LITHUANIA: Baltic Energy Market News Flash 5th Edition

03.05.2024 LITHUANIA: Baltic Energy Market News Flash 5th Edition

Energy news in Lithuania

WIND

  • On 12 October 2023, the winner of Lithuania’s first offshore wind tender was announced – UAB “Ignitis renewables“ and OW OFFSHORE, S.L. won the tender with a bid offering a development fee of EUR 20 million. In second place was “Orlen Neptun” with a bid offering a development fee of EUR 5 million.
  • On 15 January 2024, Lithuania’s second offshore wind tender commenced. Unlike in the first offshore tender, this time the tender participants were able to request financial support from the state in the form of a contract for difference mechanism. However, due to the lack of participants, on 15 April 2024 it was announced that the second offshore wind tender was deemed to not have taken place. The Minister of Energy announced that the rules for the second offshore tender will be amended and a new tender will be announced in the future.

HYDROGEN

  • On 9 October 2023, Lithuania’s natural gas transmission system operator Amber Grid announced about the beginning of the hydrogen transportation activities and its intentions to become Lithuania’s hydrogen grid operator. Amber Grid claims that it will have a separate transmission network dedicated specifically to hydrogen.
  • The Ministry of Energy is preparing hydrogen development guidelines for the years 2024-2050. It is going to be Lithuania’s first document regulating the development of the hydrogen sector in Lithuania. The guidelines establish strategic directions on how the hydrogen sector will be developed in Lithuania and how it will contribute to the reduction of CO2 emissions. It is planned to establish 3 green hydrogen valleys in Lithuania, which will aim to develop production capacities, integrated projects of the industrial, transport, energy sectors, production of components of the green hydrogen chain, create a favourable investment environment.
  • Pr Hydrogen generation capacities will be developed by “Vilniaus šilumos tinklai” and it is planned that the production of hydrogen will begin in 2025.
  • On 22 April 2024, a support scheme of EUR 24 million was announced for investments in the creation of green hydrogen production capacity. It is expected that these investments will create about 30 MW of green hydrogen production capacity in Lithuania, and the annual volume of hydrogen production will reach more than 4,000 tons.

SOLAR

  • On 7 November 2023, the Constitutional Court of the Republic of Lithuania found that it is unconstitutional to impose a 2 GW cap for the development of solar power plants without also regulating the rights and obligations of the developers who have already started the development process but could not finish it due to the imposed cap. The possibility of continuing the development of solar power plants was regulated by the decision of the Government when it had to be regulated by the law. In other words, the Constitutional Court of the Republic of Lithuania concluded that the imposed 2 GW cap is constitutional, but failure to regulate the rights and obligations of the developers once the cap is reached is unconstitutional. On 19 December 2023, necessary amendments to the legislation were adopted to address the ruling of the Constitutional Court of the Republic of Lithuania.
  • On 19 December 2023, a net-billing scheme was introduced alongside the already established net-metering scheme. The net-billing scheme is mandatory for commercial prosumers and for all prosumers who by the right of ownership or other legal grounds use a wind farm. The law also allows to opt-in into the net-billing scheme for certain subjects.

STORAGE

  • Last October, the biggest energy storage system in the European Union started its operation at full capacity. The energy storage system consists of four energy storage parks, 50 MW each, and can react in just a second in the event of disturbances in the electricity network and help ensure uninterrupted transmission of electricity.

Reforms to come:

Most significant reforms in Lithuania, the so called “Breakthrough Package II”, were adopted in mid-December of 2023. The Breakthrough Package II, among other things, introduced:

  • net-billing scheme (mandatory for commercial prosumers and for all prosumers who by the right of ownership or other legal grounds uses a wind farm);
  • implanted the ruling of the Constitutional Court of the Republic of Lithuania regarding the 2 GW cap for the development of solar power plants;
  • obligation for electricity suppliers to provide more detailed information about prosumers generated and consumed electricity;
  • more detailed requirements for developers who intend to build renewable energy power plants for the prosumers;
  • more detailed regulation regarding the renewable energy communities;
  • extended duration of the permits for the development of electricity generating facilities and energy storage facilities (except for solar power plants with less than 6 MW of permitted generating capacity) from 36 months to 48 months;
  • more detailed regulation regarding the possibility of the network operator to use the developers’ guarantee;
  • obligation to mandatorily settle certain disputes via the National Energy Regulatory Council before going to court.

 

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