings) worldwide
“AS A START-UP, WE ARE TRYING TO FIND OUR WAY TO PREPARE FOR A NEW COMING E-MOBILITY MARKET. HOWEVER, UNLIKE BIG ENERGY COMPANIES, WE HAVE TO DO IT IN A SMART WAY AS, UNLIKE THE ENERGY COMPANIES, WE CANNOT HEAVILY SUBSIDISE TODAY’S ACTIVITIES,” THE CO-FOUNDER OF CHRG NETWORK ROKAS DANUSEVIČIUS
economies, but also impacts on our environment, both positively and negatively. “Having start-ups create, test and adapt innovations could be an easier and faster way to mitigate the negative impacts (i.e. Clean Air Challenge) rather than waiting for the big corporates to innovate by themselves. It is also critical to spread the knowledge and understanding of the cleantech field, its challenges and opportunities to the general public. Through STEAM orientation in schools, for example. On the other hand, some of the cleantech innovation is moving the world towards greener, healthier and more reliable technologies, like batteries and electrical vehicles, offgrid solutions for rural communities, biofuels vs coal, and so on,” he states.
Many good examples Asked to name the best examples in Lithuania from this field, Kėbla mentions Inion, Aerodiagnostika, In Balance Grid and PVCase. Danusevičius says there are not many start-ups in the field. He names PVCase and Inion working with solutions for the solar power panel sector. Hepta (Estonia) and Aerodiagnostika (Lithuania) both developed different types of drones and software analytics for power line inspection. There is also the FuseBox (Estonia) working system for managing and trading electrical flexibility. “Lithuania’s Ignitis has established a fund which is managed by Contrarian Ventures and is aimed to support early stage energy startups in the region,” adds Danusevičius. Morkūnas recognises that the entrepreneurship ecosystem is growing in Lithuania. There are changes that he would call “quality transformation,” where both startups and supporting activities are becoming more themed, focused and impactful. There are quite a few
“TALKING ABOUT THE THINGS THAT START-UPS CAN DO IN THE FIELD OF ENERGY AND WHY THEIR JOB IS IMPORTANT, I CAN MENTION TWO THINGS – THE SWITCH TO FOSSIL-FREE ENERGY AND ENABLING ACCESS TO CLEAN, ABUNDANT, RELIABLE AND AFFORDABLE ENERGY TO EVERYONE,” SAYS CONTRARIAN VENTURES PARTNER TOMAS KĖBLA.
initiatives on easing regulations: sandbox environments eased the brainstorming and development of cleantech, energy, climate change ideas and products. In 2018 and 2019, a number of EIT networks continued to operate or launched – EIT InnoEnergy, EIT Climate-KIC, EIT Urban mobility – opening doors to start-ups that are expanding internationally. This also brings wide-ranging opportunities, such as investments, expertise, networking and events. As the best examples in Estonia, Saksing highlights Roofit Solar Energy, Sol Navitas, Sphebotics, NeuRinko, Soltra SolarBook and SolarStone Energy in the solar energy field, PowerUp Fuel Cells in hydrogen energy, TUGE Energia and Northwind Engineering in wind energy, Fusebox, Smart Load Solutions, My Power Farm and GridIO in micro networks and digitization, demand and response, Hepta Airborne in power line monitoring and UBIK Solutions for power optimizers and microinverter solutions. He adds that most of the Estonian green technology and energy start-ups come from universities or are involved in university research.
“Energy, mobility, clean technology and smart cities are currently very topical issues. Companies in the business-to-business sector are the most successful ones,” says Liene Kuplā, manager of InnoEnergy Hub Latvia. As an example in Latvia, she cites Aerones which offers international technologies for cleaning and repairing wind turbines. There are also several other attempts to develop the business ideas of start-ups in areas such as wind farms, gasification systems, and power generation from recycled or renewable resources. There is also an emergence of IT companies specializing in the development of various solutions for artificial intelligence and machine reading in Latvia. “This promotes the chain reaction of new companies that use these technologies for other products and services. Examples are waste sorting solutions, deposit system solutions, and so on. Cooperation between several companies is currently very strong and positive,” says Kuplā. She adds that there was a rapid entry into the Latvian market last year for mobility solutions in the service sector – scooters and car rentals.
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However, technological solutions for mobility are a different matter, as they are not emerging so quickly. The world has heard about air mail services and food supply by drones, but it is too early to judge the longterm development of this area in Latvia. “Technology is exactly the place where we can develop and contribute to industry,” Kuplā says.
At the cutting edge Castaignet is sure that Estonia is at the cutting edge of smart grid technologies. Since 2011, the country’s electricity grid has integrated hardware and software to connect stakeholders in real time. It also has the world’s first nationwide EV charging network. That’s why it’s a very good place for R&D in distributed solutions and renewable energy. “The energy sector is growing within the start-up ecosystem, with more and more attention given to hardware and cleantech – an umbrella term which is used to define technologies that optimize the use of natural resources, produce energy from renewable sources, increase efficiency and productivity, generate less waste and cause less environmental pollution,” he says. According to Start-up Estonia, there are at present close to 1,000 startups in Estonia and 53 of them are in the cleantech sector. Despite its emerging nature, the cleantech sector in Estonia has already seen three successful exits – NOW! Innovations (2015), VitalFields (2016) and PlanetOS (2017). “In the cleantech sector, the most active and successful start-ups are the energetics-focused ones. Our company Skeleton Technologies is certainly one of the best examples, with 140 employees in Estonia and Germany, €60 million raised from private and public investors, including the European Investment
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and radical solutions to help these companies maintain a reliable supply of energy with ever-increasing demand, while also showing various ways to reduce carbon in these sectors,” he emphasizes.
Bank, and over €100 million worth of contracts signed. The idea is to help save energy and the means for this are ultracapacitors and full energy storage systems. One of the main competitors globally in the ultracapacitor market is Tesla, so the company is competing against big names,” says Castaignet. As one of the best examples from Estonia, Castaignet also mentions Comodule, who just received the Estonian Start-up Award 2019 for the hardware comet and the best revenue hack of 2019. The company offers an IoT solution for light electric vehicle manufacturers and fleet operators. In 2019, they built and launched their very own electronics factory capable of producing up to 60,000 telematics hardware units a month. Last year, they achieved 4.5-fold revenue growth and in the last 2 years, the company has grown from 18 to 60 team members. “Another interesting example is Roofit Solar, which produces metal roofs with integrated solar panels. They are rapidly growing and attracting international attention,” adds Castaignet.
The right attitude “The Estonian entrepreneurial attitude can help solve global challenges. It has been known for unicorns such as Skype, Transferwise and Bolt but it could become even more famous for tackling climate change. For our country, fighting the climate crisis could be the biggest business opportunity since the Internet revolution,” says Castaignet. Saksing highlights the fact that Estonia is the number one country in the ranking of unicorns per capita. It has a busy, supportive and open start-up ecosystem that is eager to aid ambitious individuals and start-ups. “In total, we have 110 organizations in Estonia, who
“IT’S PRECISELY THE PROBLEM OF REDUCING CO2 EMISSIONS THAT IS BEING TACKLED BY COMPANIES WORKING ON ENERGY, DIGITIZATION AND SMART CITIES. WE ARE THE ONES WHO NEUTRALIZE WHAT OTHER PLAYERS COULDN’T HANDLE,” MĀRIS SIMANOVIČS, NOT HOT ENVIRONMENTAL SOLUTIONS
provide a wide range of services for start-ups. These new entrepreneurs create innovation, also in the areas of environment and climate change. If we take energy more broadly, most green technology and smart city businesses are involved. In one way or another, they improve energy efficiency. Thus, micro mobility, for example, and electric vehicles would also be suitable here. There are not many start-ups that are directly related to the energy sector. This is probably the reason why the largest players in the energy field have created the programs to activate
start-ups in the energy sector and offer solutions to the challenges they are facing,” he explains. Saksing adds that the large energy companies often understand the field but they are slow in their processes and lack the ability to be agile in terms of finding new solutions and looking at things from a different angle. Bringing startups closer to energy corporations enables both to learn and unlock their potential,” states Saksing.
Innovative and radical solutions Talking about the things that startups can do in the field of energy and why their job is important, Kėbla mentions two things – the switch to fossil-free energy and enabling access to clean, abundant, reliable and affordable energy to everyone. “Their job is important because most incumbents are facing a very rapid transition from their traditional business models, and are playing catch-up to maintain their relevance. The start-ups can provide the kind of innovative
Danusevičius is sure this decade will be very challenging for all energy companies as they will have to make big changes in energy production due to ever increasing CO2 emission restrictions. At the same time, they will have to reinvent their relationship to customers. “In this decade, customers will turn from energy consumers to energy prosumers who not only buy energy, but also produce it on their own, return it to the grid or even sell it to neighbours via EV charging stations. The big challenge is how to integrate all the systems and create new convenient front end tools to serve customers. This is where opportunities for start-ups come in. Start-ups can work together or even compete with energy companies,” he says. Not Hot Environmental Solutions founder Māris Simanovičs believes that both start-ups and existing market players can make a major contribution to the energy sector if they are willing to work together to make Europe a climate-neutral continent by 2050. The important thing is to find fossil fuel substitutes, IT solutions and solve transport problems, as well as reduce pollution and congestion in the cities. However, the project manager of GDOG SIA, Silvija Reņģe, believes that the activities in this area are more theoretical than practical. “We also see that the funds invested are not always well spent. For example, what is the point of setting up a smart electricity meter if the data is not read remotely anyway? Or an energy management system is implemented
in part, but practically no one works on the resulting data, analyzes it and makes adjustments,” she claims. Reņģe adds that new companies must act wisely and sensibly so that the introduction of new products in the energy sector does not ultimately lead to an even higher energy and resource consumption. Saksing is sure that there are tremendous amounts of new opportunities in traditional areas. In particular, the decentralization of central systems is one of the areas that should be observed in the development of green technology. Energy savings, energy efficiency in buildings, alternative energy sources, energy use, food production, recycling of materials, transport and logistics bring along many new opportunities. “In all of these areas, science-based businesses are gaining momentum, where smart entrepreneurs help to fund scientific inventions. The main task is to move from fossil fuels to the use of new, alternative energy sources. The main goal is to make the environment cleaner and reduce the carbon footprint,” he says.
Not without challenges “Rapid development is a challenge for all players in the industry. In the past, the development of a new technology took years and even decades, but nowadays a new company must be able to develop and launch a new product as quickly as possible when everything is changing rapidly around them. There is also plenty of competition between start-ups because there are many support options and therefore the opportunities to develop your business idea or technology are great,” says Kuplā. Kėbla argues that the biggest challenge for start-ups is access to the
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“In Estonia and in the Baltics in general, most of the R&D work is in the public sector. In successful countries such as Japan, South Korea or even Germany, most development is in the private sector. Private sector R&D must therefore be strongly encouraged through equity and loans, in order to expect a return on investment, which can be re-invested in the future. In the cleantech sector, there is a higher risk/reward ratio. Your risks are much higher, and you invest much higher sums because you need a lot of R&D, you need hardware, but the rewards are also significantly greater,” explains Castaignet. Morkūnas says that starting as a hardware or hardware-related start-up is much more difficult as prototyping and capex costs are much
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higher compared to IT, where mockups can be done and validated much faster. Also, there are very few (or very well hidden) people and mentors who can assist energy start-ups with industrial prototyping, design, and market validation questions.
Photo: Ritvars Skuja, publicity photos
required infrastructure and asset or customer base to test and prove that the concept works. In his experience, the sector is not very open, as most of the operations involve critical infrastructure often at a national level or privacy concerns in terms of the required data. He believes that the second-largest challenge is long sales cycles when you have a proof of concept or even a working solution. The companies in the sector have to maintain a technical standard for any implementation of new solutions, and furthermore, the largest potential customers in Europe also have to guide these solutions through a public procurement process. What start-ups can do is make sure to prepare the required homework on potential customer needs and the right stakeholders, so that they save time on these challenges. “We are successfully working with our LP for the third year, helping these start-ups by fostering access to pilot and test their solutions, as well as guiding them to the right challenges that they could solve,” says Kėbla.
Innovations ask for capital Castaignet thinks that attracting investments is definitely a challenge for start-ups in the energy field. “Access to public support for innovative companies must be made more agile and simplified to foster the success of European champions. Funding mechanisms from European programmes through institutions such as InnoEnergy and ClimateKIC are particularly important and we have great expectations from the EU Green Deal. The first figures are impressive: at least €1 trillion in sustainable investments will be made over the next decade. Given that our economy is currently based on carbon, it will be a tectonic shift in the way our society and economy are structured,” he says, adding that The European Green Deal has to prioritise access to financing if we want to create European champions. As an example, Castaignet mentions Tesla which really took off thanks to a $465 million government green energy loan provided in 2010 to develop its electric cars. To put this into perspective – after receiving the loan, they raised only $220 million from their IPO. With help from the loan, Tesla expanded its production facility in Fremont, California, and launched the Model S sedan in 2012. Tesla’s market value is now more than Ford and GM combined. Furthermore, Danusevičius thinks that the challenge for every startup is access to capital. “If you build a solution that is not scalable, you may face problems raising capital from private funds. On the other
“ENERGY, MOBILITY, CLEAN TECHNOLOGY AND SMART CITIES ARE CURRENTLY VERY TOPICAL ISSUES. COMPANIES IN THE BUSINESS-TO-BUSINESS SECTOR ARE THE MOST SUCCESSFUL ONES,” SAYS LIENE KUPLĀ, MANAGER OF INNOENERGY HUB LATVIA.
hand, some European funds are keen to support solutions that help to reduce CO2 emissions. Another challenge is that start-ups may have trouble accessing infrastructure or systems owned by energy companies. You may also find yourself in a difficult situation if your only customers are from the energy sector. You may need to have a big ‘cash pillow’ as decision-making may take a very long time,” he argues. What’s more, Saksing sees a challenge in the fact that new solutions in the energy sector require high
investments and close study. “To create something new that works without errors takes time. And as the technology for oil shale production has been evolving for more than 100 years, it is rather convenient to continue using it. Nevertheless, the era of new energy production is here, and the big corporations have no other option than to welcome it and cooperate,” he says. The expert adds that the main goal of new energy production is to reduce the impact of human activity on the environment and to improve the environment as a whole. At the same time, old business systems are so optimized and largely subsidized that new technologies cannot succeed on a large scale. Morkūnas says that although many ideas are generated each year at universities, hackathons, events, and so on, very few of them get to grow into prototypes, products and sales. In many cases, the key is a lack of early-stage funding. “The venture or idea is too “green” or too “pre-sales” for the local venture capital companies, and governmental support is sometimes too slow and too bureaucratic to make a real impact,” he believes.
Controlling the power consumption The Latvian company SIA GDOG has developed energy monitoring devices that control power consumption in Latvian and Estonian companies. “Our company has developed both innovative energy saving devices and indoor air quality control – CO2 measuring devices for a wide range of consumers. They are the measuring devices needed in every manufacturing company, office and school to enable a greener, more economical and healthier life. Monitors allow remote tracking of power consumption to the minute
with detailed data for different periods of time and consumers, and can be stored for several years. Companies using our power monitors have saved the direct costs of power consumption, and have also uncovered useless power consumption, faulty engineering networks, optimized production processes, reduced costs and overall resources,” says Reņģe.
Prepare for a new coming market Lithuania’s CHRG Network is an e-mobility provider and has developed a SaaS platform which helps facilitate communication, remote control and payment processing for EV charging stations. “We provide a tool (software system) for any station owner, regardless of whether they are private persons, a company or even a large utility to provide an EV charging service,” says Danusevičius. Although e-mobility is still in the early days of development in the Baltic countries, the biggest electric energy companies in the Baltics are already actively preparing to take over a large share of the market from petrol distributors. “F.e. Ignitis (ex Lithuanian energy) has invested over €2 million to build 60 fast-charging stations in Vilnius alone. In Lithuania, we have less than 1,400 EVs registered today. Such investment is overly sufficient for today’s need and is not yet commercially viable. However, with this and a few other projects in the pipeline, they are preparing for the coming transition in the transport sector. Latvia’s Elektrum and Estonia’s Enefit are also actively preparing for this. As a start-up, we are trying to find our way to prepare for a new coming market. However, unlike big energy companies, we have to do it in a smart way as,
unlike the energy companies, we cannot heavily subsidise today’s activities,” says Danusevičius.
The trees come to the rescue The NOT HOT Tree Planting movement brings individuals and companies together to plant as many trees as possible in the future to absorb CO2 emissions. The company offers to calculate and offset the emissions of nothot.org by purchasing a tree-planting service. Not Hot has already planted more than 1,600 plants which, according to the Latvian state forestry research Silava, will absorb an estimated 480 tons of CO2 emissions over the next 40 years. Tree plantations will be established in areas where there were previously no forests, thus increasing the forest area. “We have seen attempts to offer similar services in Latvia, which shows that environmental protection and maintenance issues are becoming increasingly topical in Latvia too. 20 and even 10 years ago people laughed at the concept of “waste sorting”. Today, our daily communication includes phrases and concepts such as environmentally-friendly packaging, a waste-free lifestyle, energy efficiency and more. Planting trees is the best and most obvious way to neutralize CO2 emissions. But remember that planting trees will not save the world. To begin with, each of us must minimize the amount of emissions we produce and use trees to offset only what is otherwise impossible to reduce. And it’s precisely the problem of reducing CO2 emissions that is being tackled by companies working on energy, digitization and smart cities. We are the ones who neutralize what other players couldn’t handle,” says Simanovičs.
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foremost centre of education and research. Tartu University has been the alma mater of all but one of Estonia’s prime ministers so far, but is also increasingly known and recognized internationally – it is ranked among the top 400 most reputable universities in the world in two prestigious university ranking systems. It has achieved remarkable research results in several fields throughout the centuries. Alongside Tartu university, there are 10 more higher education institutions, as well as numerous research institutions and organisations that promote science. In total, more than 16,000 local and roughly 1,000 foreign students are enrolled there to learn the enterprising, practical and forthright Estonian mindset. In turn, the students form an essential part of the city’s vibe, which is best described as easy-going and laidback. Estonians call it the special Tartu vaim (spirit) that is also created by the time-stands-still feel of its wooden houses and stately buildings, and the beauty of its leafy parks and riverfront.
Estonia’s smart city Estonia’s intellectual and cultural centre, and home to the country’s oldest and most renowned university: Tartu combines academic tradition with youthful student energy. Close connections between business and science also make it a top location for entrepreneurs. by ALEXANDER WELSCHER
d
Economically, however, Tartu often remains in the shadow of Tallinn. In 2018, two-thirds of the Estonian gross domestic product (GDP) was created in the capital and the surrounding
Spring 2020
Good concepts and business have been implemented rapidly, and not just the physical distances in the city are short. “The city authorities are always prepared to think along with the entrepreneurs and offer flexible options”, says Klaas. To support the approximately 16,000 businesses registered in the city as well as new forms of entrepreneurship, many cooperation, support centres and incubators have been created. Indeed, Tartu has served as a starting point for several global technology companies and developments. The information technology and electronics
Hanseatic heritage and academic tradition Historically, Tartu was an important merchant town in medieval times. In the 1280s, the city then known as Dorpat became a member of the Hanseatic League and evolved into a flourishing city of commerce on the border of western Europe and Russia, along the trade route of Pskov and Novgorod. It then played a major role as an entry point for the majority of the Russian goods bound for Riga. To honour this legacy, Hanseatic Days are celebrated annually in Tartu – also on and along the Emajõgi river. Not least because, ultimately, it was the river that determined the status of Tartu as a Hanseatic town all those centuries ago. Still, most of Tartu’s identity is focused around the university. The Universitas Tartuensis is one of the oldest universities in Northern Europe. Founded in 1632 by the Swedish King Gustav II Adolf, it is Estonia’s
When they are not being Bohemians or enjoying the vibrant nightlife in the cafés, restaurants and bars nestled across a couple of streets around the
However, this might only be the beginning. Tartu University has just opened the Delta Centre, one of the most modern centres for digital technology, analytics and economic ideas in the Baltics. The complex consists of two buildings: one for academia and research and one for entrepreneurship. They will bring together more than 3,000 students, lecturers, researchers and development employees from different companies.
Balance between past and future Another hub of creativity and one of the fastest growing areas in Tartu is the Widget Factory (Aparaaditehas) – an old factory complex that has been developed into a upbeat and pulsating hotspot. During Soviet times, the factory was
used for manufacturing refrigeration equipment, secret submarine parts and – in order to mislead the public – also non-functioning umbrellas and zippers. Nowadays, it brings together creative entrepreneurs, artists, designer studios, commerce and entertainment in a post-industrial environment. The communist legacy of Tartu is also visible in the old Soviet apartment blocks in the downtown area. Nicknamed after Soviet Premier Nikita Khrushchev, these ‘khrushchyovka’ buildings were created from the 1950s onwards as temporary housing. In an ambitious pilot project that goes beyond the usual retrofitting, around 20 of these uniformly designed buildings are now being turned into energy-efficient and modern houses with smart home systems. In addition to ‘smartovkas,’ the EU-funded smart city project will also entail innovative solutions in district heating, transport, street lighting and renewable energy use. Numerous smart solutions, such as mobile parking, electric taxis and a spray-printer popular in street art, have already originated from Tartu – a city that combines a modern infrastructure with a green and friendly environment.
ESTONIA’S NO. 2: TARTU IN FACTS & FIGURES
Photo: Tartu City Government / Timo Arbeiter, Līva Melbārzde
oes size really matter? Tartu might only be Estonia’s secondbiggest city but it is easily the first in terms of brainpower and intellectual capacity. Located around 180 kilometres south of the capital Tallinn, the old university town is considered the cultural and spiritual heart of Estonia. Tartu was the cradle of the national awakening of the Estonian people. Art, literature and theatre have played a major role ever since in the city with a population of around 97,000. It is the birthplace of the Estonian song festival laulupidu, the Estonian theatre and basically also the Estonian state. Just in February, the 100th anniversary of the signing of the Tartu Peace Treaty, which is regarded as the birth certificate of the Republic of Estonia, was celebrated with a grand programme.
Harju County, while Tartu’s share stood at a mere 10%. Although it doesn’t have the size, pace and efficiency of Tallinn as a business location, the riverside town still offers a competitive environment for doing business. “In Tartu, every company can find brilliant partners from the world of science,” says the Mayor Urmas Klaas and praises the “excellent business climate” in his town which is the main economic centre of South Estonia.
sectors are quickly evolving in the city, bringing together several large and successful companies and many start-ups, such as Playtech, Fortumo, Click & Grow and Mooncascade. All of them have benefitted from the close connection between business and science in the town, which boasts a long heritage as a trade centre.
Town Hall, the students are usually hard working. This is apparent in the impressive number of university spin-offs – in 2018 there were 55 of them with an annual turnover of €39 million. Over the past decade alone, 33 new companies have been added, creating new business opportunities and high-tech jobs in the region.
Another hub of creativity and one of the fastest growing areas in Tartu is the Widget Factory (Aparaaditehas)
almost 100,000: Tartu has 99,631 inhabitants (as of 2019) student town: Tartu is home to more than 16,000 students who make up almost a fifth of the population the oldest one: Tartu was first mentioned in 1030 in written sources by chroniclers of the Kievan Rus, making it the oldest city in the Baltics name changes: Tarbatu, Dorpat, Dorpt, Dörpt, Derpt and Yuryev are all former names of Tartu and reflect the tumultuous history of the city European capital of culture: in 2024 with the leitmotif ‘Arts of Survival’ sTARTUp Day: the largest start-up festival in the Baltics annually brings startupminded people together to celebrate entrepreneurship Scientific excellence: Tartu University has produced many eminent scientists and reputable scholars such as the Baltic-German biologist Karl Ernst von Baer National heritage: Who are Estonians? And why are they the way they are? Get some answers at the impressive Estonian National Museum one-for-all: Vanemuine is the only theatre in the Baltics that performs all genres: plays, operas, ballets, operettas and musicals lifeline: Estonia’s only fully navigable river Emajõgi crosses Tartu for 10 km with promenades, hiking paths and seasonal cafés along the waterfront Pisa Tower of Tartu: Tilted to one side due to discrepancies in the original foundation, the ‘Leaning House’ is Estonia’s answer to the famous Italian tower Spring 2020
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Lindner meets Estonia
Photo: Ingrid Fiebak Fotografie, www.Lindner-Group.com
For many decades now, there are neither technical nor geographic limitations for our projects at the Lindner Group. Time has come to cross borders – also for gaining new business partners. The goal: to find new, reliable and long-term business partners for our projects all over the world.
and financially strong partner. Lindner is and will remain an extraordinary and unconventional family business through and through.
Networking with Estonian partner companies
we
organised an information event, on behalf of and with the sponsorship of our business unit Interior Fit-Out and Furnishings and in close cooperation with Enterprise Estonia as well as the German-Baltic Chamber of Commerce. Based on our motto “Lindner Meets Estonia – Networking with Estonian Partner Companies”, we invited local companies specialised in ship fitout, interior fit-out, door, furniture and metal construction to Tallinn, the capital of Estonia. Due to the great interest and the very large response we received, the event took place on two consecutive days. In addition to the introduction of the Lindner Group and the business unit Interior Fit-Out and Furnishings, we also presented our procurement process to the companies. To gain an insight into the requirements of employees posted to Germany, we arranged a presentation held by the German-Baltic Chamber of Commerce. Mrs. Aet Bergmann, regional president of the Chamber of Commerce, sensitized the participating companies for the legal requirements and special features concerning employment in Germany.
Winter 2020
During an open exchange, the participants had the possibility to receive further details and information about potential cooperations. This opportunity was seized and there have already been fruitful conversations about possible cooperations in the near future. The successful event was complemented by two interesting production visits: We followed
Lindner Interior Fitout and Furnishings for customised interiors
the invitation of a manufacturer of wall and floor claddings made of real wood, as well as the one of a door manufacturer. In both cases we could convince ourselves of high quality standards. We received very positive response for our event „Lindner Meets Estonia“ from all sides. The foundation stone for long-term and successful business relations has been laid.
“We attended Lindner meeting in Tallinn and for us it was an interesting opportunity and we were/are eager to find out more. Two different companies were represented. The event was organized well and we got a good overview of the company Lindner in general. We found this kind of networking event useful and our expectations were met. Since already partly familiar with Lindner from one of our projects, it was very interesting to meet the company representatives themselves and speak to them directly. I personally did feel that a good cooperation between our companies will be possible. Mutual interest was there for both of the companies represented in the meeting about the production and building sector. I see this as a good opportunity to network with people in the industry, also among Estonians. Some subjects like legal questions in Germany could have been discussed more detailed since for the Baltic companies those are the most complicated questions to overcome.” (Priit Urm, Project Manager, Archouse OÜ) “Thank you very much for the good meeting, both at Thermory factory as well as the event next day. Your concept of organising this event was very efficient and enabled quick and good understanding and fast networking possibility for everyone. I would like to compliment the way the whole event was organised, it was really professional and you left a good impression about the Lindner Group, the scale of business you do and the value the cooperation could bring.” (Katrin Reinaste-Parve, Sales Director/Exteriors, Thermory AS)
The Lindner Group
The Lindner Group is one of the leading companies for the building envelope, interior fit-out and insulation. Our comprehensive range of disciplines as a fullservice provider for nearly all applications is unique.
We are a strong team of motivated colleagues who continuously work on more than 2,500 customer projects every day. We enjoy our work and we are proud of our capabilities – there is no such thing as “We can’t”! That’s what our customers appreciate. Our headquarters have been located in Arnstorf, Lower Bavaria, since 1965 and stand for the company’s stability and growth at the same time. With the success of our business, the Arnstorf site has been expanded to about 200,000 m² through the addition of several production and office buildings. With more than 7,500 people overall, the Lindner Group is the largest employer in the district Rottal-Inn and also one of the largest companies in the region of Lower Bavaria. We are well-known as a solutionoriented, technically skilled, reliable
Lindner AG | Interior Fit-Out and Furnishings comprises five main business divisions: Interior Fit-out and Furnishings, Ship Fit-out, Hotels and Resorts, wooden doors and CAS rooms. The division’s particular strengths lie in timely and interfaceoptimised implementation of even the most extraordinary drafts, always in close cooperation with clients and architects. Experienced specialists ensure a seamless process from planning to production and implementation on site. The well-equipped production facilities in Arnstorf, Madunice (SK) and Ostrov (CZ) are a key factor for the successful implementation of individualised interior fit-out projects. Lindner AG | Interior Fit-Out and Furnishings is a partner with many years of experience, supporting its clients in every phase of their project. Specializing in customised interior solutions, Lindner always finds the best solution according to the customer requirements. For more information please visit www.Lindner-Group.com
Winter 2020
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FAIR TO SHARE
boot Düsseldorf
Reet Truuts Representative of Messe Berlin GmbH in Estonia
Leading water sports trade fair and boat show worldwide
6 tips for an efficient visit to a fair
Time for a revolution
You should plan your attendance carefully in advance. The first step is to ask yourself some questions.
What type of fair is it?
• Is it an international or a local fair? • Which products and people does it represent? • Is it a major event in the sector? • Are there professionals only or are consumers also present? • What exactly do you want to find out at the trade fair? • Who do you want to contact? • What are your goals, e.g. the number of new contacts?
Avoid time loss
Many fairs last several days and you might want to avoid certain days. Also, if you register in advance, your badge may be cheaper than purchasing it on the day of your visit.
Plan who to visit
Check the fair’s website for the plan and exhibitors. Set up meetings in advance by using the provided appointment setting systems or by contacting people personally. Try to keep distances short. Visit exhibitors in turn in the same hall. Set up a schedule. Ensure you have the mobile phone number of your contact partners. Attending relevant events besides the fair adds value to your visit. They give additional visibility to attendees, companies and products.
Be dressed for the occasion
At a professional fair, it is best to be dressed with your professional attire to convey
Spring 2020
the right image. One item is crucial: comfortable shoes. Most of the day you will be walking or standing. Don’t forget the usual items (business cards, pens, paper etc.). A business trolley is helpful too, as the weight of the case increases during the day. Use your smartphone to write notes, take pictures and use the fair’s mobile app.
With the right mindset
In case you see your current clients or suppliers, be updated with the latest news from your file. When approaching a new partner, don’t forget the important aspects of presentation, first impressions, etc. – everything you need to make this first encounter a fruitful one. Finally, a trade fair is a big event and should be well planned. But you should allow yourself to deviate from your plan. Trade fairs are places of discovery. Use them as such. To stay efficient, remember to eat and drink enough and take some rests.
Follow-up evaluation
After your visit, think about how to use the information you collected. Get in touch with your new contacts as soon as possible and arrange further joint steps, if necessary. When quantifying success, remember that trade fairs have a long-term impact and bring many benefits besides generating contacts and turnover.
Frankfurt has been home to one of the world’s largest and most important auto shows for nearly seven decades. The Internationale Automobil-Ausstellung (IAA) has played a decisive role in shaping the development of the automobile. In the process, it has reinvented itself again and again. But in the end, only 560,000 visitors came to the IAA. Despite their great economic importance, the car and the entire industry face constant media criticism in Germany. In addition, many major automakers focused on events in their home markets. In 2017, for instance, Nissan, Infiniti, Mitsubishi, Peugeot, Fiat, Jeep and Volvo all steered clear of the IAA. So, after almost 70 years, the IAA is leaving the metropolis on the river Main. Frankfurt is thus not only losing Germany’s most visited trade fair, but also a figurehead and a tourist magnet for the city. But the show must go on. Germany will still have its biennial auto show, but it will be hosted in Munich. Munich has the second largest airport in Germany, but is impractical to reach by train due to its southern location. On the other hand, the trade fair grounds are a good 200,000 m² in size and modern. BMW has its headquarters there and Audi is also not far away. Technology companies such as IBM, Infineon, Microsoft, Amazon and Siemens are also located here. According to the VDA, the intention in Munich is to turn “the city centre and highly attractive locations close to the city into event venues for the IAA”. However, not only the location, but also the concept of the classic car show came in for criticism. It is losing importance from the manufacturers’ perspective too. Car companies are developing into mobility companies that focus on electric drives. In addition, consumer electronics are playing an increasingly important role inside the car itself, opening up attractive new business concepts for manufacturers. As a result, both manufacturers and VDA are already looking for new concepts. With the IAA 2021, the show is transforming itself into the leading international mobility platform and a sustainable urban project. “As a technology and strong industrial location, and the headquarters of numerous –ORGANIZED BY– high-tech groups, start-ups and THE GERMAN ASSOCIATION research institutes as well as OF THE AUTOMOTIVE innovative companies in the INDUSTRY (VDA) automotive industry, Munich is an excellent partner for the – WHERE – reorientation of the IAA”, said MUNICH TRADE the VDA. It will be interesting to FAIR CENTRE see what the IAA 2021 brings. – WHEN – In any case, autumn 2021 will surely feel a lot different – in SEPTEMBER 7-12, 2021 Frankfurt and in Munich.
Estonian maritime industry gains attention
f
or the 6th time, Estonian companies participated with a joint stand at the world’s leading boat and water sports fair boot Düsseldorf, which took place in Düsseldorf from 18 to 26 January. The fair brings together a quarter of a million maritime enthusiasts and key players in the maritime industry from all around the world. Ten companies participated in three different halls. As a world premiere, the Estonian companies launched the sailing boat H-Boat, while five motorboats for rescue or water tourism and electric generators with hydrogen fuel cells were also presented. Estonian stands include boat bridges, small harbours of Hiiumaa and boat rental service providers. The Visit Estonia team presented Estonian tourist areas. The Director of the Tourism Development Centre, Margus Sameli, stressed Estonia’s strong potential as a water tourism destination and its growing reputation as a boat-building country – both complement each other perfectly. “Our network of small ports is well developed and we have many tourist attractions related to water tourism. We are sending a clear message to the Düsseldorf fair: Estonia is a full-fledged lake country and one of the leading destinations
for water tourism in Northern Europe,” said Margus Sameli. Anni Hartikainen, a board member of the Estonian Maritime Industries Association, confirmed that the maritime industry will continue to grow. “Our companies are striving for higher added value in the value chain. Estonia has built a mutually supportive and focused maritime industry, which has become an innovative and reliable partner through its consistent work. The owner of Saare Yachts, Thomas Nielsen, said that the Düsseldorf fair was an important marketing event for the company and for the whole European boatbuilding industry. “The Estonian joint stand enabled us to participate in this fair with three yachts for the first time. This offered us an important opportunity for growth. With our yachts, we present Estonia as a provider of innovative and functional solutions”, said Thomas Nielsen. boot Düsseldorf is Europe’s largest water sports and boat fair, and it took place for the 51st time this year. Boot 2020 has made a brilliant start to the new decade with a hugely successful event. Visitors were enthusiastic about the wide-ranging program and the enormous range of products and services provided by the more than 1,900 exhibitors in the 17 halls at the exhibition site.
EXHIBITORS: boot 2020: 1,900 VISITORS: 250,000, from 106 countries INDUSTRY SECTORS: Boats and Yachts, Engines and Related Equipment, Shipping / Yachting Equipment and Accessories, Canoes / Kayaks / Rowing Rafting (Accessories and Services), Water-Skiing / Wakeboarding / Kneeboarding / Wakeskate, Jetskiing, Diving, Surfing / Windsurfing / Kitesurfing / Parasailing / Stand-Up Paddling, Fishing, Maritime Art / Handicraft INTERVAL: annually
Exhibitors from Baltic States Estonia: Enterprise Estonia, Alunaut OÜ, Eysysla Yard OÜ, PowerUp Cells OÜ, Top Marine OÜ, TS Marine OÜ, Veega Grupp OÜ, Water Mate Boats OÜ, Saare Yachts OÜ, Nord Sail Grupp OÜ, Hiiumaa Sadamad SA, Visit Estonia, Yacht Trans OÜ Latvia: Autoterm SIA, East Baltic Coast Kurzeme Planning Region Lithuania: Marex Boats UAB, Baltic Sea Heritage Rescue Project, Memel Werfte, IT Muzika, Inter Corpora Boats UAB
boot Düsseldorf January 23-31, 2021 www.boot.com
The organization of the Estonian joint stands is financed by the European Regional Development Fund.
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Many trade fairs cancelled and postponed in spring - summer and autumn promise to be rich in exhibitions
CANCELLED EXHIBITIONS
This year for trade fair industry starts unusually. Several international exhibitions and conferences have been cancelled or postponed due to the coronavirus outbreak. While the virus hit the Asian market, there was no immediate threat to business in Europe. But as a result of the coronavirus outbreak in Italy, several trade fair organizers in Europe were forced to make quick and difficult decisions about the closure or relocation of international exhibitions.
ITB BERLIN / ITB-BERLIN.COM
The long list of trade fairs that were supposed to take place in the spring, in fear of the coronavirus, are being moved to summer and autumn, but not all dates have been fixed yet. AUMA provides up-to-date information on postponements and cancellations of exhibitions in its exhibition database at www.auma.de/Date-changes. As soon as we become aware of changes, the data will be updated. Further information on trade fairs in Germany and abroad can be obtained from the respective organizer.
C U R R E N T
COMMAND CONTROL / COMMAND-CONTROL.COM
EuroShop
INTERNATIONALE HANDWERKSMESSE / IHM.DE
The World’s No. 1 Retail Trade Fair
LOPEC / LOPEC.COM PROWEIN / PROWEIN.DE POSTPONED EXHIBITIONS T WENT Y2X 23.-25.06.2020, HANOVER / T WENT Y2X.DE INTERNORGA 20.-24.06.2020, HAMBURG / INTERNORG A.COM HANNOVER MESSE 13.-17.07.2020, HANOVER / HANNOV ERMESSE.DE IFAT 07.-11.09.2020 MUNICH / IFAT.DE BEAUT Y DÜSSELDORF 18.-20.09.2020, DÜSSELDORF / BE AUT Y.DE ANALY TICA 19.-22.10.2020 MUNICH / ANALY TIC A.DE WIRE & TUBE 07.-11.12.2020, DÜSSELDORF / WIRE.DE / TUBE.DE ENERGY STOR AGE EUROPE, DÜSSELDORF / ESEEXPO.DE For more information please follow the individual exhibitions websites or our local trade fair websites: messid.de, izstades.de, parodosvokietijoje.lt
T R A D E
F A I R
O V E R V I E W
TR ADE FAIR
INDUSTRY
2021-2022
21.-23.04. BERLIN
DMEA
Connecting Digital Health DME A.DE
MEDIC AL ENGINEERING
04.-06.05.2021
24.-26.04. HAMBURG
International trade fair for equestrian sport HANSEPFERD.DE
HANSEPFERD HAMBURG
SPORTS, ANIMAL S, ANIMAL BREEDING, VETERINARY
04 / 2022
07.-13.05. DÜSSELDORF
World’s leading fair for process and packaging INTERPACK.DE
INTERPACK
PACK AGING MACHINERY AND MATERIAL S
05 / 2023
13.-17.05. BERLIN
International Aerospace Exhibition IL A-BERLIN.DE
IL A BERLIN
AEROSPACE INDUS TRY
05 / 2022
COMPUTER-AIDED ENGINEERING, FAC TORY AUTOMATION
06 / 2022
SAFET Y, DISA S TER CONTROL
06 / 2025
DRUPA
PAPER AND PRINTING INDUS TRY
06 / 2024
T WENT Y2X
INFORMATION AND COMMUNIC ATION TECHNOLOGY, SOF T WARE
03 / 2021
World’s leading trade fair for water, sewage, waste and raw materials management IFAT.DE
IFAT
CIT Y SANITATION, WATER TECHNOLOGY, WASTE DISPOSAL, ENVIRONMENT AND CLIMATE PROTECTION
05 / 2022
OUTDOOR BY ISPO
SPORTING GOODS
20.-23.06.2021
15.-20.06. HANOVER 16.-26.06. DÜSSELDORF 23.-25.06. HANOVER POS TPONED / NE W DATE
04.-08.05. MUNICH
AUTOMATICA
Leading trade fair for smart automation and robotics AUTOMATIC A-MUNICH.COM
INTERSCHUTZ
World’s leading trade fair for the fire and rescue services, civil protection, safety and security INTERSCHUT Z.DE World’s leading fair for printing technologies DRUPA.DE
The Digital Future of the SME Sector T WENT Y2X.DE
28.06.-01.07. MUNICH
Europ’s largest outdoor trade fair ISPO.COM/OUTDOOR
13.-17.07. HANOVER
The world’s leading trade fair for industrial technology
POS TPONED / NE W DATE
HANNOV ERMESSE.DE
Spring 2020
HANNOVER MESSE
AUTOMATION, MOTION & DRIVES, ENERGY SOLUTIONS, ENGINEERED PARTS & SOLUTIONS
Eye-Catching Design METAWOOD brings seven-dimensional view of art, design and innovation to EuroShop
2020
16.-19.05. MUNICH
EXHIBITORS: 2,300 VISITORS: 94,000 from 142 countries INDUSTRY SECTORS: Retail Trade Fair INTERVAL: triannual
12.-16.04.2021
t
he World’s No.1 Retail Trade Fair, EuroShop 2020, drew to a close on 20 February 2020 after five successful days in Düsseldorf: 2,300 exhibitors from 57 nations reported very good leads and concluded business deals. Furthermore, some lively follow-up business is expected. 94,000 visitors travelled to the Rhine to gather information on the lineup of products, trends and concepts for retailers and their partners featured in 16 exhibition halls. At this year’s EuroShop 2020 Retail Trade Fair in Düsseldorf, we were proud to welcome 19 Lithuanian exhibitors. Our exhibitor METAWOOD was a special eye-catcher at EuroShop, as they were represented with a very impressive booth design to show themselves at their best. Moreover, METAWOOD is a fullservice store fixture manufacturer, providing innovative solutions to the retail industry and it offers a unique perspective on the elements that contribute to one-of-a-kind design and architectural experiences with the 7D project, including seven dimensions: dedication, development, details,
design, dream, drive and destiny. Based on nearly two decades of shopfitting for some of the best-known brands in fashion, perfume, jewellery and cosmetics, 7D celebrates the creativity and attention to detail that defines excellence in the luxury retail sector. Mikhail Rositsan, METAWOOD President, said that, “Through our presence at EuroShop 2020, we will inspire young artists, designers and architects to take a look at the world from a 7D perspective.” With their luxury booth, the company showed visitors an exclusive example of first-class engineering ingenuity combined with careful selection and the use of the finest materials. EuroShop 2020 offered METAWOOD an opportunity to reinforce the importance of maintaining an outstanding in-person experience in luxury retail, even amid the face of digital transformation. As Mikhail Rositsan said optimistically, “No matter how the retail sector changes, we need to stay true to the elements of creation and lines of expression. This is to cultivate a spirit of imagination that will continue to compel consumer interest and loyalty”.
Founded in 2003, METAWOOD creates high-end stores around the world through a range of services that include architectural design, engineering, production, project management and installation services. Their team’s unparalleled expertise in millworks, shop furnishings, store design exterior and interior has made METAWOOD the trusted partner for world-class companies operating across all continents
Exhibitors from Baltic States: Estonia Emerson Ten Oü, Forte Group OÜ, Nordic Plast OÜ, Piar OÜ, Volume Design OÜ Latvia Baltic Exposervice SIA, CHD Europe SIA Lithuania Admen Baltic UAB Altum Retail UAB Event Technology Solutions UAB Flexpro UAB FREOR LT UAB IDW UAB International Display Works LANKSTI LINIJA UAB Lazertechas Ltd, METAWOOD Metalas ir mediena UAB Northcliffe Lighting UAB Paper Fantasies UAB Politeca UAB SRS servisas UAB UAB BAGFACTORY UAB Ekspoziciju centras, REFRA UAB Leddex Ltd.UAB, Litpolstar UAB Shakespeare Music UAB
EuroShop February 2023 www.euroshop.de
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Being accountable under GDPR data processing agreements with processors and joint controllers, having data registers in place, carrying out data protection impact assessments and recording and reporting personal data breaches.
by ELĪNA MUCIŅA, PARTNER. TAMBET TOOMEL A, PARTNER. RIMTIS PUIŠ YS, PARTNER. E V ER SHEDS SUTHERL A ND BA LTIC S
t
he General Data Protection Regulation (GDPR) introduces the principle of accountability as one of the key data processing principles. While time will show the specific expectations of supervisory authorities as regards the accountability, the existing trends of personal data processing practices, guidelines of the European Data Protection Board, an institution consisting of representatives of EEA data protection authorities (EDPB), and identified GDPR infringements show that it should not be missed.
Principle of accountability
What does it mean to be accountable in the context of personal data? The GDPR, Article 5(2), explains it as an obligation of the controller to be responsible for and be able to demonstrate compliance with the
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principles of personal data processing listed in Article 5(1) of the GDPR: the principle of lawfulness, fairness and transparency, principle of purpose limitation, data minimisation, accuracy, storage limitation, integrity and confidentiality. Therefore, first of all, this principle clearly defines the person - controller (organization which determines the purposes and means of the processing of personal data) - who carries the responsibility on the one part and requires the controller to be able to demonstrate compliance on the other part. As a result, a new dimension is added to personal data processing practices: it is not sufficient to be compliant. One must be ready to demonstrate compliance. The issue faced by the businesses is that the GDPR does not provide clear guidelines or set of activities
that must be performed in order to be accountable, similarly, as there are no clear instructions for full observation of other data processing principles. Thus, the most common question raised by organizations is: how far does the accountability go? Whether the data privacy policies and staff training will suffice, or should the controller go as far as recording deletion of data each time on expiry of the retention period? While there is no one answer to that (and it is not expected, as this is specific for each controller), we are glad to share our insight into current practice.
Accountability measures
First of all, the principle of accountability requires following the rules of the GDPR. The principle is reflected in numerous obligations stipulated by the GDPR, such as the conclusion of personal
As part of the accountability principle controllers are required to demonstrate their compliance and the most obvious way is to document their practice and decisions. On some occasions, it is explicitly required by the GDPR, such as a requirement to maintain records of processing activities. However, EDPB in its guidelines has recommended
of accountability, they must be reviewed and updated when needed or periodically – depending on the circumstances. For example, if the controller introduces new practices or products that concern personal data processing, it shall be reflected in existing personal data processing documentation. It is also of importance to ensure that the documentation is duly communicated to the employees, therefore, controllers put great effort into training. Training of teams can take different forms: starting from simple acquaintance
As part of the accountability principle controllers are required to demonstrate their compliance and the most obvious way is to document their practice and decisions. further documentation on multiple occasions despite the fact that GDPR does not explicitly require it. The examples include the need to put the internal analysis of nondesignation of data protection officer in writing, in order to demonstrate that all factors have been taken into account (unless it is obvious that the controller is not required to designate the data protection officer) and also putting in writing monitoring purposes of video surveillance. If documents are used as part of compliance with the principle
with internal policies or seminars for employees to development of innovative internal training based on interaction with staff via smart devices. Appointing a data processing officer and implementing appropriate security measures also form part of observing the principle of accountability, as these actions are directly related to the principle of security and show that the controller recognizes the protection of personal data as an important part of its activity.
At the outset, it looks like a good practice for the controllers to implement the accountability checklist, tailored for the circumstances, and used as a guide, so as not to be caught by surprise when facing the need to demonstrate compliance. As there is no one-size-fits-all solution, a risk-based approach, imposed by the GDPR, shall be considered.
Change of mindset
In essence, the principle of accountability requires readiness to recognize data protection as an essential part of the controller’s activity. The accountability requires proactive rather than reactive approach by setting automatic and regular observation of personal data processing principles and prevention of undesired events involving personal data. The controllers must include privacy into every design stage of their products and services as well as throughout the whole process and then look for opportunities to appropriately record it. The forms of recording are not limited to written documentation. Therefore, compliance with the principle of accountability requires not only following GDPR requirements, but also change of mindset. Formal approach is no longer sufficient: the principle of accountability requires to change personal data processing habits and be truly responsible with individuals’ data.
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62 | EVENTS Photo: Matīss Markovskis, Marko Mumm, Mindaugas Mikulėnas
German-Baltic business dialogue Extensive dialogues were held between Germany and the Baltic states during the visit of the German Federal Minister for Economic Affairs and Energy, Peter Altmaier, to Estonia, Latvia and Lithuania from February 19 to 21. The main topics for discussion included pivotal issues that will shape the future and create both challenges and opportunities to business, such as climate change and digitization. “The Baltic countries are leaders in Europe with regard to digitization and start-ups”, said Altmaier, praising the host countries several times in Tallinn, Vilnius and Riga. Besides discussing the state of economic relations and measures to further enhance cooperation, the German minister also introduced the priorities of his country’s Presidency of the Council of the EU in the second half of 2020 to his Baltic counterparts. Altmaier also gave speeches to invited guests and met with representatives from the German-Baltic business community at events organized by the German-Baltic Chamber of Commerce (AHK). AW
Minister Altmaier speaks to members of German- Baltic Chamber of Commerce (AHK) in Latvia in honour of the 25th anniversary of AHK in Riga
German Federal Minister for Economic Affairs and Energy, Peter Altmaier
German Minister for Economic Affairs and Energy, Peter Altmaier (in the middle) and members of German- Baltic Chamber of Commerce in Estonia Minister Altmaier hold a public lecture at the Riga School of Economics and discussed the future of the EU with the students
Minister Peter Altmaier and Management of German- Baltic Chamber of Commerce in Lithuania
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64 | EVENTS Photo: Jenny Nieland
Extending economic cooperation and investments Bilateral economic relations as well as European and foreign policy matters were on the agenda when Estonia’s Foreign Minister Urmas Reinsalu met with AHK members in Tallinn on 30 January. In the first edition of the brand-new Members’ Luncheon seminar series, Estonia’s chief diplomat also talked about questions relevant to foreign investors, the business climate and the overall economic strategy of the government. Reinsalu praised Germany and Estonia as strategic partners that share the same vision regarding many issues and enjoy good economic relations. His words were echoed by the host of the luncheon, German Ambassador Christiane Hohmann, who also pointed to ties that go well beyond business. In the subsequent discussion with AHK members and guests, both speakers underlined their commitment and support for further extending economic cooperation and investment. AW
Estonia‘s Foreign Minister Urmas Reinsalu (in the middle), Florian Schröder, CEO, GermanBaltic Chamber of Commerce (right) and Tarmo Mutso, Head of the Office in Estonia, German- Baltic Chamber of Commerce
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66 | EVENTS Photo: Kaspars Garda
Germany and Latvia – close links in economic terms The close economic relations between Germany and Latvia and the recent rise of German investment in Latvia were praised by Latvian President Egils Levits at a meeting with members of the German-Baltic Chamber of Commerce (AHK) on 25 February in Riga. “We have wonderful and strong Hanseatic ties and traditions. Our trade ties with Germany date back to 1150 and these ties have never been lost. They have only grown bigger and bigger. You are a part of these growing bilateral trade and economic relations, and I thank you for that”, said the Latvian head of state in remarks delivered to 50 representatives of the German-Latvian business community at the Pullman Riga Old Town hotel.
Latvian President Egils Levits
Christopher Zimmer, President, German-Baltic Chamber of Commerce
“Apart from bilateral relations, German investors have played a particularly significant role in our economic growth.” With these words, Levits welcomed the increasing number of German companies operating in his country and creating local jobs. German products, craftsmanship and professionalism are still regarded as some of the best, according to the 64 year-old former European judge, who spent part of his life in Germany. Levits also praised Germany’s dual vocational training system – an apprenticeship system that combines practical training on the job in a company with school-based training in a vocational school – as “quite unique” and stated that he would like to see that kind of system introduced in Latvia too. AW „It is a very good journal. I can only recommend it,“ Latvian President Egils Levits about Baltic Business Quarterly
Māris Balčūns, Head of the Office in Latvia, German- Baltic Chamber of Commerce (from left) and Reinhold Schneider, CEO, SCHWENK Latvija
Florian Schröder, CEO, German-Baltic Chamber of Commerce
68 | EVENTS Photo: Mindaugas Mikulėnas
Strengthening successful teamwork The members and partners from the German-Baltic Chamber of Commerce Lithuania met at the Regional Assembly in Vilnius on 4 March. The past year was evaluated and plans for new highlights were made. Some important dates for 2020 are already fixed – the Oktoberfest in Vilnius will take place on 12 September, while the 2nd GermanBaltic Digital Summit will take place in Munich on 7 October. The Management Board Members of German-Baltic Chamber of Commerce were re-elected and three new Board Members were added – Radostin Roussev-Peine, CEO at Lidl Lietuva, Deivis Valiulis, Partner at Triniti LT and Christoph Schelzke, CEO at Mikron Kaunas UAB. At the AHK Regional Assembly in Vilnius the key speaker this time was Kęstutis Kemzūra, a former professional basketball player and champion coach. He spoke about successful teamwork and match making. The differences between a champion coach and a top business leader are not so great. One of Kemzūra’s quotes was, “Basketball, like a successful company, is a team game. You have to treat your team the same way as you want to be treated by them.” LM Kęstutis Bogdanavičius, Regional President at German-Baltic Chamber of Commerce in Lithuania
Matthias Sonn, German Ambassador to Lithuania
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IMPRINT SERVICE
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Vienas vienintelis, MB
COMFORT HOTEL LT
Mantas Kazlauskas Tel: +37062093900 info@1vienintelis.lt www.1vienintelis.lt
Kauno str.14, Vilnius, Tel.: +370 5 2505111; Fax.: +370 685 98 920 E-mail: co.vilnius@choice.lt www.comforthotel.lt
“1 Vienintelis” is an event management agency which works to keep clients calm. We help our clients avoid potential risks, waste less of their valuable time and effort, and simply enjoy the best of events. Hundreds of business companies and private clients have entrusted their events to our team and have recommended us to their friends and business partners. With many years of experience in show business, “1 Vienintelis” team members take care of all the event management. We manage the various parts of the event from start to finish.
Comfort Hotel LT is a modern, music-themed hotel with its own rock radio. It offers free access to a 24-hour gym and free Wi-Fi. The Vilnius Old Town can be reached within a 10-minute walk. All air-conditioned rooms at Comfort Hotel LT are decorated in a modern, urban style and feature a 32-inch flat-screen TV, an armchair and a table. The bathroom is fitted with heated floors and a hairdryer. A healthy breakfast buffet is available every morning and the restaurant offers European cuisine prepared by a famous Lithuanian chef. There is a lobby shop offering fresh snacks and beverages. Guests can relax with a drink at the hotel bar. The hotel also offers underground parking. What’s more, the hotel has four meeting rooms, with the biggest one accommodating up to 120 delegates.
Rock n Roll Vilnius
INDUSTRY
LATSIGN Latvijas-Vācijas sabiedrība SIA Riga, Latvia Employees: 15
Alīna Lambi
Tel.: +371 67 607095 E-mail: latsign@latsign.lv LATSIGN Ltd., a Latvian-German company, is a manufacturer of diverse outdoor advertising products and visual media. The company started with the first Latvian-language production of signs, warnings and information signs. As the company evolved, LATSIGN also focused on car advertising services and today is a certified car wrapping service provider, offering a wide range of car wrapping services including different types of vehicles, interior items and shop windows. LATSIGN is the only company in Latvia that offers TÜV-certified German license plate holders with corporate design, in addition to the large format printing of banners, posters, trailer covers and other advertising materials. Spring 2020
Baltic International Bank
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Berlitz Language Services Latvia SIA
Riga, Latvia Employees: 217
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Viktors Bolbats Tel.: +371 6700 0444 E-mail: info@bib.eu
Tel.: +371 67 660540 E-mail: sandra.gnevosa@berlitz.lv
Baltic International Bank is one of Latvia’s most experienced banks in the field of providing individual, tailor-made services, offering high-quality financial products and investment solutions based on the principles of the ESG. The competent and solid team of professionals, many-year experience of the Bank’s business partners in the implementation of long-term investments as well as contemporary financial, legal and technological solutions are behind the successful operation and performance of Baltic International Bank.
For over 140 years, Berlitz has been delivering language lessons and cultural training to help our students communicate with confidence. With more than 500 language centers in over 70 countries, we have a truly global footprint. We teach German, Latvian, Russian, English, Danish, Swedish, Norwegian and many more other languages (50 languages all together). The Berlitz Method is immersive and goal-orientated. Language is presented in the context of real-life situations. The Berlitz Virtual Classroom (BVC) has developed the most effective live online instructor-led language training program for businesses and individuals.
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INDUSTRY
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AirGol SIA WIGO group Limbaži, Latvia Employees: 25
Gunta Skuja
Tel.: +371 29469427 E-mail: office@wigo.info Wigo Group is an ETA-certified wooden house manufacturing company. The company’s history, quality and standards come from Austria. For the production of wooden houses, we use CLT and wood panel production technologies. The company has extensive production facilities, with a production capacity of 2000m3 per month. Wigo Group offers a variety of timber construction solutions and other construction-related timber for real estate developers and individuals. The company manufactures full-cycle CLT panels and also provides after-treatment. Additional services include the production of prefabricated wooden panels as well as the production of modular houses. The advantage of CLT home production is the ready-assembled wall panel at the factory.
Repston OÜ Erma tee 32, Liivamäe Employees: 30 Edwin Jakobson Tel.: +372 6352833 E-mail: sales@repston.ee Repston’s trademark is high-quality, striking and highly sophisticated metal and wooden interior design elements. The company has 15 years of experience in metal processing and conversion of metal into interior design elements as well as commercial furnishings, staircases, chandeliers and lighting. Its products can be found in hotels of international chains like Hilton, Radisson, Sokos, Scandic and Ibis all over Europe as well in the shopping centres TSUM and GUM in Russia. They are also in the custom-designed furniture of the newly renovated Helsinki-Vantaa airport in Finland. Repston is launching its new production facility on 4,000m2, brimming with cutting-edge technology in 2020, in order to increase production capacity and meet the growing demand of international customers.
Magazine “Baltic Business Quarterly” Founder: German-Baltic Chamber of Commerce in Estonia, Latvia, Lithuania (AHK), Breite Straße 29, D-10178 Berlin, Germany Executive Board Member: Florian Schröder Editorial office: Strēlnieku iela 1-4, LV1010, Riga, Latvia, +371-67320718, www.ahk-balt.org Publisher: SIA ”Žurnālu izdevniecība Lilita”, 21 Merķeļa str., Riga, Latvia, LV1050. 20004547, lilita@lilita.lv, www.lilita.lv Reprint allowed only with a written agreement with the Founder. ©2018.AHK Printed in printing house “Lietuvos Rytas Print”, Lithuania Print run: 3000 issues Cover photo: BMWi/Susanne Eriksson Editor in chief: Līva Melbārzde, +371 6 732 0724 Reporters: Anda Asere, Kristaps Greidāns, Philipp Heumann, Gintare Jonyniene, Elīna Muciņa, Egons Mudulis, Jenny Nieland, Rimtis Puišys, Vineta Šķērīte, Karoline Schlegel, Tambet Toomela, Reet Truuts, Alexander Welscher Photographers: Arina Solntzeff, Ritvars Skuja, Augis Narmontas, Matīss Markovskis, Kaspars Garda, Mindaugas Mikulėnas, Marko Mumm, BMWi/Susanne Eriksson Art Director: Vitalijs Suseklis Advertising Director: Līva Melbārzde Tech Director: Gints Mucenieks Advertising Editor: Jānis Rožkalns, reklama@lilita.lv Digital editions: App Store and Google Play ISSN 2592-2570 Publisher is a member of Association of Press Publishers of Latvia. lpia.lv
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by ALEXANDER WELSCHER
Visitors pose for a photo on top of a dismantled nuclear reactor during a guided tour to the decommissioned Ignalina nuclear power station in Visaginas
Chernobyl not only sparked global attention in 1986 nuclear reactor disaster. The hugely popular TV series has also led to a surge in tourists to the filming locations in Lithuania. The Baltic country has become a new destination for nuclear tourism.
Atomic attraction
w
Plant director Audrius Kamienas. The decommissioned Soviet-built atomic station in Lithuania, which underwent its final shutdown in 2009 due to a commitment that the Baltic state gave when it joined the European Union, was one of the main film sets for Chernobyl. Not much had to be changed for this: Ignalina dates from the same time period as the ill-fated Chernobyl plant and had an almost identical reactor design. The Lithuanian facility went online in 1983 and was supposed to become the largest nuclear power plant in the Soviet Union at that time. To accommodate plant workers, even an entire city was build from scratch – Visaginas. The nearby town now also benefits from the tourists visiting the plant nestled in the north-eastern tip of Lithuania, close to the borders to Belarus and Latvia.
“We have seen great interest here. Since the series was aired, we have many times more tourists than usual,” says Ignalina Nuclear Power
Tickets to tour Ignalina, priced at around €60 each, are booked months in advance. In 2019 alone, 4,485 people visited the plant – up
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from 2,240 the year before. The facility has extended its visitor capacity to cope with the demand from Lithuania, Europe and beyond. Tours for groups not exceeding 15 people are now offered up to two times on four days per week, instead of three weekly tours of the past. “We even had to recruit additional guides,” Kamienas said during an interview in his office in the plant that seems to have fallen out of time. Guided tours are also held in Vilnius, enabling visitors in private excursions to explore the dreary Sovietera residential district of Fabijoniškės where the original sites were recreated and adapted to look like the infamous Ukrainian town of Pripyat. Located next to the Chernobyl plant, Pripyat was once home to 50,000 people who mainly worked at the plant before it was evacuated forever on day two of the disaster and left to the devices of nature. Today, it is a desolate city at the epicentre of the exclusion zone around the plant, but for Chernobyl the town was reborn in fiction in
Fabijoniškės. Other film locations in Vilnius include the former cultural and sports centre of the Ministry of the Interior and the KGB museum.
Photo: Alexander Welscher
hat was it like on 26 April 1986 when everything went wrong at the Soviet nuclear power plant in Chernobyl? More than 30 years after the reactor meltdown and explosion, the HBO mini-series Chernobyl took up the nuclear disaster in a dark and realistic manner. In five episodes, it authentically depicts the explosion’s aftermath, the vast clean-up operation and the subsequent inquiry. The series has been a major success that scooped multiple film awards and became a must-watch historical drama. Its fame has also brought unforeseen attention to Lithuania. Chernobyl has turned its filming locations in the Baltic nation into off-beat tourist attractions – nuclear tourism is booming since the series exploded onto TV screens in the spring of 2019.
Lithuania’s second-largest city Kaunas, on the other hand, served as a backdrop for scenes set in Soviet Moscow. The scene where Pripyat residents gather on a bridge to watch the eerie blue glow of radiation on the night of the explosion was also shot there. In total, over 40 different locations in Lithuania can be seen in the series. There were around 1,000 hours of footage – Chernobyl is by far Lithuania’s biggest production to date. Filmed in 16 weeks in 2018, the series was made with a direct outlay of around €15 million into the Lithuanian economy and created hundreds of jobs.
Inside the Chernobyl lookalike
The main filming location for the series, however, was Ignalina. Daytrippers board trains or buses in
Vilnius or join organized tours by operators such as Travel Addicts to be driven 150 kilometres north to the plant located in the midst of a scenic forest. “Wow, it looks like the real thing in Chernobyl,” the French tourist Morgane KaluzinskI said upon arrival when spotting the Lithuanian nuclear site for the first time. Together with her travel companion Gabriel Peron, she already visited the Chernobyl exclusion zone a few years ago. Now, the couple came from London to see Ignalina and get to know what happened when a similar reactor exploded in 1986. “We saw the series but the topic interested us before, as the Chernobyl incident is really fundamental to the history of the 21st century,” said Peron of his motivation to visit Ignalina. Other visitors also come for their own reasons, which range from pure sensationalism to genuine historical interest. Despite being decommissioned, significant safety requirements apply for accessing the nuclear power plant. Under the gaze of armed military staff, each visitor has to undergo a strict inspection in the entrance area that is similar to an airport security check. Mobile phones, cameras and other technical devices as well as food and drinks are strictly forbidden inside the plant. These rules have to be observed by all visitors taking part in the Ignalina excursion. No concessions were made for the Chernobyl film crew either. Once you have entered the power plant through the chip-based security turnstiles, everyone has to take off their street clothes and slip into a whiter-than-white overall that smells of disinfectant and shoes. Wearing the new plant-issued outfit and a helmet on your head, the guided tour passes through a seemingly endless labyrinth of long, poorly lit
corridors. The walls are covered with different-coloured samples of Soviet plastic production and still have safety and warning instructions in Russian on them. Always on hand throughout the tour is a radiation dosimeter, and everyone is checked for contamination on exit. The three-hour tour first leads into the cold heart of the decommissioned plant – the reactor hall. Several metres below the tourists’ feet, and shielded by several protective layers, was the reactor core which was loaded by control rods located within a floor with a checkerboard pattern of small grey metal plates. Standing and walking on top of the dismantled nuclear reactor gives some tourists an uncomfortable feeling – the core is still highly radioactive. The tour then continues into the turbine hall, which is several hundred metres long and where dismantled and disassembled machine parts give an idea of the dimensions of the plant that was a model of centrally planned enormity. The highlight of the tour for most tourists, however, is the control room that looks familiar to anyone who has watched Chernobyl. For many visitors, being in the small windowless room feels like stepping back into one of the scenes. Surrounded by outdated screens and tables with dozens of buttons and switches, they willingly agree to a souvenir photo offered by the guide. Most of the tourists pose next to the button for the reactor’s emergency shutdown. It was also pressed in the series. Too late and without success – as in reality. A fatal design flaw led to a chain reaction. The reactor experienced an explosion and core meltdown – and the most devastating nuclear accident in history got under way. Within days, the fallout had spread across most of Europe and its consequences are still felt today.
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Photo: Alexander Welscher
Visitors pose at the button for the reactor emergency shutdown in the central control room of the decommissioned Ignalina nuclear power plant.
Cernobyl became one of the most outstanding and acclaimed mini-series after exploding onto TV screens in spring 2019. The HBO historical drama about the 20th century’s worst nuclear disaster won several Emmy and Golden Globe Awards. One of the many people behind the success is Gary Tuck, the managing director of the Vilnius-based Baltic Film Services that provides production and co-production services in the Baltic States. Baltic Business Quarterly talked with Tuck about the five-part series that was partly shot in Lithuania and made its filming locations an off-beat tourist attraction. by ALEXANDER WELSCHER
“I did not expect it to be such a phenomenon”
Film shooting for the Chernobyl in the Fabijoniskes district in Vilnius
Lithuania was also affected back then by the catastrophe. Thousands of liquidators were sent to Chernobyl in the months and years after the disaster by the Soviet authorities to help clean up the contamination. Many of them suffered from illnesses and health problems or died as a result of their exposure to the high levels of radiation. For some of the former conscripts, the series has brought back memories and reopened old wounds. In general, however, Chernobyl is considered to be historically relatively accurate and was received positively in Lithuania, while there has been a row about the series in Russia and other former Soviet Republics.
The success of Chernobyl and the resulting interest in the film locations came as a surprise to many in Lithuania. While tour operators and the nuclear power plant in Ignalina were quick to exploit the new situation as an additional source of income, for Visaginas the unexpectedly great
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In 2019, the number of overnight stays in the purpose-built town, which is shaped like one half of a butterfly from a bird’s eye view, grew by 50% compared to the year before. Apart from 14 broad, straight avenues with lined-up multi-storey apartment blocks, however, there is not much to see for Chernobyl fans in the monotonous red and grey city of prefabricated buildings. The tourist information is hard to find, and there are no souvenir shops or places that sell memorabilia with the nuclear power plant or the like on it. Only the local brewery seized the opportunity and merchandizes the local beer: Atomic blonde. Once hailed as a model Soviet city and worker’s paradise, Visaginas has faced an identity crisis since Ignalina was decommissioned. Galaguz now deems nuclear tourism as an opportunity for the city that
is left with just over half of its previous 35,000 inhabitants when the plant was in operation. The mayor, who also worked at the plant for years, wants to further develop in that direction and plans to set up a multi-purpose information and education centre on nuclear power and the atomic legacy of the city. Others in the city have similar ideas for establishing a museum about Ignalina. No matter what plans are implemented in the end, they will probably come too late for the vast majority of tourists. The surge in visitors has already peaked and is now slowing down again, according to Lithuanian tourism experts. Ignalina director general Kamienas also expects the boom to end sooner or later, but still expects visitors to come and see the plant until it is razed to the ground in 2038. “Nuclear tourism is a special kind of tourism and these tourists are definitely coming here,” he believes. “There are not many nuclear sites that can be visited. In fact, there are only a few in the world – and we are one of them.”
Were you surprised by the huge success of Chernobyl? I think everybody was surprised by the huge success of the series. Even though I was convinced that the series would be good because the scripts that I read before the film was shot were among the best scripts I have ever read in my whole career. We also had access to the research materials used for it – and it contained the most comprehensive information about the whole Chernobyl disaster from every perspective. Of course, a lot can go wrong between the script and the final project, but in this case it did not. There was a great team behind it with a very good director. So I thought that it would be a great series but I did not expect it to be the kind of phenomenon that it certainly became.
Photo: Alexander Welscher, Sky UK Ltd HBO
Nuclear town with(out) an atomic future
attention and interest feels like a missed opportunity. “The city was not prepared for such a large increase in visitors,” says the Visaginas Mayor Erlandas Galaguz.
Not everyone is as enthusiastic as you. There is controversy in Russia and Ukraine about the series. Of course, there are always going to be different opinions about the facts as presented. But I think overall that it is a fairly reasonable depiction of what happened back then. The primary focus of the writer and executive producer Craig Mazin was to tell the story of the actual people involved in terms of the
human dimension. Ok, it shows the Soviet system and the cover-ups and all the rest of it. And I can understand the criticism but I think he draws the line very well. For me, the overriding thing about the series is the human impact of the disaster on ordinary people. Ultimately, it is about the ones who were directly affected and their heroic efforts to contain it: the fire-fighters, the miners, the hospital workers, the soldiers and so on. For me, that is that is the real key here. The success of the series also had an effect on tourism in Lithuania. There are now organized tours to the filming locations of Chernobyl. Is this kind of film tourism a new trend in the Baltics? I don’t think it is a new trend but rather a more public phase of it. Historically, tourism has always benefitted from film, and most tourist organizations have acknowledged that film can have an impact on tourist numbers. People have always come to see the very spot where a popular movie was filmed. Now it is just taken to the next level by organizing actual tours and the tourist people are much more active about it in
terms of really promoting this. So that is kind of a new thing. Before Chernobyl they did it already with the BBC series War and Peace which was shot in Lithuania, Latvia and Russia, and organized special tours to the film locations. And in my understanding, they are quite successful. Do you think the success of Chernobyl can be repeated or was it more of a one-off? Never say never. In general, the film business is very unpredictable. Ultimately, the art of attracting films anywhere in any country is almost always location-driven. The only reason why the Chernobyl executive producers came to Lithuania was that we had an existing nuclear plant that was a dead ringer for Chernobyl and also the Soviet-style buildings that could double for the city. So this was kind of a unique situation and it is hard to image this repeating itself. But let me rephrase your question: Could we get some more productions of that scale in the Baltics? Yes, I think we can. But for this we need to improve and expand the infrastructure. We certainly need some stages and larger studio spaces. That would help to attract some of these bigger productions.
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76 | C U LT U R E by ALEXANDER WELSCHER
Fine museums, great art galleries and splendid exhibition venues – Estonia, Latvia and Lithuania are rich in cultural offerings for traditional art lovers. But the Baltics also have much to offer people more interested in exploring odd spots and lesser known places with collections devoted to the weird, macabre or absurd. Discover our selection of unusual museums.
of around 50 torture and public humiliation devices from different parts of Europe, such as the Witches Chair, the Rack and the notorious Iron Maiden. Are you brave enough to visit?
Out of the ordinary
m
useums historically began as the private collections of the wealthy, displaying art and rare or curious natural objects and artefacts in wonderful rooms. While the finest of them grew into famous cultural and national establishments and are housed in prestigious buildings, other former and present cabinets of curiosities remained on the periphery but are still worth visiting – be it for their bizarre collections, their off-beat location or just for their sheer novelty alone. Discover the stranger sides of the Baltics and delve into some of these alternative museums that reveal their quirky artefacts to inquisitive visitors.
Devils’ Museum
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Address: V. Putvinskio g. 64, LT-44211 Kaunas Opening hours: Tuesday to Friday from 11.00–17.00, Thursday from 11.00–17.00 and weekends from 10.00–17.00. Admission: €5, discounted tickets for children and certain group of people. https://ciurlionis.lt/ To know before you go: The ticket office closes 30 minutes before closing.
Grūto Parkas The Soviet Union collapsed almost 30 years ago, but you can still get a taste of how life was then at an open-air museum near the Lithuanian resort town of Druskininkai. Grūto Parkas is a peculiar combination of a communist statue graveyard with some fifty-odd
Address: Viru 1, 10140 Tallinn, Estonia Opening hours: Monday to Friday from 11.00 to 19.00, weekends 10.00 to 20.00, Admission: €8
sculptures of Lenin, Stalin, Marx and well-known Lithuanian communist heroes, several Soviet-era-themed museums and a mock gulag-style landscaped park plus a mini-zoo and an amusement park for children. What critics label as some kind of socialist Disneyland is at the same time one of the biggest single outdoor exhibitions of ideological relics in the world.
Sergei Eisenstein Communication Centre The old railway station in Ķeipene, a small village located in the middle of nowhere 77 kilometres east of Riga, has long been an abandoned stop on a defunct railway line. Today, however, after being converted into the Sergei Eisenstein Communication Centre, it has become an extravagant destination for enthusiasts of cinematic history. Dedicated to the fabulous Soviet film director and other cinema greats, the memorial house is a living monument to Eisenstein’s world of ideas. It is the only public exhibition of artworks related to the Riga-born director, who is best-known for his cinematic masterpiece Battleship Potemkin.
Address: Grūtas, LT-66441 Druskininkai Opening hours: Open daily all year round from 9.00 to 22.00 during the season and 9.00 to 17.00 in the winter. Admission: €7.50 per person, discounted tickets for children and certain group of people. http://grutoparkas.lt/
Museum of Medieval Torture Instruments Until a few centuries ago, each European city had its scaffold on the market place and a gallows field at the gate, while torture chambers and dungeons were built and included in many castles throughout the ages. Times have changed but the Museum of Medieval Torture Instruments in Tallinn will bring you back to the painful past when torture and torment were commonplace. Located right next to the historic Town Hall square, the scary collection of cruelty consists
Opening hours: Monday to Sunday from 11.00 to 18.00 between 1 June – 31 August, rest of the year Tuesday to Sunday from 11.00 to 17.00. Address: Jaama 100, Kohtla-Nõmme, 30503 Ida-Virumaa, Estonia http://kaevandusmuuseum.ee/ To know before you go: The ticket office closes 1 hour before closing.
Estonian Mining Museum
Sabile is mainly known for its lovely winegrowing hill that is one of the northernmost vineyards in the world. In the small town in the western part of Latvia, however, another well-known landmark has been established over the course of time in a small and strange roadside garden – The Garden of Dolls. The somehow unsettling work of a local folk artist consists of a growing number of around 200 pale straw dolls with fabric heads and grimaces dressed as people of all ages and walks of life. Passers-by are free to walk around “Latvia’s answer to the Chinese terracotta army” (Lonely Planet) and take pictures.
Would you like to get a taste of what the life of a coal miner was like? Then put on your rubber boots, grab a warm coat, take a helmet with a lamp and glimpse the many facets of mining from an underground perspective at the Estonian Mining Museum. Around 8 metres below ground, visitors can get a feel for the strenuous work in moist and dusky conditions experienced by miners, see various mining equipment and tour the silent tunnels on a real underground train for miners. Back on the surface, the visitor centre on the premises of the former KohtlaNõmme mine presents the journey of oil shale and how energy is created from the burnable shale stone.
The Garden of Dolls
Opening hours: open daily all year round Admission: Donations Address: Rīgas iela 17, Sabile, Latvia
Photo: Wikimedia/Usien, Wikimedia/ Keith Ruffles
Lithuania’s second largest city Kaunas is home to the unique and world’s only Devils’ Museum. What once started out as a small compilation in the private home of Lithuanian artist Antanas Žmuidzinavičius (1876–1966), evolved over time into an ever-growing collection of underworld lords – from Lithuania and around 70 other countries. Featuring mostly sculptures made out of all kinds of materials, the museum contains 3,000 devils in art that are spread over three floors and roughly grouped together according to different themes. Arguably the most famous exhibit depicts Hitler
and Stalin as devils in a dance of death over a pile of human bones.
Address: Ogres novads, Ķeipenes pagasts, Ķeipenes stacija, LV-5062, Latvia Opening hours: Tuesday to Saturday from 9.30 - 17.00. Some exhibition objects can only be accessed seasonally. Admission: €3 per person, discounted tickets for children and certain group of people. To know before you go: Excursions have to be booked in advance!
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Photo: Jenny Nieland
Vegan Hot Spots in the Baltics by JENNY NIELAND
Gone are the times when vegans in cities were desperately looking for alternatives to meat. The number of vegan restaurants in Lithuania, Latvia and Estonia is also growing exponentially. Convince yourself and join us on the vegan culinary journey through the three Baltic capitals.
VEGAFE Vegafe is not a purely vegan restaurant, but I will mention it anyway, as there are numerous vegan alternatives. They only sell freshly made food and based on Ayurvedic preparation rules in their meals. You can literally taste that the dishes are prepared with love and care, while the ambience is very chic and radiates calm. Every day there is an alternating “dish of the day” and the menu changes from time to time so that there is absolutely no boredom.
v
egan: trend or diet of the future? The word “vegan” is on everyone’s lips, but what do you think of when you hear the word “vegan”? Lettuce and radishes? But watch out: the vegan diet, together with the ecological and ethical aspects, has much more to offer than just greens. Veganism is a major trend and besides all the new alternative products that are rapidly conquering the market, there is also the fact that people who only eat plant-based foods have a much lower impact on the environment. In order to make your next visit to the three Baltic capitals easier, we will show you the best and tastiest vegan places to be in our “Vegan Hot Spot Guide”.
We will start our journey in the capital of Estonia, Tallinn: ROHE KOVIK You will find Rohe Kovik right next to the trendy Telliskivi quarter. Welcome to vegan heaven – from coffee to wine, from cake to pasta, everything is there, all of it freshly prepared and served with love. Especially recommended are the bowls served with raw vegetables and extraordinary alternative vegan variations, such as vegan “crab chips”. If
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This spot is one of my all-time favourite vegan restaurants. The ambience is really modern and is underlined by plants and pink light. There is also good music which, combined with the incredibly good food and the huge selection, not only relaxes the body but also the mind. It’s hard to recommend a single dish in particular because everything I had was so good, and I tried almost every single dish on the menu on my trip to Vilnius, but I would probably order another homemade kombucha and a delicious bowl with the freshest ingredients. Highly recommended.
you are not that hungry, you can also go for the homemade cookies or desserts, which are not only tasty but also look amazing. My absolute favourite place in Tallinn for a time out with good food and a super cosy, green atmosphere.
VEGAN V The first vegan restaurant in Tallinn can be found in the heart of the old town. Vegan V was opened in 2014 and since then it has become one of the most popular restaurants for vegan dishes. Everything on the menu is 100% vegan and has a taste so close to the aromas of meat or fish that it is hard to believe that it is actually a plant-based alternative. Everything on the plate is very fancy, while the ambience in the restaurant is a very interesting mix of old and modern. Be sure to make a reservation a few days in advance as it is very popular at any time of day and it can be difficult to get a table spontaneously.
VEGAN INSPIRATIOON You will find Vegan Inspiratioon very close to the Tallinn city wall, at the entrance to the beautiful old town. The restaurant has a charming and sweet atmosphere, which is underlined by the various decorations. I like to visit this restaurant especially for lunch because it offers delicious and varied lunches almost every day. From scrambled tofu on toast to spicy tacos and curry, everything is there. If you are not that hungry, there is also a large selection of delicious smoothies. As a chocaholic, I can especially recommend the Snickers Smoothie.
The tour continues with the capital of Lithuania, Vilnius: ROSEHIP VEGAN BISTRO You will find the RoesHip restaurant tucked away in the middle of the main street, opposite the Bernardinų garden.
ZATAR FALAFEL&HUMMUS You can find ZATAR falafel&hummus in the old town of Vilnius and if you are one of the falafel addicts, you should not miss the chance to visit this place. You can choose either between a pita, a wrap or the classic breadless falafel and order your favourite ingredients separately. They really do have a huge selection of falafel variations at a very affordable price. The atmosphere could be made a bit cosier in my opinion, but the delicious taste overshadows this point.
The journey continues with Riga, the capital of Latvia, which has some pretty good vegan options. But here come the top 3 locations: GREEN PUMPKIN Green Pumpkin, in the old town of Riga, is a paradise for all vegans. You can find everything your heart desires there. From tapas, to a huge selection of burgers and pasta, to cakes. The portions are great and filling, and the food arrangement is super fancy. The atmosphere at Green Pumpkin is also very relaxing and please make sure to try one of the wonderful smoothies (I would recommend the ’skin glow’ smoothie which is really refreshing thanks to the coconut water in combination with pineapple and
mango, especially during the summer months) if you are not too hungry.
MiiT COFFEE Want a good start to Sunday with an extensive, tasty, rich brunch? At MiiT Coffee, this wish will be fulfilled. I came across the Miit Coffee by chance, luckily on a Sunday, and was able to enjoy the fantastic brunch buffet. There is a huge vegan selection (there are only vegan and a few vegetarian dishes). Salads, bread and rolls, homemade granola and chia pudding, fresh fruits and glutenfree mango pancakes are just some of the goodies. There are also vegan snickers, which I took with me for my way back and it was heaven on earth.
TERAPIJA VEGAN CAFE Already from the outside, you can look into the beautiful café with the huge windows and discover a green oasis full of plants and cosy vintage sofas. They have a large menu with many, exclusively vegan, dishes. We ordered so many dishes because we just couldn’t make up our minds with the delicious selection and I don’t regret any of them. I especially remember the wrap with vegan “salmon” made of carrots and the bowl of the day with fresh vegetables and a delicious beetroot dressing. Terapija also offers a brunch buffet at the weekend which I will definitely enjoy on my next trip to Riga.
Spring 2020
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Collecting data for the Smart Factory Smart factories are about to become the norm in manufacturing, and they rely on connected devices to leverage data on energy consumption and efficiency. The Lithuanian company Aedilis has a solution for this technical challenge.
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ndustry 4.0 is one of the buzzwords in the world of manufacturing these days. The main target for this new philosophy is to utilize state-ofthe-art information and communication technologies devoted to the intelligent interconnection of humans and machines. Advanced components that communicate with each other enable new digital networks to develop and allow information to become available across the entire value chain. Collected, aggregated and examined by powerful analytics, the data can be used for making decisions on optimizing the production process using resources.
What sounds simple is technically a real challenge – very often huge amounts of data have to be gathered and evaluated. “Many companies do not know how to digitize their factories to be able to seize the opportunity to increase their productivity. We help them to shine a light into the dark corners of the production halls,” says Raimundas Slavinskas, CEO of Aedilis
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UAB. Founded in 2004, the Lithuanian company is developing digital solutions that promise more transparency and capture the necessary data within manufacturing firms. Using its extensive experience as a service provider for electrical installations, the Vilniusbased company has developed a cloud-based energy management system. This platform allows the monitoring of real-time energy use and automatically notifies operators, supervisors and cost accountants of energy inefficiencies and waste. “The major benefit is to know how much and where energy is used in the factory, and how the consumption behaviour changes over time,” explains Slavinskas. The platform is a unique system for process monitoring and process controlling. It connects directly to renewable power plants and meters on a network, and is designed to integrate data from different hardware systems, such as meters, sensors
Proud winner of the German- Lithuanian Business Award 2017: Raimundas Slavinskas. The annual award had the theme "Digital networkingprepared for Industry 4.0"
and controllers, as well as software formats. “We provide our customers with a predefined solution. After training, they can create and follow their own Key Performance Indicator,” says Slavinskas. Other Aedilis solutions aim to improve the overall plant effectiveness. “We track machinery utilisation and efficiency on every machine, especially on older ones, to enable our customers to get digital data from oldschool machines. This allows our customers to produce more efficiently and lets them know where the limits are in their production lines,” says Slavinskas. In both cases, the necessary equipment can be bought or rented, but no matter which of the Aedilis solutions companies decide to use, all the data gathered is available in real time via an easy-tounderstand user interface on desktops, tablets or mobile phones. Everyone involved works with the same data, which is stored and secured in the protected cloud. “Cyber security is a key topic and we understand the risks involved. Therefore, we have a strict policy and risk management strategy for how to avoid data leakage, cyber attacks and intrusion. Internally,
meta-data is also separate from machinery data,” Slavinskas emphasizes. Customers have to pay a monthly fee for using the cloud, while they retain data ownership at all times. “The collected data belongs to our customer and we cannot use this information to share with someone without customer consent”, Slavinskas adds. By using the platform solutions, companies could save between 10% and 50% of their energy consumption and increase efficiency by 20% to 50%, according to the Aedilis CEO. Payback time is less than 12 months, depending on the installation and the company energy saving experience and engagement. “We already have more than 100 customers in different fields. For now, most of them are in plastic, metal and other industries,” says Slavinskas, describing his client base. It consists of mainly small and mediumsized enterprises – the target group of Aedilis. Currently, the main markets are the Baltic countries and Poland. Together with partners in Singapore, the Lithuanian company is also already active in Malaysia, Taiwan and China.
Photo: Mindaugas Mikulėnas
by ALEXANDER WELSCHER