ETS prices and renewable energy sources share in the energy mix - example of Lithuania, Latvia and Estonia

ETS (CO2 Emissions Trading Scheme) is one of the mechanisms that allow for controlling and striving to reduce greenhouse gas emissions worldwide. However, it is also another cost for CO2 emission producers, affecting the final price of energy. The aim of the article is to enrich the discussion by explaining the relationship between ETS prices and the level of share of renewable energy sources in the overall energy mix of the countries selected for analysis (Lithuania, Latvia, Estonia). The research covered the period 2000-2022. It was conducted using the following methods: literature studies, descriptive analysis of statistical data and deduction. The analysis led to the conclusions: the increase in CO2 emission allowance prices (ETS) forced a change in energy policy in Lithuania, Latvia and Estonia. In 2008, the ETS price was EUR 25/tonne of CO2, while in 2023, it was around EUR 50/tonne of CO2. An increase in the share of renewable energy sources was noted in the analysed countries. In Lithuania, wind, solar, and biomass energy are the most developed, while in Latvia, further investments were made in hydroelectric power plants. The situation was the worst in Estonia, from the development point of view, as solar and wind power plants were developed to a small extent. In 2000, the share of renewable energy in the overall energy mix was for Estonia: at less than 1%, Lithuania at around 3%, and Latvia at 68%. In 2022, under the influence of ETS fees, the renewable energy source indicator increased for: Estonia: to 45%, Lithuania: 74.7%, Latvia 72% in the overall energy mix.