EU Approves Lithuania’s RE Support Scheme

• The European Commission has granted its approval to 2 policies of the Lithuanian government supporting electricity production from renewable energy sources
• Launched in 2012, this scheme with a total budget of €1,242 million ($1,422 million) has got the European Commission's support for the aid granted under the scheme between 2012 and 2015
• The second policy relates to the government's grant reductions to energy intensive industrial users on a levy paid by final electricity consumers
• Finding the 2 policies in line with the EU environmental objectives and state aid rules, the EC granted its approval

Lithuania has received approval from the European Commission for 2 schemes to support production of electricity from renewable energy sources and energy intensive users. Both these schemes, said the EC, contribute to the country's transition to low carbon and environmentally sustainable energy supply, in line with the EU's environmental objectives and state aid rules.

The first scheme was launched in Lithuania in 2012 to support producers of electricity from renewable energy sources comprising wind, solar, biomass, biogas and hydro. It is supposed to remain in effect till 2029 with an overall budget of €1,242 million ($1,422 million). Now, the EC has approved aid granted under this scheme between 2012 and 2015 when beneficiaries were selected through a competitive process. Winners were granted support in the form of a feed-in-premium for 12 years. This feed-in-premium meant the generator could sell the electricity in the market and receive top-up payment over the market price.

Those generating clean power from small scale electricity plants below 30 kW get support in form of feed-in-tariff for 12 years. Since 2013, it has been reduced to below 10 kW. Calling the aid proportionate and limited to the minimum necessary with an incentive effect, the EC approved it.

Lithuania finances its support scheme for producers of electricity from renewable energy though a levy paid by final electricity consumers. Under the second policy approved by the EC, Lithuania plans to grant reductions on this levy to energy-intensive industrial users that are exposed to international trade, such as companies manufacturing fertilizers. Beneficiaries will obtain compensation for 85% of the levy paid the previous year if they demonstrate an electro-intensity of at least 20%.

"These two schemes will allow Lithuania to both continue supporting the development of renewable energy sources in the country and to preserve the competitiveness of electricity-intensive companies by reducing their contributions to the financing of this support," said -Commissioner Margrethe Vestager, at the EC in charge of competition policy. "This will contribute to Lithuania's transition to low carbon and environmentally sustainable energy supply, in line with the EU environmental objectives and our state aid rules."