Energy Policy, Legislative Background, Funds and Programmes
Energy policy
National Energy Strategy until 2025
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 to be decommissioned in 2009);
- by 2010, to accumulate and continuously maintain the stocks of petroleum products and oil equalling 90 days’ consumption;
- by 2013, to develop natural gas storage capacities and maintain the gas stocks equalling up to 60 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.
It is stated in the Strategy that Lithuania with the expected construction of wind power plants, small hydropower plants and biofuel burning CHP plants - shall reach a RES-E target of 7% of gross electricity consumption by 2010 as set in the RES-E EU Directive. [SEIMAS]
National Energy Efficiency Programme
A new National Energy Efficiency Programme for 2006-2010 was approved by the Government of the Republic of Lithuania.
The aims set in the programe 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
Different goals are set in order to reach those aims, such as drafting relevant regulatory documents, dissemination of information and counseling activities. [SEIMAS]
Legislative background
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. Sectorial requirements are set in the separate Laws (Electricity Law, Heat Law, Biofuel Law, and Law on Nuclear Power Plant).
Law on Energy
The Law on Energy, adopted in 2002, amended in 2003, 2004, 2005, 2006, 2007, regulates general energy activities, the basic principles of energy development and management, energy and energy resources efficiency.
The principal objectives of regulating the state energy sector activities are as following:
- security of energy supplies;
- energy resources and energy efficiency;
- reduction of adverse effects of energy activities on the environment;
- promotion of fair competition;
- promotion of consumption of indigenous and renewable energy resources
The main chapters of the Energy Law are listed bellow.
Energy sector management covers such issues as:
- Institutions managing the Energy Sector
- Competence of the Government
- Competence of the Ministry of Economy (implements policy of the State in energy sector)
- Competence of the Ministry of the Environment (it is foreseen that Ministry of Environment takes part in the renewable energy sources programmes preparation)
- Competence of Municipalities
Development of the energy sector covers provisions regarding:
- National Energy Strategy (requirements for approval procedure and for the content of the National Energy Strategy are set in the Law)
- Energy Agency (it is foreseen that Energy Agency promote use of renewable energy sources)
- Construction of Energy Facilities
- Energy Sector Activities
- Transfer of Immovable Property for Use
Regulation of energy sector covers:
- Prices
- Licenses and Authorisations
- The State Control Commission for Prices and Energy (it is foreseen, that this Commission approves prices of electricity from renewable energy sources)
- State Control of the Energy Sector
- Provision of Information
- Efficiency of Energy Resources and Energy
- Qualifications and Performance Evaluation of the Staff
- Reserve Stocks of Energy
- Energy Accounting
- Energy Transit
Besides emergency in the energy sector and the hearing of complaints are discussed. [SEIMAS]
Law on Electricity
The Law on Electricity entered into force in 2002. A revised version of the Law on Electricity entered into force in 2004. This law establishes the basic principles regulating the generation, transmission, distribution, and supply of electricity in the Republic of Lithuania, the relations between providers of electricity services and their customers as well as the conditions promoting competition in the electricity sector.
The main objectives of the Law are:
- establishment of the rights, responsibilities of and mutual relations between the entities in the electricity sector;
- development of a legal framework for the functioning of competition based electricity market and establishment of fair competition between producers and suppliers;
- ensuring and promoting efficiency in the production, transmission, distribution and consumption of electricity;
- ensuring safe and reliable operation of electricity system, electricity generation, transmission and distribution;
- ensuring public service obligations and establishing reasonable, comprehensive and transparent requirements and obligations in the electricity sector;
- promotion of the internal electricity market and electricity export, modernisation of technical facilities for implementation of the market, and development of easy-to-understand and transparent energy pricing;
- creating favourable conditions for investments in the electricity sector;
- promotion of environmentally friendly technologies in generation, transmission and distribution of electricity.
Law on electricity indicates that by imposing the public service obligations the State shall encourage the producers to generate electricity from renewable energy sources and that the National Control Commission for Prices and Energy shall be responsible for ensuring effective competition in the electricity market, non-discrimination of customers and suppliers and provision of all customers with services of established quality. The Commission shall control the terms, conditions and tariffs for connecting new electricity producers, shall guarantee that terms, conditions and tariffs are objective, transparent and non-discriminatory, in particular taking full account of the costs and benefits of the various renewable energy sources technologies. [SEIMAS]
The List of Public Service Obligations
The List of Public Service Obligations approved by the Government of the Republic of Lithuania for the purpose of implementation of the provisions of the Law on Electricity. This list includes the obligation for public and independent electricity suppliers and eligible customers which import electricity to purchase and sell electricity generated from renewable energy sources.
The Regulations for Public Service Obligations
The Regulations for Public Service Obligations approved by the Minister of Economy of the Republic of Lithuania set forth general rules for provision of services related to generation of electricity from renewable energy sources and regulate requirements and obligations for holders of supply licenses, as well as market, transmission and distribution network operators and eligible customers to provide such services.
The Regulations set the requirement, that holders of the electricity supply license and public supply license are obliged to purchase all electricity generated using renewable energy sources from its producers at the established prices and sell it to their customers. This requirement is also applied to eligible customers which import electricity.
Dye to the Regulations there is obligation for the transmission network operator to ensure priority transportation of electricity generated from renewable energy sources via electricity transmission networks in the situations when the grid has limited conductivity. [SEIMAS]
Procedure for the Promotion of Generation and Purchase of Electricity Generated from Renewable Energy Sources
The Procedure for the Promotion of Generation and Purchase of Electricity Generated from Renewable Energy Sources establishes the general criteria, conditions and requirements for promoting the generation and purchase of electricity produced in the Republic of Lithuania from renewable energy sources.
Pursuant to this Procedure, the generation of electricity in wind power plants, biomass power plants and solar power plants, as well as hydropower plants with a capacity of up to 10 MW, and the purchase of such electricity, with the exception of electricity generated as specified in paragraph 4 of this Procedure, shall be promoted.
It is stated in the Procedure, that generators whose power plants are using renewable energy sources for electricity generation are subject to a 40% discount for the connection to the network of operating energy plants. [SEIMAS]
Law on the Nuclear Power Plant
In June 2007 the Lithuanian Parliament approved the Law on the Nuclear Power Plant. Purpose of which is to lay down provisions and to create legal, financial and organisational preconditions for the implementation of a new nuclear power plant project. [SEIMAS]
Law on Biofuel
A revised version of the Law on Heat entered into force in 2007. The Law regulates state management of the heat sector, the activities of the heat sector entities, their relations with heat customers, their interrelationship and responsibility. [SEIMAS]
Baltic Energy Strategy
A proposal for a joint Baltic Energy Strategy was prepared in 2007. The strategy shall outline a framework for the Baltic countries energy sector development in long-term perspective. [Ministry of Economy]
Pollution tax reduction
From 2002 onwards, according to the Law on Environmental Pollution Charge of the Republic of Lithuania, natural persons and legal entities (industry, district heating companies), implementing environmental protection measures that reduce pollutant emissions into atmosphere from stationary pollution sources at least 5 % calculating from the highest fixed permitted pollution standard, under the established procedure shall be exempt from pollution charge if pollutant amount is reduced by 5%. [Ministry of Environment]
VAT reduction
The standard value added tax rate is 18%. Reduced 9% rate of VAT is applied to supplies of services relating to construction, renovation and insulation of residential houses which are financed with state and municipal budged resources or with soft credits granted by the state and resources or state special funds.
Green procurement
According to the National Green Procurement Implementation Programme public institutions shall apply environmental criteria for public procurements at least for 10% of all executed procurements in 2008, 15% – 2009, 20% – 2010 and 25% – 2011. Institutions can choose environmental criteria from the approved list containing also energy efficiency criterion. [Ministry of Environment]
Energy efficiency criteria in public procurement procedures
Lithuanian Government order for mandatory inclusion of energy efficiency criteria in public procurement was approved on 2008. According this order public institutions shall set minimum efficiency requirements in technical specifications (e.g., shall purchase fridges with no lower than A energy efficiency label).
