Changes of Promotion of Renewable Energy

Triniti

The purpose of the latest amendments to the Law on Renewable Energy of Lithuania (hereinafter – the Law) is partial restriction of promotion of electricity production from renewable energy.  Based on amendments, which came into force on 1 February, 2013, the development of renewable energy has been taken to a different direction.

Further the article highlights key changes of renewable energy development in Lithuania.

Firstly, without holding an auction the fixed rate will be applied to excess electricity produced by power stations with installed output up to 10 kW only. Prior to the amendments, the excess electricity has been purchased without holding an auction from power stations with installed output up to 30 kW.

Moreover, contrary to the previous regulation, the amendments clearly define the scope of excess electricity which could be purchased under the fixed rate without holding an auction. It is established that excess electricity is defined by not more than 50 per cent of the output of power stations in a user’s electrical power network, where electricity is produced from renewable energy resources, in a calendar year. Following the amendments, the Law sets a limit to the purchase of electricity under the fixed rate from one power plant.

On the other hand, the amendments are aimed at minimizing administrative burden on the producers planning to produce electricity for their own needs.  The producers planning to produce electricity exclusively for their own needs in capacities up to 10 kW of installed output will not be required to acquire capacity development permits. In such cases only notifications to the network operator are required.

Secondly, renewable energy policy targets up to 2020 have been specified. Although the volumes of the installed total output in Lithuania were not replaced, the amendments have changed the principle of calculation of installed total output in wind and solar power stations.

Pursuant to the previous regulation, installed total output in both wind and solar power stations was calculated ignoring power stations with the total installed output up to 30 kW. However, after the amendments came into force, the installed total output of both wind and solar power stations is to be calculated including all the stations regardless of their installed output.  This means that renewable energy policy targets up to 2020 especially in solar energy area may be achieved faster compared with the previous regulation.

As soon as the installed total output reaches renewable energy policy targets, the allocation of promotion quotas and the acceptance of applications to connect the power stations up to 10 kW of the installed output will be suspended. The suspension will continue until the values of the installed output will be increased or free promotion quotas (in case no power stations will be built during the period indicated in the permit) will come up.

Thirdly, according to the amendments, the promotion of renewable energy will also be restricted in the following ways:

1. by refusing to connect power stations up to 30 kW of installed output to the grid connection free of charge;

2. by refusing to immediately connect to the grid connection power plants with installed output up to 350 kW and which is not higher than the allowable output in the nearest connection point in the grid connection.

Fourthly, the National Control Commission for Prices and Energy will recalculate the highest fixed auction rates and establish them on quarterly basis rather than on annual basis as it used to be.

Nevertheless, the part of amendments is aimed at minimising administrative burden on power station developers. As it was mentioned before, a power station up to 10 kW of installed output can be developed without capacity development permit (if the plant is used only for developers’ own use).

Moreover, a capacity development permit could not be refused to be issued in case the producer is non-compliant with the tax liabilities of the state where the producer is registered as a tax payer.

Summing up, despite some reduction of administrative burden, the amendments to the Law provide a quite significant direction of the renewable energy promotion and development in Lithuania. However, it is not the main issue today. Until the amendments came into force more than 15 thousands requests were submitted asking to issue capacity development permits for development of solar power stations up to 10 kW of installed output. The procedure how the above-mentioned developers could complete their projects, was established under a separate law.

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