Lithuania’s Shift: From Gas Reliance to Bioenergy Heating Solutions
Project background: Lithuania was heavily dependent on Russian-supplied natural gas in the early 2000s. Over the past two decades, Lithuania has undergone an energy transition, shutting down the two reactors of its only nuclear power plant in 2004 and 2009. During this period, the country steadily increased its bioenergy share while reducing its reliance on gas. As a result, most of Lithuania's combined heat and power production, district heating, and residential heating have switched from natural gas to biomass.
Transition to market: Lithuania has reached a record share of renewable heat. More than half of Lithuanian households are connected to district heating, and the numbers continue to increase
Investor support: State support played an important role in the initial takeoff of biomass. However, recently, state support for biomass has become more limited, and new subsidies for smart solutions, in combination with solar and heat pumps, are in the pipeline. There are heat supply companies in the Lithuanian DH sector that are mainly owned by municipalities and also independent heat producers
Market success: Thanks to the country's vast forest resources (covering one-third of the land), local biomass, and technological progress, energy prices have been decreasing since 2011. As a result, local biomass has a competitive advantage, with the average price of biomass used for district heating being roughly one-third of the price of natural gas.
Biomass contributes significantly to the Lithuanian economy by employing 7,500 people in biomass technology, production, and supply. Additionally, the average salary in this sector is 1.5 times higher than the national average. Moreover, the annual turnover of the biomass sector is approximately €410 million.
Impact: In Lithuania, from 2000 to 2018, the use of biomass in the district heating sector increased from 2% to 67.5%, largely displacing imported gas (Lithuania paid the highest price in the EU for imported gas). This shift has enhanced energy security through the use of sustainable local renewable energy sources while also reducing energy prices.
Read more:
210426_Lithuanian _DH_fin (lsta.lt)
Lithuania 2021 – Analysis - IEA
Lithuania 2021 Energy Policy Review (iea.blob.core.windows.net)
