Lietuvos energijos gamyba, AB - Notification on material event

Regarding the discontinuing of the exploitation of the first unit of Kruonis Pumped Storage Hydroelectric Power Plant

Lietuvos Energijos Gamyba, AB identification code 302648707, registered office placed at Elektrinės str. 21, LT-26108 Elektrėnai, Republic of Lithuania. The total number of registered ordinary shares issued by company is 648 002 629; ISIN code LT0000128571.

On 12 November 2018, the Board of the Company adopted a decision to discontinue the exploitation of the first unit of Kruonis Pumped Storage Hydroelectric Power Plant (KPSHP) as of 1 January 2019. On 20 November 2018, the Supervisory Board of the Company made a decision not to object discontinue of the use of the first unit of KPSHP.

The decision to stop the operation of the first unit of the KPSHP was adopted having taken into consideration the scope of regulated services planned to be provided by the KPSHP systems in 2019 (it is estimated that an average of 400 MWh of secondary emergency reserve will be ordered in 2019; this service will be provided by two units of KPSHP), the situation of the electricity generation and system service market, the potentials of providing system services to the neighboring countries, changes in the regulatory environment, as well as following the assessment of economic viability of the costs allocated for maintenance and repair of units which provide no system services.

It should be noted than in the meeting of 26 October 2018, the National Commission for Energy Control and Prices (hereinafter referred to as the “Commission”) adopted a resolution “Regarding the Electricity Transmission Service Prices and Publication of their Application Procedure”, in which, compared to the procedure which has been applicable to date, the provision, which stipulated that no payment of the price for transmission services and system services was made for the amount of electricity transmitted to the KPSHP required for its loading, was repealed. After the electricity required for loading the KPSHP is imposed charges of transmission services and system services in 2019, the generation of electricity at KPSHP and the amounts of electricity consumed for loading will significantly reduce accordingly.

Valentas Neviera, Head of Corporate Communication Division, tel. +370 5 278 2908, e-mail. valentas.neviera@le.lt