october 11, 2007, warshaw, novotel wind energy – sure way to increase allotment of renewables wind...

October 11, 2007, Warshaw, Novotel

WIND ENERGY – SURE WAY TO INCREASE ALLOTMENT OF RENEWABLES

Wind energy business review and perspectives in Lithuania

Alvydas NaujekasPresident of Lithuanian Wind

Energy Association;CEO Veju Spektras, Ltd.



• Facts chronology;

• Lithuanian wind energy in EU context;

• Wind energy goals in Lithuania;

• Problems of wind energy project implementation;

• Ways of problems solving;

• Wind energy development perspectives.



Facts chronology until 2002:

• Absence of wind energy development background:– no grid connection rules;– no feed-in tarif;– no (still no) legal basis for renewable energy;– bad conditions for Western producers and

investors;

• Attempts to import second hand plants• Attempts to create own technologiess



Fact chronology

• At the beginning of 2002 State Control Commission for Prices and Energy approves feed-in tarif for electricity from wind energy plants – 6,37 EUR ct/kwh until 2010;

• In the middle of 2002 there’s mass agiotage about issuance of “advance technical conditions for grid connection”;

• At the end of 2002 the wind research results made by REC according to UNDP programe was announced .



Fact chronology

• In 2003 Lietuvos Energija and distribution companies receive lots of request to issue advance technical conditions for wind energy plants connection to the grid (power installed exceeds 800 MW);– LE and distributions companies are alarmed;– when coordination EU admission agreement the

aim of 7% electricity production from renewable resources until 2010;

– Ministry of Economy prepares the order of tender;– “zone” idea occurs;

• UAB “Dalis gero” begins construction of first new commercial 600 kW plant in summer 2003.



Fact chronology

• UAB “Dalis gero” begins exploitation of first new commercial 600 kW plant in the beginning of 2004;

• LE announces tenders for “Permission to develop electricity production” in zones III, IV and I in spring 2004;

• New Law on detailed planning enters into force in summer 2004;



Fact chronology

• In 2005 the Government extends the term of 6,37 EUR ct/kwh until 2020;

• LE tenders for production extension are continued;

• In autumn 2005 UAB “Vėjų spektras” receives permission for construction of 30 MW wind park and begins the road construction works;



Fact chronology

• In 2006 LE tenders for production extension are finished for whole 200 MW in zones I-VI;

• The following plants, parks are built and functioning:– UAB “Vėjų spektras” - 18 MW; – UAB SNP – 1,2 MW;– UAB “Kuprijus” – 0,8 MW;

• In total 20 MW;• Few small second hand 50-150 kW power

plants are built in Telšiai, Jurbarkas, Skuodas regions;



Fact chronology

• In 2007 the following plants, parks are built and functioning:– UAB “Achemos hidrostotys” – 16 MW;– UAB “Vėjų spektras” - 12 MW;– A. Karapetiano – 2 MW;

• total 30 MW;



Fact chronologyNewly Installed Capacities [MW]

0

5

10

15

20

25

30

35

2003 2004 2005 2006 2007

Metai

MW



Wind energy electricity production 2006-2007Production of Wind Energy In Lithuania, kWh

108.126130.563129.969142.461 81.104 70.716 109.345156.020

10.542.452

10.040.152

7.900.627

8.796.0999.294.393

2.749.608

1.162.981

110.550

0

2.000.000

4.000.000

6.000.000

8.000.000

10.000.000

12.000.000

20

06

.02

.01

20

06

.03

.01

20

06

.04

.01

20

06

.05

.01

20

06

.06

.01

20

06

.07

.01

20

06

.08

.01

20

06

.09

.01

20

06

.10

.01

20

06

.11

.01

20

06

.12

.01

20

07

.01

.01

20

07

.02

.01

20

07

.03

.01

20

07

.04

.01

20

07

.05

.01

Date

Ele

ctr

icit

y,

kW

h



Lithuanian wind energy in the context of EU

• EU “White Paper” for Energy future: Renewable energy resources” (COM(97)599);

• EU Directive 2001/77/EC “For promotion of energy production from renewable energy resources within domestic market”;

• EU Energy policy 2007;



Wind energy goals in Lithuania

• On current grid conditions is possible to produce up to 2,8 TWh/year (Gross consumption in Lithuania is 14 TWh/year);

• It is possible to install 1200 MW wind energy plants + offshore plants;

However present development is very slow.



Problems

• Since 2004 the investment costs into conditional MW are increasing rapidly:

» WECs – from 0,7 to 1,2 mln. € (2007) 85%;

» Construction works – 100%;» Transportation – 50%;» Designing-planning – 250-300%;» Land – no forecast.



Problems• The official state energy strategy still fossil fuel and nuclear

oriented, which have very negative consequences for development of renewables;

• Despite formal declarations, strategy for development of renewables not supported by any governmental institutions;

• High resistance from grid transmition utilities; • Low investment return (due to low wind electricity purchase

price the term for investment return is increasing, it’s not worth to invest);

• Due to strict environmental regulations and high price of land is not possible to develop wind farms on allocated areas;

• Too long and complicated planning regulations, lasting 18 – 20 months;

• Is very long-lasting time of wind turbines supply, due to extremely high needs;

• These conditions blocking financial flows for investment projects, increasing interest rates, complicating conditions for loans;



Ideas for solving the problems

• To develop legal base for renewable energy: – Separate Law on Wind Energy;– or as a part of the Law on Renewable Energy;

• To set wind energy as a priority;• To change current system of tendering for grid

connection;• To increase the feed-in tariff to 7,5 – 9,2 EUR ct/kWh;• To cover entire country for development of wind

energy (not only allocated sites near the Baltic Sea);• To form a budget for compensation of prices for

renewable energy instead of current budget of public interest;

• To simplify land use planning procedures;



Lithuanian wind energy development perspectives

0

100

200

300

400

500

600

700

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Metai

Inst

alle

d c

apac

ity

[MW

]



THANK YOU FOR ATTENTION!

october 11, 2007, warshaw, novotel wind energy – sure way to increase allotment of renewables wind...

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