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Lithuania’s green growth – interview with Vice Minister Rytis Kėvelaitis

At the end of April, a meeting between the European Union’s ministers responsible for energy policies took virtually place. Everybody agreed that the EU Green Deal will play an important role in bringing a sustainable recovery to the EU economy. 

CEENERGYNEWS spoke with Rytis Kėvelaitis, Vice Minister at the Ministry of Energy of Lithuania, about the importance of renewables, investments in infrastructure and the country’s future energy mix.

“COVID-19 brings significant challenges to the society, but also some opportunities,” he underlines, mentioning two main opportunities in the energy sector: to accelerate green growth as a part of economic recovery package and bring renewable energy supply chain back to Europe. 

In Lithuania, the Ministry of Energy and related ministries are mobilising public funds to achieve the targets of the National Energy Independence Strategy and National Energy and Climate Plan. It is expected to tender an over 300 million euros public funding support to investments in renewable energy, energy efficiency and grid infrastructure. This support is expected to bring over one billion euro total investment in the energy-related infrastructure in the coming years and mitigate the economic impact of COVID-19.

“Besides, the medium-term economic recovery package for 2021-22 expects to deliver 450 million euros public funding in the fields of renewable energy, energy efficiency and grid infrastructure. All this public investment in green growth enables to stabilise the economy and create the long-lasting infrastructure,” he continues.

Renewables play an important role in the Baltic country. Wind accounts for more than half of the energy supply generated by renewable energy sources (RES), followed by biomass, biogas and solar. Early in April, the parliament approved draft laws that will allow producers of electricity from RES will be allowed to directly conclude contracts and sell energy to end-users. This should make green energy even more attractive among companies.

“The aim is to continue and accelerate different measures to achieve the targets of the National Energy Independence Strategy and National Energy and Climate Plan (45 per cent of renewables by 2030),” Mr Kėvelaitis says. “In the electricity sector, there are three key areas: prosumer development, technology-neutral auctions and offshore wind development. We have made significant progress in the first two areas, as the number of prosumers increased threefold last year and regulatory changes enable virtual net-metering, while first technology-neutral auction happened last year.”

When it comes to offshore wind farms, very recently the Ministry of Energy has submitted a draft Government Resolution to create a favourable environment for wind farms in the Baltic Sea.

“The offshore wind regulatory framework will be created this year,” the Vice Minister says. “Ministry has already submitted a 700 megawatts (MW) territory in the sea for the Cabinet of Minister’s approval, which will be followed by further regulatory improvements regarding revenue stabilisation, grid connection and permitting. It is planned to have an auction for offshore in 2023 and the project will be operational by 2028 and provide over 25 per cent of Lithuania’s electricity needs.”

In order to diversify every country’s energy mix, also natural gas and nuclear are often considered as bridge fuels towards a sustainable future. Lithuania is showing concerns regarding Belarus’ Astravets nuclear power plant (NPP) and it is now calling on the other Baltic countries to sign a political declaration.

“It is of utmost importance that all nuclear power plants comply will all the highest nuclear safety requirements and regulations,” reminds Mr Kėvelaitis. “All States must give priority to safety. Lithuania’s main concern is the security of Belarus Astravets NPP. It is an intolerable situation in Belarus regarding safety issues. We can see that there are efforts to speed up the construction and launch the Astravets NPP without the implementation of even essential nuclear safety requirement.”

Therefore, Lithuania is urging Belarus to implement all recommendations by international institutions before the nuclear power plant will be put into operation.

“We are convinced that this is not only the question of safety for Belarus people, neighbouring states but a question of the security of the whole EU,” Mr Kėvelaitis continues. “Taking into account the source of the threat it should be clear for everybody that in a worst-case scenario the consequences would be felt very widely. European institutions must continue to focus on the processes taking place at the border of EU and take further immediate actions in ensuring that all EU stress tests and independent experts recommendations are met before the commissioning of the Belarusian NPP. This Lithuania‘s position is supported by other EU countries.”

On the other hand, natural gas is an important source in Lithuania, especially considering that the demand for liquified natural gas (LNG) is growing and the terminal of Klaipėda started the allocation of its LNG capacity.

“Klaipėda LNG terminal is important for Lithuania‘s national energy security, it is also a tool to ensure competitive gas prices for our industry and households,” says Vice Minister Kėvelaitis.

LNG and natural gas have an important role to play for Lithuania’s transition towards the national target of 100 per cent energy from renewable energy sources by 2050. Natural gas is a back-up and balancing source for the development of renewable energy and electricity system. With gradually increasing shares of renewable energy sources (wind and solar power) in the energy mix, high flexibility provided by the gas infrastructure is essential for the efficient operation of the electricity system.

Also, he reminds how LNG is used as a fuel for trucks and ships and therefore is considered to be one of the cleanest and affordable alternatives in the coming decade for reducing emissions in heavy transport and maritime industry.

Finally, another important step the energy independence is the integration of regional gas markets of the Baltic countries and Finland. In April, the respective Energy ministries agreed on a roadmap establishing a process for the future regional gas market integration, which will be the first four-country wide cross-border gas market merger in the EU.

“Energy ministries, regulators and transmission system operators from Estonia, Finland, Latvia and Lithuania are working together with the European Commission to reach an agreement on the four EU countries market merger by 2022,” confirms Mr Kėvelaitis. “This year is dedicated to analytical works and public consultations which are needed to design and to agree on a joint tariff model and inter-TSO compensation (ITC) mechanism for the common Baltic-Finnish market. For Lithuania to join the common gas market area of Latvia, Estonia and Finland there is a need to find a balanced and economically viable solution for ITC mechanism. At the same time, we are analysing the possibilities for further integration of the Lithuanian and Polish gas markets, which would allow us to use the full potential of the Lithuanian-Polish gas interconnection (GIPL), which will start operating in 2022.”

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