The interconnections are needed to support the integration of the national markets into a regional and later European market. It is allowing for trade in electricity generated from different sources, adding to the security of the system through flexibility and optimization of the system. It may offer benefits to the traders on all countries concerned. Differences in energy mix of the three Baltic states and particularly the large hydropower generation of Latvia are an asset for such interconnections. The further interconnection of the three Baltic States with the UCTE system will reinforce further their integration in the European market.