Written for The Voice of Renewables by Renwise.
Lithuania’s renewable energy capacity is growing impressively, but faces a reality that is holding back projects: only a fifth of the projects that reserved the grid have reached FID
Recently, Litgrid announced that more than 5,400 MW of installed capacity of solar (2,936 MW) and wind (2,467 MW) power plants have already been connected to the Lithuanian electricity grid, and the total installed capacity of renewable resources has now reached 5,775 MW. This is six times more than 5 years ago, when the total capacity of renewable resources in the country was 950 MW – a very significant change.
Such a capacity should generate over 9 TWh of electricity per year, i.e. over 70% of the total annual electricity consumption of Lithuania.
Moreover, Litgrid announces that currently another 4,300 MW of onshore wind, 700 MW of offshore wind, 4,200 MW of solar power plants and 3,500 MW of storage capacity have been reserved in the grid. It is easy to calculate that even if we exclude the offshore wind project, the implementation of which currently looks uncertain, after implementing all the projects currently being developed on land, Lithuania could have close to 14,000 MW of installed solar, wind and other RES power plants by 2030. This amount of power would allow the production of over 27 TWh of electricity per year, which is twice as much as Lithuania’s current electricity consumption and 14 percent more than planned in the National Energy Independence Strategy (23.7 TWh). It is likely that generation could be even greater due to the continued development of producing consumers.
Thus, the potential of renewable energy in Lithuania is large. However, according to unofficial data, only about 900 MW of wind and 750 MW of solar projects that have reserved the grid (i.e. about 20% of the reserved capacity) have made a Final Investment Decision (FID) on their implementation. Project developers are in no hurry to make decisions to continue financing projects, taking into account falling electricity prices in the market, slowly growing electricity demand, no new large electricity consumers emerging in near future and no increase in inter-system electricity capacities.
If only these projects that have reached FID were implemented, Lithuania could still generate about 13 TWh per year from renewable resources, which would be enough to meet current needs, but not to implement the ambitious electricity consumption growth plans provided for in the National Energy Independence Strategy.
In order to implement all projects that have reserved capacity and to unlock the development of further ones, state intervention is currently necessary so that the solar and wind generation projects under development are not discontinued. This requires:
- Introducing state measures that provide basic income for new projects, for example, Contracts for Difference (CfDs);
- Further promoting measures that ensure generation flexibility, such as battery storage;
- Promote faster growth in electricity consumption by accelerating electrification, improving conditions for the emergence of electricity-intensive industries, AI centers and green hydrogen production;
- Introduce dynamic grid tariff models and promote changes in consumer behavior by increasing their demand response to market signals so that electricity production finds a consumer at the real time of its production;
Green hydrogen production projects could be one of the main large-scale and flexible electricity consumers in Lithuania. With abundance of renewable electricity, the production of green hydrogen and its products in Lithuania would both increase the added value created in Lithuania, and could be exported to markets lacking these products, such as Germany or Poland. This also requires the promotion of hydrogen production and consumption, providing motivation to switch to this technology, for example, more favorable network tariffs.
Number of topics on how hydrogen and e-fuels sector will evolve region-wide and how this will push forward wind and solar generation development, will be discussed in Vilnius on November 12 at a dedicated #HydrogenHorizons conference:
