OVERVIEW - Baltics' renewable energy on the rise, with exceptions

The expansion of renewable energy in the Baltics over the past couple of years has been robust and fast and clean energy faces good prospects in each state.

Yet, to employ the sports vocabulary, the champion is Estonia, Lithuania is a runner-up and Latvia is at the bottom. If we exclude the latter's hydro capacities, it is one of the worst renewable energy performers in the entire EU.

“It is estimated that the Baltic region has some of the most favorable renewable energy expansion conditions in Europe. So how and if they will translate into clean energy projects depends on the support of politicians in the three states. Not always it has been there, unfortunately,” Martynas Nagevicius, president of Lithuania’s Renewable Resources Energy Confederation (LRREC), told Renewables Now.

ESTONIA

The best environment for renewables is in Estonia, according to Nagevicius. There, although the buoyant oil shale industry plays an important role in the tiniest Baltic nation’s economy, there is a strong understanding that in the future the country cannot rely much on energy sources with high levels of carbon dioxide (CO2) emissions, including oil shale.

“Thence Estonia is transitioning away from fossil fuels and to biofuels, photovoltaics (PV) and wind. Estonia is also among the EU leaders in introducing electric and hybrid cars,” the LRREC chief emphasised.

Estonia saw outstanding growth in renewable energy investments in 2016, at EUR 69.3 million (USD 77.7m). This exceeded the combined amount invested in the 2013-2015 period.

“The added renewable sources for electricity production capacities accounted for 42.19 MW. There is now some 456.6 MW of installed renewable energy capacity in Estonia,” says Erki Ani, the Project Manager at the Estonian Renewable Energy Association (EREA).

There was 3.74 MW of new solar power capacity, bringing the total to 11 MW. The amount of electricity produced from solar panels doubled to 3 GWh in 2016.

“We are expecting to see more 'big' solar parks to be developed in the near future. Within the last six months there have been proposals for nine solar systems with a total capacity of 3.9 MW. I believe the falling prices of the technology, increased awareness and the profitability of solar power is the main cause for the increase,” Ani told Renewables Now.

In the wind sector, a single 7.05 MW wind park was added last year in Estonia, with the total wind power capacity now standing at 310 MW. There are also two big offshore wind projects underway that would add up to 1.3 GW.

Biomass (biogas and waste) account for the major share of all renewable energy in Estonia at 55.6%.

“When in Estonia 1 MWh of produced renewable energy is supported with a mere EUR 22.62, in Latvia the same number is EUR 117.61 and in Lithuania it is EUR 28.64. Only Finland and Sweden offer less in the EU, although Finland’s support is only seemingly smaller due to little support for bioenergy and Sweden uses a different certificate system,” the EREA chief emphasised.

Andres Meesak, head of Estonia’s Solar Energy Association, believes that solar power will see rapid growth this year, too.

“This will be mainly thanks to two major drivers. First, the significant decrease in module pricing since the fourth quarter of 2016, and second, the upcoming change in regulation as of July 1, 2018," Meesak told Renewables Now.

To get the current feed-in premium (FIP) of EUR 53.7/MWh on top of the NordPoolSpot hourly price, the power plant must be commissioned before July 1, 2018.

"In 2017 Estonia will commission several MW-scale PV plants, including one on the island of Hiiumaa in June. There are a number of 10-MW-plus solar power projects in the planning stage, including one of 50 MW, but the commissioning of those in 2017 is still not certain,” Meesak added.

Distributed generation projects and an increase in the construction of near- or net-zero energy buildings is also boosting the PV market in Estonia, according to Meesak.

LITHUANIA

Lithuania’s full-throat embrace of nuclear energy in 2008-2012 has been a huge blow to renewables, LRREC’s Nagevicius said. The endeavour to build a nuclear power plant in Visaginas in eastern Lithuania failed after the 2012-2016 Social Democrat government steadfastly tweaked, postponed and finally “froze” the project at the end of the term, whereas the new Farmers and Greens-led government does not have intention to resume it.

“For long, in Lithuania, the politicians have hinged all their energy expectations on a single source – nuclear energy. Green energy was widely seen as supplemental and auxiliary, therefore its uneven development and the lack in understanding of its long-term impact and benefits,” Nagevicius said.

Yet, in recent years Lithuania has made notable progress in wind power, for example, as shows the 2016 report by the WindEurope. Lithuania in 2016 ranked first in the 27-member bloc for the level of installed wind capacity relative to its power consumption, achieving a ratio of 16%. This compares to Ireland’s 13% and Germany’s 10%.

The new installed wind capacity in Lithuania last year amounted to 178 MW and the average power consumption was at 1.1 GW. In 2016, Lithuania’s renewable energy sources generated 2.02 TWh of electric power, which was 19.3% of the total in the country and more than half of the domestic output.

Meanwhile, the share of bioenergy in the country’s mix has risen from 1% in 1996 to 14% in 2006 and surged to 64% in 2016, according to Nagevicius.

When it comes to solar power, Lithuania’s new government aims at installing approximately 200 MW by 2020 through an improved net metering scheme for commercial and residential PV installations. The scheme was adopted by the Parliament in 2014 but with “too many restrictions”, says Vitas Maciulis, president of the Lithuanian Solar Energy Association (LSEA).

Maciulis believes that, at least for 2017, growth will be limited to around 5 MW. Lithuania had 73 MW of cumulative PV capacity installed at the end of 2016, according to him.

Lithuania has 799.3 MW of operational renewable energy generation capacity currently. Of this, 498.9 MW comes from wind power plants, while biomass and hydroelectric plants contribute with 64.9 MW and 127.9 MW, respectively. The country aims to increase the share of renewables in its electricity mix to 23% by 2023.

LATVIA

Of the three Baltic countries, the renewables’ situation is worst in Latvia, claim energy pundits.

“Likewise in Lithuania, where nuclear energy was put above all the other sources, in Latvia, the gas sector and decision makers have had detrimental impact on the country’s green energy development, slowing it down significantly,” Nagevicius said. “The fact that Latvia, with its immense wind power potential, remains at the bottom of Europe’s renewables users list is hardly explainable,” he added.

Approached by Renewables Now, Kristups Stepanov, head of Latvia’s Association of Wind Energy Producers (LAWEP), said that in 2016 Latvia launched only a three-turbine wind farm of 6.9 MW.

“Frankly, I don’t see any new wind capacities to be commissioned any time soon. There’s a plan of building a 15-MW wind power plant near Ventspils, but it remains to be seen whether it can take off the ground,” he underlined.

Like in Lithuania, offshore wind development has hit a snag in Latvia due to the environmental concerns. “In that regard nothing tangible is expected in renewables until 2020, I’d say. By then there should be a regulatory basis for offshore wind projects,” he said.

Yet the share of hydropower is at an impressive 37.8% in Latvia. “In that regard, we are way more advanced than the neighbours, but our solar and wind developments lag behind Lithuania and Estonia,” Stepanov admitted.

“We look forward to introducing a new renewables support mechanism by the end of the year or in early 2018, and a new auction system has to go into force by 2020. If it happens as planned, Latvia may see a breakthrough,” he said.

Lithuania’s installed wind power capacity is 500 MW today, Estonia’s is at around 300 MW, and that in Latvia is only 70 MW.

(EUR 1 = USD 1.12)

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