Renewable energy in Lithuania: will we continue in the right direction after the elections?

The first months of autumn will mark a new season for both wind parks and national politics. As October is approaching, along with the Seimas elections, politicians are speculating on the future of the energy sector in their programmes. However, the direction that should be followed in order to achieve the goal of producing all of the country’s electricity needs from renewable sources remains to be determined.

In recent years energy, and in particular the electricity produced from renewable energy sources, have been topics on the agendas of both responsible institutions and politicians. They became increasingly relevant a few years ago, after the Seimas approved the National Energy Independence Strategy that set the goal to produce 100 percent of the country’s electricity from renewable sources by 2050. It has been forecast that within a decade, wind parks will produce about half of Lithuania’s onshore and offshore electricity requirements – or about 6.5 TWh. The rest of the country’s power will be produced from other renewable energy sources or imported.

Most of the parties participating in this year’s Seimas elections also planning to include energy issues in their future agendas. These matters have been raised both by the politicians currently working in Parliament who are confident of retaining their seats, and by others who are hoping to gain the confidence of the electorate. After reviewing the programmes that have already been prepared by the parties, it can be concluded that the most important goals are: reducing the country’s dependence on electricity imports and use of fossil fuels, increasing the country’s energy security with more local electricity production, and promoting green energy and the circular economy.

In order to move towards meeting these goals, it is essential that the winning politicians follow the directions set out in the abovementioned strategy and the European Union’s Green Deal, as well as taking into account the issues and challenges currently faced by the energy sector.

Essential recommendations for the political parties

Consistently pursue the goal of 100 percent electricity generation from renewable sources. The country’s strategy stipulates that by 2030, the energy produced in Lithuania must already make up 70 percent of the final electricity consumption. Furthermore, 45 percent of the energy consumption and 90 percent of the heat will be generated from renewable energy sources. In order to achieve this goal, in has been forecast that wind parks could produce over 50 percent of the electricity needed by Lithuanians in 2030. The rest is expected to be produced from the following renewable energy sources: 22 percent from sunlight, 16 percent from biofuels, 8 percent from hydropower and 1 percent from biogas. By 2050, all the electricity that the country needs will be produced domestically, while 100 percent of the electricity and heat will be produced from renewable sources.

Comply with the international commitments on climate change. The international commitments on climate change, which are enshrined in both the Paris Agreement and the European Green Deal, should remain as the highest priorities. The European Green Deal is designed to promote better efficiency of resource usage and reduced pollution in the transition to a clean circular economy. The European Commission has pointed out that this includes investing in green technologies and supporting industry innovations. In addition, back in the spring, European countries were called upon to recognise the Green Deal as a key response to the region’s economic difficulties caused by the coronavirus. As an example of this response, the European Commission has decided to borrow EUR 750 billion to deal with the effects of the pandemic, with as much as 30% of this amount expected to be raised through green bonds.

Continue creating a favourable environment for project development in the region. Renewable energy, especially wind energy, is resulting in significant investments and contributing to job creation in several remote municipalities: Šilutė, Tauragė, Pagėgiai, Šilalė, Mažeikiai, Jurbarkas, Naujoji Akmenė, etc. In addition, it is contributing to the creation of jobs in other fields, such as the engineering, metal and plastic industries, among others. The total amount of investments in the wind energy sector of Lithuania amounts to about EUR 1 billion. However, in order to encourage further investments from renewable energy companies, they need to be treated as equivalent to other businesses, thus avoiding any artificial barriers caused by excessive administrative requirements. For example, according to the Republic of Lithuania’s Law on Immovable Property Tax, the municipal councils have the discretion to apply different rates of real estate taxes ranging from 0.3 to 3.0 percent, and they often set the maximum rate the producers of energy from renewable wind and solar sources. Even though such a rate is supposedly limited to the taxation of abandoned and disused assets, in practice it is equivalent to a sanction. 

Encourage operators to invest in networks. In order to achieve the renewable energy goals, there needs to be a consistent increase in the number of wind power plants operating in the country, which will be accompanied by the challenge of connecting these plants to the electricity transmission network. According to the publicly available data, about 860 MW of electricity generation equipment throughout Lithuania can currently be connected to the 110 kV network. In the areas where new developments are possible to develop, such wind parks, only about 500 MW of power from those plants could be connected to the existing onshore network. However, the combined capacity of the power plants to be installed over the next decade will almost double, so the situation dictates the need for a greater investment in developing the networks.

Promote the electrification and innovation of other sectors. The desire to reduce the use of fossil fuels mentioned in the party programmes is significantly related to the electrification of various sectors of the economy. One of the most striking examples is occurring in the transport sector, where new developments will include an infrastructure for electric cars and the promotion of vehicles such as electric trains. It is also important to find solutions for the use of electricity instead of burning fuel in the industrial sector, as well as promoting the use of heat pumps in households.

Author of the article – Aistis Radavičius, Director of the Lithuanian Wind Power Association