In 2016, the Lithuanian Chief of National Defence approved the Map, specifying areas in which planning and construction of wind power plants exceeding 100m in height can be limited (the map is available at: www.e-tar.lt/portal/lt/legalAct/55f57a70d6d411e583a295d9366c7ab3). The planning and construction of wind power plants exceeding 100m in height has to be approved by the Civil Aviation Administration. In the border zones, planning and construction of power plants exceeding 30m in height needs in addition to be approved by the Lithuanian State Border Guard Service. According to the Lithuanian Energy Institute, these limitations are related to the investments in air monitoring systems. Some air surveillance radars used by the Lithuanian military forces are obsolete and therefore there is a risk that the rotating blades of wind power radar signals can be interpreted incorrectly. However, if project developers agree to finance the acquisition of new and improved radars, there are no problems and wind power plants can be constructed, except in the red marked areas. In 2018, the National Defence acquired several in-fill radars, which allow to mitigate negative impacts of wind power plants on the air surveillance. Two new radars are planned to be tested and if they meet the expectations of the National Defence, areas where wind development is currently prohibited might be available for wind power development. Currently, due to the potential negative impact on air surveillance radars, wind power development is prohibited in around 1/5 of the Lithuanian territory.

In July 2017, the Law on Energy from Renewable Sources was amended. According to these amendments, only public authorities have the right to carry out preliminary studies necessary to determine economically meaningful areas for offshore wind power plants in the Baltic sea and their capacities (a study is currently being carried out). Previously, this right was not limited to public authorities only. Therefore, there are companies who already carried out such preliminary studies and made huge investments, because according to the previous Law version, those having carried out preliminary studies had the right to participate in the tenders for the construction of offshore wind power plants. Thus, despite several preliminary studies were already carried out by private companies, and around 70% of the sea is already explored, preliminary studies will now be once again carried out by the Government, which will take around 3 years. All this hinders offshore wind power development in Lithuania.

According to the Lithuanian Wind Power Association, since private initiative with regard to the exploration of the Baltic sea is now limited, wind power project developers are rather focusing on onshore wind projects.

In Lithuania, the development of hydropower is virtually stopped due to strict environmental requirements. By amending the Law on Water in 2004 it was forbidden to build dams on the ecologically and culturally valuable rivers. However, the industry believes that there is potential for further development of hydropower, while still maintaining a balance between the need for environmental protection and the benefits of renewable energy. There is a number of new and advanced hydropower technologies that can be used.

There is a need for a political will and a long-term strategy concerning the development of the hydropower sector. Such a strategy should establish concrete implementing measures for the support of hydropower in the country.

In Lithuania, producers of solar power for self-consumption (net metering) have to pay to the grid operator the fee for the electricity storage. The amount of this fee is calculated according to the methodology approved by the National Commission for Energy Control and Prices. The stakeholders share the opinion that this electricity storage fee is not adequate. First, the storage fee components include inter alia the amortisation of the high-voltage lines, despite the fact that the electricity for self-consumption is not even fed into the high-voltage grid. Second, the fee includes a loss of profit by the Lithuanian DSO (AB “Energijos skirstymo operatorius” - ESO). In addition, it has to be noted that electricity is fed into the electricity grid when it is most expensive on the market (in summer, over the course of the day) and is taken out of the grid when it is cheapest (in winter, in the evening). However, this benefit for the Lithuanian DSO is not taken into consideration.

Until 1 June 2018 the fee amounted to € 0,0388/ kWh, which makes 30% of the selling price for natural persons. On 12 April 2018 the Government approved the draft amendments to the Law on Energy from Renewable Sources and Law on Electricity, which came into effect from June 2018. The amendments aim at improving conditions for the consumers generating electricity from renewable energy sources for their own needs (prosumers). As a result, prosumers can currently choose the most convenient payment method for their electricity generation and consumption needs: 1) paying for each kWh of electricity recovered from the electricity grid, 2) paying a fixed monthly fee depending on the capacity of the renewable energy installation (kW), 3) a hybrid pricing model combining a lower rate for each kWh of electricity recovered from the electricity grid and also a lower fixed monthly fee (option 2 above), or 4) paying for the use of electricity grid with self-generated electricity, i.e. leaving the grid operator a certain amount of self-generated electricity that has been supplied to the electricity grid.

With these amendments, the Government aimed at reducing the storage fee for prosumers. However, according to the stakeholders, this aim has not really been achieved. In practice, if you choose the first payment option you pay the same storage fee as prior to the amendments.

The legal framework for net metering has to be adjusted.

The Law on Energy from Renewable Sources sets caps for financial support (feed-in tariff in combination with tenders) until 2020. These caps for all technologies had already been reached several years ago (2015-2016) and since then no tenders for feed-in tariffs have been organised. This was one of the key barriers over the past several years.

In December 2018, the Parliament approved a new support scheme for technology neutral tenders in combination with a premium tariff (premium on the market price), which came into effect from 1 May 2019. 3 TWh of electricity will be supported with the premium tariff until 2020 (under the previous support scheme caps were set in MW, differentiated per technology). Moreover, foreign companies will be allowed to participate in tenders too. First technology neutral tender is expected to take place in September 2019.

In general, Lithuanian stakeholders are positive about having a new support scheme in place, since in Lithuania it is too early for projects without state support. However, there are also certain concerns. Some stakeholders from the solar power sector fear that if tenders would be technology neutral (as currently planned), wind power would win all tendered capacities since currently electricity from wind is the cheapest among all renewable technologies. Therefore, from today's perspective tenders are not relevant for the solar power industry, so the Lithuanian Solar Power Association. On the other hand, stakeholders from the wind power industry communicated that solar power prices are approaching wind power prices and therefore they fear that solar power would win all the tenders. The Lithuanian Biogas Association is of the opinion that biogas and biomass cannot compete with solar, wind and hydro power, as the generation of electricity from biomass and biogas incurs additional cost (related to the cultivation, assembly, processing, transportation, etc). In addition, some stakeholders perceive the premium tariff scheme as risky, since premium tariff includes both a floor and a ceiling. Thus, if the bid price is not in this so called "corridor", renewable energy generators can sell his electricity for a market price. This is risky, since market prices is unpredictable. The higher the risk, the more reluctant are the banks to provide financing. Moreover, balancing will now be the responsibility of RES-E producers, instead of grid operators. RES-E producers will also need to fully cover the grid connection cost (previously, 40% of the connection costs is reimbursed for plants < 350 kW and 20% for plants > 350 kW). So many benefits have now been removed from the RES-E producers which means greater risks and greater reluctance of banks to provide loans.

State should provide attractive investment environment for renewable energy generators, less controll is needed. The price should be defined by sound competition and not state control and regulation.

In municipalities, a real estate tax is levied on wind power plants. The implied tax rate differs per municipality. Municipalities with the greatest wind power development apply the highest tax rate. Such taxing regime hinders wind power development, even though the Law on Renewable Energy Sources provides that the municipalities should encourage the development of renewable energy in their territory.

In Lithuania, there is a lack of financial support incentivising the use of biogas from gasification in electricity generation processes. Other technologies that use renewable energy sources to produce electricity (e.g. wind) are more appropriate and cost-effective.

In Lithuania there is a lack of state support for immature, experimental and not very popular renewable energy technologies. This is due to the lacking state funds.

In Lithuania, some administrative procedures are perceived as too long. This includes state aid approval procedures with the European Commission or the drafting and launching of the new planned tender procedures for renewable technologies.

With the amendments to the Law on Energy from Renewable Sources of 2017, administrative procedures for roof-top PV systems up to 5 kW have been significantly improved. As a result, the duration of administrative procedures for these systems has been shortened from previously 4 months to approx. 1 month now. According to the stakeholders, the duration of administrative procedures for roof-top PV systems exceeding 5 kW should also be shortened. Respective legal amendments have already been drafted and are expected to come into effect from October 2019.

According to stakeholders, the allocation of financial support in Lithuania is spontaneous, uncoordinated and unpredictable. Support is granted by the Lithuanian Environmental Investment Fund, the Environmental Project Management Agency, the Ministry of Agriculture, etc. As far as roof-top PV systems are concerned, there is only predictability with regard to the new support scheme - investment support for newly installed roof-top PV up to 10 kW. Within the frame of this scheme, € 16 million will be allocated by 2022.

Farmers willing to install integrated roof-top PV systems in their farms are not eligible for support from the EU structural funds administered by the Ministry of Agriculture. The measure provides support for the replacement of asbestos roofs with less harmful roof coatings. Support differs depending on the type of the roof coating chosen. However, the support conditions do not specify whether support is possible if an integrated roof-top PV system is chosen instead of asbestos roofing. The essence of this support scheme is public health. Choosing an integrated roof-top PV system would not only protect health, but would also bring economic benefits to individuals producing their own electricity (prosumers). With support covering also integrated roof-top PV systems, the goals of the new Energy Independence Strategy for increasing the number of prosumers by 2050 could be reached more quickly.

Stakeholders indicated that greater development of small-scale solar power in Lithuania is hindered because prosumers have no possibility of using self-generated electricity in other geographic locations than the location of electricity generation. For example, to install a roof-top PV system and generate electricity in homestead in rural area and to use it in an apartment in a multifamily house in a city. This is however planned to be introduced from October 2019.

According to stakeholders, a greater dissemination of information on renewable energy is needed in Lithuania. Public awareness on renewable energy should be increased, since public support is very much important, especially when it comes to new, advanced technologies in their vicinity. So far, the public lacks unbiased information on the benefits and deficits of renewable technologies. For example, users of solid biomass boilers in private houses should be informed about the need to use biomass in a sustainable way. In addition, there is a need to improve access to the information on renewables to SMEs.

It is recommended to base the electricity storage fee on the maximum AC power of inverter instead of currently nominal power of a solar PV module. PV system of 10 kW not necesserely needs to have a 10 kW inverter. If solar PV module is not directed to the south and the angle is less than 35° then the inverter power can be lower. Therefore it would be more reasonable to calculate the installed capacity of PV system and the electricity storage fee according to inverter's power.

When planning a wind farm construction, a project developer needs to receive written consents from all owners of the land plots located in the sanitary protection zone, even before the EIA takes place. Often project developers need either to buy or rent these land plots or compensate the owners of these land plots. Thus, there are some monetary aspects here.

The solution here would be to adopt special plans defining areas that prohibit wind power development, while in the rest of the territory wind power development would be automatically permitted.

With the Regulation No. O3E-232/2018, the National Commission for Energy Control and Prices transposed the requirements for grid connection of generators set in the Commission Regulation (EU) 2016/631 of 14 April 2016 into the national law. One of the requirements for PV systems exceeding 10 kW is to have a supervisory control and data acquisition (SCADA) system. This system costs about € 5.000 and is therefore too expensive for small PV systems. According to the solar industry, balancing should be one of the responsibilities of the grid operator.

In Lithuania, municipal action plans for the use of renewable energy sources were expected to significantly encourage their deployment in municipal territories. The adoption of such plans containing targets for renewable energy and measures for their achievement for the period 2011-2020 is envisaged in the Law on Energy from Renewable Sources (RES Law) and is mandatory. According to the law, first action plans were due to be adopted by municipalities by the end of August 2012. However, in 2018 less than 1/3 of the municipalities had such plans in place.

To assist local authorities in drafting their plans and to accelerate the drafting process, a methodology for drafting municipal action plans for the use of renewable energy was published in 2017. However, the expected positive results were not achieved.

To date still only around 30% of the municipalities adopted action plans, mainly those who are in favour of renewable energy because they are aware of the benefits of renewable technologies. The problem is that no sanctions/ penalties are envisaged in the legislation for the failure to adopt these plans. Moreover, the benefits of such plans for municipalities are not quite clear, since they mainly benefit to RES project developers. If it is more difficult to deploy renewable energy sources in bigger cities, in rural areas there is a great deal of possibilities to deploy all kinds of renewable energy sources like solar and wind power, biogas and biomethane, geothermal energy, etc.

The process would also be accelerated if municipalities would be responsible for air quality and CO2 emissions in their territory and would have targets in this respect. In this case they would be interested in adopting new measures, including increasing RES deployment in their territory.

The solution could be to involve municipalities in RES projects as partners. If municipalities would benefit from RES projects, they would be interested in having more RES projects in its territory. It would also be possible to encourage/ promote the idea of community capital. So far, this funding mechanism is not widespread in Lithuania yet.

According to data from the State Enterprise Agriculture Information and the Rural Business Center, the number of cattle and pig farms decreased by 27% (partly due to the African swine fever or the so-called milk crisis) between 2015 and 2018, and thus also the amount of available feedstock for biogas production.

The construction of biogas plants in Lithuania is discouraged by certain requirements for the EU support. To obtain the maximum amount of support (€ 1.6 million) for the production of biogas from agriculture and other waste under the 2014-2020 Rural Development Programme for Lithuania, a biogas power plant has to have an installed capacity of more than 0.5 MW. However, eligible for this support measure are only small and very small businesses. As a result, the capacity limit of 0.5 MW is simply too high for the addressees of this support measure. The amount of manure needed for the operation of biogas plants of at least 0.5 MW can be created only on large livestock farms.

In addition, some of the EU structural funds for 2014-2020 have not been used. For example, up to date € 12 million for the promotion of small-scale (up to 5 MW electrical capacity, with a total rated thermal input not exceeding 20 MW) biomass cogeneration has remained fully unused. The great majority of heat generating companies put their applications on hold due to the limiting requirement of 16 years when calculating depreciation of biomass boilers. Due to this limitation around 30 MW of new/ renovated biomass boilers remained uninstalled (total project value is around € 10 million).

Currently locally produced biogas can hardly compete with the cheaper natural gas from Russia. In addition, the new Liquiefied Natural Gas (LNG) terminal has been launched in December 2014 leading to lesser or no demand for locally generated biogas. Due to the chaper natural gas, investments in the construction of biogas plants have become too expensive.

In Lithuania, RES related competencies are scattered between several Ministries and therefore coordination is often a long-lasting and complex process. For example, the Ministry of Education is responsible for the policy-making in the field of education and dissemination of information, however, renewable energy is not among its priorities. For RES policy-making the Ministry of Energy is responsible, but it receives no financing for education and information dissemination measures. When it comes to biogas, gas as end product is under the responsibilities of the Ministry of Energy and the support under the Ministry of Agriculture.

In Lithuania, renewable heat producers have two options of connecting to the gas network – connecting to the gas transmission network or gas distribution network. If a heat generator connects to the transmission network, the total heat that he produces from renewable sources is purchased by the Lithuanian gas network operator,“Lietuvos dujos”. On the other hand, if a renewable heat facility is connected to the distribution grid renewable heat supply may not exceed consumer demand for heat. Thus, for example heat from biogas can be produced and supplied all the year round but since during the warm season the demand for heat is very low (or there is no demand at all), biogas production during this period is simply economically not viable. All the more that seasonality is not reflected in the tariff setting methodology.

Renewable heat producers have two options of connecting to the gas network – connecting to the heat gas transmission network or to the gas distribution network. For heat generators it is much more expensive to connect to the transmission system, however, in this case their total produced RES-heat is purchased by the Lithuanian gas network operator “Lietuvos dujos”. If renewable heat generators choose the cheaper connection to the distribution system, heat supply may not exceed consumer demand for heat. Thus, for example heat from biogas can be produced and supplied all the year around but since during the warm season the demand for heat is very low (or there is no demand at all), biogas production during this period is simply economically not viable. This seasonality is not reflected in the tariff setting methodology.

Thus, if one decides to connect to the distribution network, a huge problem is the supply limitation by consumer demand. On the other hand, if connecting to the transmission network, a huge barrier becomes the cost of connection, especially for small-scale biogas plants.

A way out here might be an investment support for grid operators when connecting renewable energy plants to the gas grid.

Seasonality is not reflected in the tariff setting methodology. This constitutes a barrier for biogas (for more information see barrier 10LTHC “Costly grid connection”).

Irrational decisions by state and municipal authorities hinder the greater use of biomass boilers in Lithuania. This for example concerns the planned construction of the Combined Heat and Power plant (CHP) in the city of Kaunas. Currently existing small-scale biomass producers already cover 90% of the city’s heat demand. If this plant is constructed, there will be no need for energy from small-scale biomass plants anymore and they might go bankrupt.

In Lithuania, nearly 70% of the centrally supplied heat is currently produced from solid biomass. However, when the threshold of 80% is reached, investments in solid biomass boilers will become economically unattractive. In fact, due to seasonality, this technology can be used at full load only for 1-2 months per year and so far in Lithuania there are no technical possibilities to accumulate and store the produced heat. Further investments in expensive solid biomass boilers in some Lithuanian cities would lead to higher costs of heat. Therefore, some of the cities are already starting to think about diversifying renewable energy sources (e.g. the inclusion of solar thermal in their central heat systems).

In Lithuania the air pollution control system is not properly regulated. Due to the release of methane into the atmosphere, manure should be treated as a source of contamination and therefore treated as waste under the Waste Management Act. It should not be possible to use unprocessed manure for fertilisation. However, this is currently the case in Lithuania. If properly regulated, more manure could be used for biogas production and from the processed manure an organic and environment-friendly fertiliser could be used.

In Lithuania, the deployment and use of electric vehicles and charging infrastructure is hindered because electric vehicles are not regulated in the existing national legislation. There are only Guidelines for the development of the public infrastructure for electric cars in place, which were adopted in line with the Directive 2014/94/EU on the deployment of alternative fuels infrastructure in March 2015. Without regulatory framework and clear strategic long-run perspective in place, the deployment of electric vehicles and the development of infrastructure will proceed very slowly in Lithuania.

Lacking financial support hinders expansion of electric vehicles in Lithuania. Since the purchasing power of Lithuanian consumers is very low, the vehicle price alone eliminates a lot of potential buyers simply because they are not able to afford to finance the vehicle. Thus, in order to accelerate growth of the electric vehicle market, purchase of electric vehicles as well as development of charging infrastructure should be supported by the state. However, currently there are no support schemes offering financial assistance for those acquiring electric cars.

According to the Ministry of Energy, a barrier in the transport sector is the public opposition to the biofuel blending obligation, because it increases fuel prices. A new biofuel obligation scheme should be introduced, which would be designed in coordination with the relevant stakeholders. This way the oposition would be reduced or even removed. It is planned to draft a new biofuel obligation scheme beyond 2020.

The revised National Energy Independence Strategy foresees that by 2050, 50% of the energy consumption in transport sector would come from renewable energy sources. However, there is currently no specific support mechanism that would lead to the emergence of production infrastructure and would encourage the consumption of biomethane in transport. The strategy implementing the Action Plan with the measures until 2022 envisages several measures to achieve the 50% target for 2050, such as financial support to promote the production of biomethane in transport produced from agricultural and non-municipal waste; or the development of the public infrastructure for biomethane used in transport. These, however, are awaiting their implementation (planned for 2019).

In Lithuania, there are no taxes on passenger cars based on CO2 emissions. This impedes the increased use of both electric vehicles and cars driven by biofuels.