It is often recommended that Lithuania, which is considering its National Energy Independence Strategy, follows the example of various foreign countries. However, Professor Jurgis Vilemas, an energy expert, believes that Lithuania has already created a success story, so this should just be continued. Although we can buy cheap Scandinavian electricity for the time being, it is unthinkable that our country will not eventually produce electricity using its own renewable sources, including wind.
Nearly 10 years after the closure of the Ignalina Nuclear Power Plant, Professor Vilemas highlights the achievements of Lithuania’s energy sector: a modern electricity market operating in accordance with best Scandinavian practice, and powerful connectors with Poland and Sweden. The latter factor has led to wholesale electricity prices in the Baltic states being close to prices in the Scandinavian countries (which are the lowest in Europe). The price difference between electricity in the Baltic and Scandinavian electricity market in March did not exceed 4.5 EUR/MWh.
“Power connections provide opportunities for very cheap electricity. This led to Lithuania importing about 70 percent of the country’s requirements last year. This year’s imports are likely to be at a very similar or even slightly higher level. In past winters, Kaunas and Vilnius CHP plants were in operation, but for some time now everything has been based on electricity imports. Local production from imported fuels is too expensive and cannot stay competitive. The truth is that the situation in the market is slowly changing. Typically for this season, due to spring floods, the price of electricity was extremely low and did not exceed 30 EUR/MWh, but now prices are much higher,” says Vilemas.
In the first quarter of this year, the price of electricity in Lithuania increased by more than 20 percent compared to the same period in 2017, and averaged 42.40 EUR/MWh. Professor Vilemas emphasises that it is economically beneficial for Lithuania to import electricity at such and similar prices, and predicts that they will not drastically rise in the coming years.
“Most experts predict a slow rise in electricity prices in the common market. As they rise, local production should increase. First of all, wind farms will expand, as well as the construction of small biofuel power plants. However, the total power of the latter will be significantly lower than that of wind farms,” says Vilemas.
One more example of Lithuania’s success is the transition of the district heating sector from gas to private biofuels, he says. This is economically beneficial, with expensive imports having been replaced by renewable sources.
With more and more innovative opportunities in the world for producing electrical energy using renewable sources, the future of Lithuania’s energy sector cannot be imagined without them. We live in a time of fundamental changes, with a fast transformation happening in the energy sector.
“It‘s clear that renewable resources will develop particularly fast in regions with plenty of wind and sunlight. In our region, we can use two types of resources: wind and solar energy. Compared with other countries, climate conditions in Lithuania are not the best, although the country now has wind farms with over 500 MW of capacity. These are reliable and generate most of the country’s electrical energy. It would not be a problem to double the amount of electric power produced in the farms, but this would require transmission networks to be amplified and control systems to be modernised,” says Vilemas.
He says that the biggest advantage of wind power is that it has the potential for fast development. A wind farm can be designed and built in only two years, whereas 10 years might not be enough to build a nuclear power station.
In Lithuania, most primary energy sources are used not only for electricity, but also for heating, while necessities for transport have been imported before. A transition to local energy resources therefore creates economic and social advantages. As a result, costs for primary energy imports decrease, new jobs are created, and electricity and heating prices are kept lower and more stable for customers.