Lithuania (2012)

Degree of reliance on imported energy:

Lithuania has a major nuclear power station with installed capacity of 3,000 MW.  However, fuel for this plant is imported exclusively from Russia. 
 
 
The imports/exports balance by energy source in 2009 was as follows (all units ktoe): 
 
Solid Fuel: 139.72/ -11.10 
Crude oil: 8796.5/ -115.1 
Oil Products: 474.3/ -6789.9 
Gas: 2185.7/0 TJ 
Electricity: 410.6/ -662.4 
Biomass: 79.3/ -198.4

Main sources of Energy:

Total installed electricity capacity (2010, source: Litgrid): 3,872 MW 
- Thermal: 68.2% 
- Hydro-electric: 26.5% 
- Renewables (primarily Biomass/Wind): 5.3% 
 
Lithuania has almost no primary energy resources. Primary energy supply is still dominated by imports from Russia (crude oil, natural gas, and nuclear fuel). The decommissioning of Ignalina NPP Unit 2 in December 2009 prompted implementation in the national energy policy of a new nuclear plant construction program by 2015, in order to satisfy the needs of all Baltic nations. 
 
 
Share of Total Primary Energy Supply* (2009, IEA): 8388 ktoe 
<ul>
<li>
Oil: 27.0%</li>
<li>
Natural Gas: 25.2%</li>
<li>
Nuclear: 33.3%</li>
<li>
Hydro: 0.4%</li>
<li>
Biofuels and Waste: 9.5%</li>
<li>
Geothermal/ solar/ wind: 2.7%</li>
<li>
Coal/ peat: 1.9%</li>
</ul>

 
*Share of TPES excludes electricity trade 
 
 
The electricity production by fuel source type in 2009 was as follows (source: Enerdata): 
Nuclear: 70.6% 
Natural Gas: 12.9% 
Hydroelectric: 7.4% 
Oil and Products: 5.6% 
Wind: 1.0% 
Biomass: 0.6%

Country:

Lithuania

Extent of the network:

National electrification rate (2000):  99% 
 
In total, the Lithuanian transmission network comprises of 1,671 km of 330 kV lines, and 4,967 km of 110 kV lines. In terms of international high voltage electricity interconnections, Lithuania has 4×330 kV and 3×110 kV lines connected to the Latvian electricity system; 5×330 kV and 7×110 kV lines with the Belorussian system, and 3×330 kV and 3×110 kV lines with the Kaliningrad region.

Capacity concerns:

The biggest problem in the electricity sector is the dependence on the electric power grid, which includes other Eastern Europe countries.  If the electricity supply is disrupted within the network, Lithuania does not have the flexibility to import electricity from the West. In 2007, through Estonia and Latvia, Lithuania was able to import/export electricity via the NordPool market of Scandinavian countries, somewhat mitigating this pressure. 
 
The final closure in 2009 of the Ignalina nuclear power plant has put increased pressure on the country’s other sources of generation to cope with demand. Installed electricity capacity has fallen  by 23% since 2007. 
 
Energy consumption has increased by 9.5% in 2007 compared to 2006.

Potential for Renewable Energy:

RE in Lithuania accounts for approximately 9.3% of the primary energy production. 
 
Biomass energy 
The total installed capacity of wood based boiler plants (straw, biogas, and biofuels) amounts to some 125 MW, making it the dominant renewable energy by number of plants and capacity installed. . Biogas also holds a significant potential in the country, with separated biodegradable waste from the industrial and residential sectors being able to provide 87.4 million cubic metres of biogas annually, for an electricity production of 524.4 GWh. However, development has been slow in the biogas market, due to scepticism from companies and the population in general. 10-12% of the straw stock of Lithuania is estimated to be available for use as fuel. 
 
Wind energy 
Since 2007, the use of wind energy has increased.  In 2008, the installed capacity amounted to 52 MW . As of 2011, this had increased to 161 MW .  A wind atlas is available for the country, indicating a total potential resource of roughly 500 MW, with average wind speeds of 6 m/s at 30m in coastal regions. However, there is little interest for wind energy from the government . 
 
Hydro power 
Up to now, hydropower has been the main renewable energy source for power production. 
Due to the topographical conditions, the potential for hydropower is rather low. The economically feasible potential for hydro resources is estimated at 2.2 billion kWh/ year . Approximately 14% of this resource is currently being exploited. Legislation protecting many of Lithuania’s rivers from development for ecological and cultural reasons hampers further exploitation of hydropower . 130 possible locations have been identified for the renovation or construction of small hydropower plants, with a potential production of up to 60 million kWh/year. 
 
Geothermal energy 
The National Energy Strategy and the National Energy Efficiency Program foresee the development of geothermal energy. Barriers towards development of this energy source include little technological experience, and currently low heat prices. Lithuania has some geothermal resources, and a demonstration plant of 41 MW. Total geothermal heat production in 2007 was 32,400 MW . Electricity generation potential from geothermal resources exists mostly in Western Lithuania, and the potential for heat pump use in private housing has also been examined. 
 
Solar energy 
Solar energy does not contribute a significant amount to power production at the moment. The use of solar energy for hot water, heating, and agricultural use has risen in recent years . Despite this, the solar resource potential is poor, but suitable for seasonal use, with 80% of the annual insolation distributed between the months of April and September. The total annual potential of solar energy in Lithuania is approximately 1,000 kWh/m2.

Potential for Energy Efficiency:

In the National Energy Efficiency Program it is estimated, that it is possible to save 20-50% of currently consumed energy and energy resources . 
 
The National Energy Efficiency Program for 2006-2010 (adopted in 2006) is an inter-institutional program aimed at increasing the efficient use of energy resources and energy, as well as the monitoring of their implementation in the following sectors: buildings and their engineering systems, cogeneration, district heating, equipment in enterprises, establishments and households, transport, as well as indigenous, renewable and waste energy resources . 
 
Lithuania is a net importer of energy sources and electricity, with 4.78 TWh of electricity imported in 2009. Transmission and distribution losses are not at a problematic level in the country, 6.5% in 2009 . TPES/capita stood at 2.73 toe in 2008. The transport sector contributed most to final energy consumption in 2008, with proposals having been made to improve efficiency in the sector through biofuel substitution.

Ownership:

The Lithuanian energy sector is going through major changes at present, including the decommissioning of the largest electricity generator in the country - Ignalina Nuclear Power Plant. 
 
On the 28th of June 2007, the Law on the Nuclear Power Plant was approved. The aim of this law is to lay legal grounds for the construction and management of new nuclear power plants and to replace the current Ignalina Nuclear Power Plant. 
 
As a result of vertical integration, LEO LT AB was engaged in electricity generation, transmission, distribution and supply. The two main problems concerning unbundling of Lithuanian electricity sector may be indicated: (i) separation of supply from distribution and transmission and (ii) unbundling of generation and transmission activities. 
 
After perpetual allegations of corruption, and widespread public condemnation of the formation of an apparent monopoly so soon after the opening of the power market, the Lithuanian government decided to unbundle LEO LT AB into its constituent companies once more. As such, Lietuvos Energija AB (<a href="http://www.lpc.lt/en">http://www.lpc.lt/en</a>) handles generation, transmission and retail of electricity, particularly the operation of two hydro-electric power plants. The Transmission System Operator (TSO) Litgrid (<a href="http://www.litgrid.eu/">http://www.litgrid.eu/</a>) is responsible for the stable operation of the national electricity system. Distribution is open to competition, with 21 market actors as of 2008. Of these, three suppliers are public, Rytu Skirstomieji Tinklai AB (East Distribution Network), VST AB (Previously - West Distribution Network), and Visagino energija (VI). 
 
Lietuvs Dujos AB (<a href="http://www.dujos.lt/index.php?lang=2">http://www.dujos.lt/index.php?lang...), a joint stock company, is the sole holder of the license to engage in gas marketing in Lithuania. This undertaking owns the gas transmission network. There are 6 natural gas distribution companies. 
 
AB Geonafta (<a href="http://www.geonafta.lt/en.php">http://www.geonafta.lt/en.php</a>) is the main exploration and production company for oil in Lithuania, with AB Mazeikiu Nafta (part of Orlen Lithuania <a href="http://www.orlenlietuva.lt/en">http://www.orlenlietuva.lt/en</a>) being the main supplier of gasoline and diesel products. Orlen Lithuania also operates the distribution network for oil and products in the country.

Structure / extent of competition:

From July 1st, 2007 all electricity consumers in Lithuania can freely choose to buy electricity from any independent supplier. For those consumers, who did not choose to buy electricity from an independent supplier, the public supplier is supplying electricity under regulated prices. The public supplier is obliged to supply electricity for everyone who is willing to buy it. Presently, distribution network operators perform the public supplier function in the region of their licenses. 
 
However, the case of Lithuania shows that current regulation of legal unbundling, which is formally consistent with the directives of the European Union, does not safeguard the existence of competition in the electricity market. In Lithuania there is no legal requirement for legal unbundling of electricity distribution from public supply activities, which results in cross subsidization and creation of barriers for new market entrants. After the unbundling of LEO LT AB, generation, transmission and distribution are now carried out by several companies, with regulated third party access to the transmission network. The market is based on bilateral agreements either between producer and supplier, or between market operator and producers . 
 
The energy sector reforms focus mainly on transparency of costs, commercial relations in the power sector, and fulfilment of the EU Electricity Directive. 
 
In 2007, in the electricity supply sector, 6 companies held licenses of public suppliers, 18 companies were licensed as independent suppliers, whereas 8 companies were actually engaged in the activities of the independent supplier.

Existence of an energy framework and programmes to promote sustainable energy:

The National Energy Strategy is the main document setting the guidelines for the energy sector. General provisions of the energy sector are regulated by the Energy Law 2002, amended 2007. Sectoral requirements are set in the separate Laws (Electricity Law, Heat Law, Biofuel Law, and Law on Nuclear Power Plants), and the Law on Energy . 
 
The National Energy Strategy until 2025 was approved on 18th January 2007 by the Seimas of the Republic of Lithuania (Lithuanian parliament), which contains long term energy development directions including energy savings and RE-energy targets . 
 
Selected key objectives of the strategy are : 
- to put into operation a new regional nuclear power plant no later than 2015 in order to satisfy the needs of the Baltic countries and the region (thus helping replace the Ignalina Nuclear Power Plant  decommissioned in 2009); 
- by 2010, to accumulate and continuously maintain the stocks of petroleum products and oil equalling 90 days’ consumption, 
- no later than 2012, to connect Lithuania’s high tension electricity networks with the networks of the Scandinavian countries and Poland; 
- to increase the share of renewable energy resources in the national balance of primary energy to at least 20% by 2025; 
- to increase the share of the electricity generated by combined heat and power plants during the heating period in the national balance of electricity generation to 35% in 2025; 
- to save 9% of final energy over the period of 9 years in comparison with the level of final energy consumption in 2005. 
 
Resolution Number 1426 of the Government of Lithuania, on October the 6th 2010, contained the National Energy (Energy Independence) Strategy of Lithuania. Selected objectives of this strategy include a diversification of energy imports to improve energy security by 2020, as well as an increase in energy production from renewable energy sources to 23% by 2020, in line with EU goals. Energy efficiency is also targeted under the strategy, with a goal of reducing final energy consumption by 1.5% annually until 2020, with particular attention being paid to transport and building thermal energy efficiency. 
  
A new National Energy Efficiency Program for 2006-2010 was approved by the Government of the Republic of Lithuania. The aims set in the program are : 
- renovation of buildings and updating their energy facilities; 
- increasing energy efficiency of energy production and use in all sectors, with special attention to district heating, industrial processes, household and transport sector; 
- usage of renewable, local and secondary energy resources 
 
A Lithuanian Government Order for mandatory inclusion of energy efficiency criteria in public procurement was approved in 2008. According to this order, public institutions shall set minimum efficiency requirements in technical specifications (e.g., shall purchase fridges with no lower than an A-rated energy efficiency label)  . 
 
A feed-in tariff with purchasing obligation exists in the country, offering rates from 26 LTLc/kWh for hydro power to 30 LTLc/kWh for wind power and biofuels. There also exists a transportation obligation, which ensures that in times of limited grid conductivity, electricity from renewable energy sources will be preferentially utilized. A 40% discount on standard grid connection fees is also available for generators utilizing renewable energy sources. In addition, a guarantee-of-origin certification system was instituted in 2008, with certificates issued by Lietuvos Energija AB.

Current energy debates or legislation:

The 2007 Law on Energy provides regulations for the state energy market, as well as energy efficiency in Lithuania and energy development for the future. 
 
In May 2011, "competitive proposals from potential strategic investors" were received for the construction of a new nuclear power facility on the site of the former Ignalina plant, from Westinghouse and Hitachi GE. In July, the government selected Hitachi as strategic investor, though it will be GE Hitachi which does the engineering, procurement and construction (EPC contract). In October 2011 the government formally notified the European Commission of plans for the new nuclear power plant at Visaginas to be built in collaboration with Estonia, Latvia and Poland.

Major energy studies:

The Lithuanian Energy Institute (<a href="http://www.lei.lt/index.php?k=9">http://www.lei.lt/index.php?k=9</a>) produces an annual energy report detailing the current state of power generation and consumption in Lithuania, as well as scientific studies of technology improvements, and energy planning strategies to improve the Lithuanian power sector.

Role of government:

The Government formulates and implements state policy in the energy sector, and approves the plans and programmes for the implementation of the National Energy Strategy. 
 
The Ministry of Energy (<a href="http://www.enmin.lt/en/">http://www.enmin.lt/en/</a>) has been in charge of the energy sector since 2009, a role which was previously performed by the Ministry of Economy (<a href="http://www.enmin.lt/en/">http://www.ukmin.lt/en/</a>). The Ministry of Energy pursues state policy in the energy sector, and drafts and approves legislation regulating supply safety, installation, exploitation, efficiency and technical issues. 
 
The Ministry of Environment (<a href="http://www.am.lt/VI/en/VI/index.php|">http://www.am.lt/VI/en/VI/index.php|</a>) is in charge of environmental protection and construction. 
 
Municipalities regulate heat supply to customers and issue permits for liquefied oil gas.

Government agencies in sustainable energy:

The State Enterprise Energy Agency (<a href="http://www.ena.lt/en/next_apie.htm">http://www.ena.lt/en/next_apie.htm</a>) promotes the efficient use of energy resources as well as the use of renewable energy. Their responsibilities include drafting the National Energy Policy and the preparation and implementation of measures to increase energy efficiency, for inclusion in national policy. 
 
The Ministry of the Environment is responsible for implementing statutes provided under the Energy Law. 
 
The Lithuanian Energy Institute (LEI, <a href="http://www.lei.lt/index.php?k=9">http://www.lei.lt/index.php?k=9</a>) carries out research, consultancy and promotional activities in the energy sector, in areas defined and financed by the Government, as well as with international companies and organisations. Part of their remit is the development of energy economy planning methods, investigation of safety and reliability of the power plants, their impact on the environment, efficient energy consumption and the use of renewable energy sources. 
 
In addition, there are a number of commercial and non-profit organisations active within the field of promotion of energy sources, including the Lithuanian Hydropower, Biomass and Wind Associations, as well as the District Heating Association, and the Housing and Urban Development Agency, active in building energy efficiency.

Energy planning procedures:

Part of the National Energy Strategy is a commitment to extend the Lithuanian energy network to connect with Scandinavian countries and Poland, in order to further trade and reduce tension on the system. In January 2011, the European Commission allocated 613 million Litas (117 million Euro) for the development of the LitPolLink project, to connect the Polish and Lithuanian electricity grids.

Energy regulator Date of creation:

The National Commission for Prices and Energy (NCC, <a href="http://www.regula.lt/en/">http://www.regula.lt/en/</a>) was set up in 1997  under the Law on Energy of 1995. NCC mission is to ensure the quality and availability of energy services to consumers, creating equal conditions for all market participants. This commission is in charge of:
<ul>
<li>
Setting prices for electric power, district heating, hot water, and natural gas.</li>
<li>
Supervision of the transmission and distribution system of operators,</li>
<li>
Exercising market monitoring and surveillance, and control over supply reliability and quality of services. 
 </li>
</ul>

Degree of independence:

The NCC is made up of a chairman and four members, appointed by the President of the Republic, appointed and dismissed by Parliament on the recommendation of the President.  Financing for the Commission comes from the state budget, via a separate budget. The NCC is not bound by any direct subordination relations with other institutions. 
 
After a survey carried out under the instruction of the Ministry of Economy, the Commission was found not to differ in independence of activity within the energy sector from the majority of other European institutions. The survey concluded that the Commission is “an independent institution, delegated with the functions as foreseen in the Directives and some other additional functions.”

Regulatory framework for sustainable energy:

The new Law on Electricity adopted by the Lithuanian Parliament on July 1, 2004 complies substantially with the provisions of the EU Electricity Directive relating with market opening and surveillance, sustainable energy development and energy efficiency. 
 
The 2007 Law On Biofuel regulates the management of the heat sector by the state, as well as market activities of heat sector actors and the responsibility of the government to the customer.

Regulatory roles:

The additional functions of the NCC include: 
 
The supervision of sector operators in the areas of transmission and distribution,
<ul>
<li>
Market monitoring and surveillance,</li>
<li>
Controlling supply reliability and quality of service,</li>
<li>
Approving the methodology for setting state regulated prices,</li>
<li>
Controlling the application of state regulated prices and tariffs.</li>
</ul>

 
Directions of NCC activities:
<ul>
<li>
to protect consumer rights and legitimate interests;</li>
<li>
to ensure transparent, non-discriminatory, predictable business conditions in every energy sector, by promoting competition, self-regulation and technological changes;</li>
<li>
to increase efficiency of entities activities through economic regulatory incentives and implementing requirements for enforcement measures;</li>
<li>
integration into the EU's single market and regulatory space;</li>
<li>
transparent, open, flexible institution's activity.</li>
</ul>

Role of government department in energy regulation:

The Government, through the Ministry of Energy, defines the overall policy and establishes the procedures for purchasing electricity generated from RE resources. 
 
The Ministry of Economy implements the State policy in the energy sector . 
 
The Ministry of Environment plays a major role in the drawing up of RE resources programme preparation.  (http://www.am.lt/VI/en/VI/index.php#r/109)  . 
 
The State Nuclear Safety Inspectorate (VATESI, <a href="http://www.vatesi.lt/">http://www.vatesi.lt/</a>) is responsible for regulating the nuclear power sector of the country, including plant safety, the disposal of radioactive waste, and the physical protection of state nuclear facilities and resources .

Regulatory barriers:

The legal and institutional framework in the energy industry is still developing. The energy regulator is still funded by the state, and its independence in setting regulations is dependent on government appointments. There are some financial mechanisms in place for promoting sustainable energy. Energy planning in Lithuania currently is more concerned with replacement of recently-decommissioned nuclear resources, and as such the framework for sustainable energy needs some development.

References:

IEA Energy Statistics (2009). Available at: <a href="http://www.iea.org/countries/non-membercountries/lithuania/">http://www.... [Accessed 16th September 2013] 
 
Austrian Energy Agency Country Profile - Lithuania. Available at: <a href="http://www.enercee.net/countries/country-selection/lithuania.html">http:... 16th September 2013] 
 
National Control Commission for Prices and Energy. Annual Report on Electricity and Natural Gas Markets of the Republic of Lithuania to the European Commission. 2011. Available at: <a href="http://www.energy-regulators.eu/portal/page/portal/EER_HOME/EER_PUBLICAT... 16th September 2013] 
 
World Energy Council. 2007 Survey of Energy Resources- Solar Energy. 2007. Available at: <a href="http://www.worldenergy.org/documents/solar_country_notes.pdf">http://www... 16th September 2013] 
 
EBRD (2009) Lithuania Country Profile. Available at: <a href="http://www.ebrd.com/downloads/legal/irc/countries/lithuania.pdf">http://... 16th September 2013] 
 
National Control Commission for Prices and Energy (NCC). About NCC. Available at: <a href="http://www.regula.lt/en/about-us/ncc-profile/index.php?spec=y">http://ww... 16th September 2013] 
 
Republic of Lithuania. Nuclear Energy in Lithuania. Nuclear Safety. 2011. Available at: <a href="http://www.vatesi.lt/fileadmin/documents/Ataskaitos/VATESI_EN_V.pdf">htt... 16th September 2013] 
 
LITGRID - Lithuanian Electricity Transmission System Operator. <a href="http://www.litgrid.eu/index.php?lang=2">http://www.litgrid.eu/index.php?... 16th September 2013] 
 
Koverovas, P. (2009) Renewable Energy in Lithuania, presentation for Sorainen Law, Helsinki, Finland, 7 October 2009. Available at: <a href="http://www.suli.fi/seminars/Koverovas_Renewable_energy.pdf">http://www.s... 16th September 2013] 
 
The Lithuania Tribune (2011) EU to Allocate Funds for Electricity Grid Between Lithuania and Poland. Available at: <a href="http://www.lithuaniatribune.com/5063/eu-to-allocate-funds-for-electricit... 16th September 2013] 
 
Ministry of Energy, Republic of Lithuania (2010) National Energy (Energy Independence) Strategy of Lithuania. Available at: <a href="http://www.enmin.lt/en/activity/veiklos_kryptys/strateginis_planavimas_i... 16th September 2013] 
 
World Nuclear Association (2012) Nuclear Power in Lithuania. Last updated August 2013. Available at: <a href="http://world-nuclear.org/info/Country-Profiles/Countries-G-N/Lithuania/"... 16th September 2013] 
 
Lithuania Energy Institute website. Activities. <a href="http://www.lei.lt/main.php?m=248&k=9">http://www.lei.lt/main.php?m=2... 16th September 2013]

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