1. Renewables in Lithuania: Reasons for Slownes in the Past and Future Expectations Prof. Jurgis VILEMAS Lithuanian Energy Institute SAS Radison” Vilnius, Hotel “SAS Radison” June 10, 2008 Renewable Energy: Development and Sustainability” International conference “Renewable Energy: Development and Sustainability”

2. In the past Very low imported fuel prices (less than 100$/1000m 3 ) in comparison with renewable energy production cost until 2006–2007. Major renovation of buildings was not cost efficient. Consequence: up to now in heating sector main fuel is imported natural gas. Only about 5% of buildings corresponds to modern energy efficiency standards.

3. Inherited from the past totally centralized energy sector after restructuring, required more time than was expected for building up the local initiative, skills, knowledge and culture Renewable energy is small scale decentralized technology requiring local operational skills and in country capacities for equipment production and maintenance

4. Inherited district heating systems with major fuel – heavy oil (1991~2000) without any metering in production and consumption side was very attractive place for non transparent business and self enrichment of some individuals, who was not interested in modernization Some flaws and mistakes in energy system restructuring in 1997 left municipalities with very large financial debts for many years with very limited possibilities to renovate and introduce new fuels (renewables)

5. In spite of low electricity prices in Lithuania introduction of heat pumps was not affordable for home owners due to high installation cost (low disposable income)

6. Primary Fuel Balance of District Heating System

7. Changes in Use of Renewable Energy Sources

8. Consumption of Renewable Energy Sources

9. TodayToday Positive results of decentralisation of management in 1997 and later privatisation start appear only in recent years Fast prices rise from 2005 and recent natural gas price shock created completely new situation, extremely favourable for fast introduction of renewables and other local fuels

10. Appearance of local industry (production of different boilers, metering and control equipment, etc.) design and consulting services which can fully satisfy the needs Needed legislation for promotion of renewables is partially available (feed in tariffs tax, exemtion etc.) But … renewables and particularly energy efficiency is not governments real priority in energy sector. Too strong and to one sided political concentration on only one problem of Lithuanian energy sector – security of electricity supplies left heat supply sector and energy efficiency issues without adequate attention

11. In coming 5–10 years heat supply and renovation of housing stock will be one of major economical, political and social problems for the country in general and problem No 1 in energy sector Situation is particularly dangerous because it can coincide with possible economical slow down or even crisis

12. Something about the future Strongest driver for possible radical change in governments policy, energy industry and consumers behaviour-permanently high prices for all types of primary energy resources The success of Scandinavian countries is very valuable subject for emulation and helps to reduce the skepticism of some influenciable actors of Lithuanian energy policy

13. Strong strategical intension of Lithuanian Government to reduce independence on imported energy may help for speeder employment of local resources in Lithuanian National Energy Strategy there is quite clear emphasis on energy efficiency and renewables: expansion of combined heat and electricity production; faster utilisation of wind energy; 20% of renewables in 2020, but the strategy must be supported by efficient real actions

14. Generation of Electricity from Renewable Energy Sources

15. Cogeneration Potential – Power Production

16. Cogeneration Potential – Heat Production

17. It looks that todays realities in energy markets promotes the swift and substantial changes in governmental policy and priorities, consumers behaviour and opens great opportunities for local business.

18. Thank You for attention!