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Photo by Judita Grigelyts (V)
Litgrid shares data from its Raida 2050 study with market participants and the public. The study valued at 120,000 euros describes the future of Lithuanian energy for the next 30 years.
The main objective of this study is to delineate the energy direction for Lithuania to know what to expect, to be prepared for the transformation of the system, says Liutauras Varanaviius, Director of the Department of Strategy of Litgrid, in a distributed report.
It is argued that the study can benefit electricity generators, suppliers, industries that buy electricity on the wholesale market, as well as other companies, for example, in preparation for the growth in demand for electricity and related equipment. It can be confused with the Raida 2050 study, which Litgrid has commissioned from DNV GL, an international consultancy.
Electricity is the fuel of the future
DNV GL conducted the study in accordance with the ambitious National Energy Independence Strategy (NENS). Lithuania is expected to become a climate neutral country by 2050, producing 100% of its electricity from renewable energy sources. Currently, RES satisfies approximately one fifth of Lithuania’s total electricity consumption.
The report claims that that goal becomes even more ambitious considering the 2050 Development forecast that over the next 30 years Lithuania’s electricity consumption will increase from the current 13 terawatt hours (TWh) to 20 TWh. Increased electrification in industry, services and especially in the transport sector will have the biggest impact on this.
In both home and industry, solid fuel, biofuel and gas boilers are already being replaced by electric heating and ventilation systems. In the transport sector, the demand for electricity will increase not only because of electric cars, but also because of the switch from electric railways and ports to hydrogen. Thus, other sources of energy are being replaced by electricity from biomass, gas, firewood and gasoline, warns L. Varanaviius.
Most of the electricity is offshore
According to NENS, Lithuania’s electricity needs will have to be met by RES. Experts predict that with the gradual increase in the share of renewable energy sources, in 2050 the main source of production will be wind, which will represent around 40% of the generation structure of renewable energy sources, and another 30 % of the demand will be covered with onshore and solar wind energy.
However, the construction of many wind and solar power plants alone is not possible, as the main deficiency of RES and the difference with the traditional way of generating fossil fuels is that electricity is not produced continuously and capacity cannot be increased or decreased as soon as necessary.
It is necessary for us to provide additional measures for energy storage, so that the needs of consumers are always met, even when the wind is not blowing and the sun is not shining, for example on cold nights when consumption is growing, he says Varanaviius.
The objective is to manage possible price fluctuations
The authors of the Evolution 2050 study point out that doing nothing will cause the system to spike, resulting in rockets in wholesale electricity prices. Already after 2040, in those weeks when there are no winds or sun, wholesale electricity prices can rise to 3,500 Eur / MWh. And vice versa: in sunny and windy weeks, with the maximum increase in RES production, a surplus is formed and the price drops to 0 Eur / MWh. In comparison, last year the average price of electricity in the Lithuanian market reached 46 Eur / MWh.
A period of electricity prices throughout the year could account for about a third of the time. However, this fact is not at all encouraging, since the losses of the free electricity producer should be compensated by the State. Subsidies for the development of RES sources and small storage facilities in this case would reach 180 million. Eur per year.
Doing nothing would be a real luxury. Therefore, the study identifies measures to ensure the stability and reliability of the system during the transition period, to keep prices attractive and manufacturers to ensure sufficient revenue. And the state subsidy should be cut three times, says a representative from Litgrid.
Flexibility measures will be supplemented with hydrogen
Lithuania is advised to promote and implement not only various short-term storage facilities and flexibility measures for consumers, but also to use hydrogen production technologies. They will guarantee the production of hydrogen gas for industry and transport and will contribute to the decarbonization of the sector.
Measures like batteries, electric cars, production postponements, flexible ventilation or heating solutions are only short-term solutions. They allow the consumption to vary for several hours or, in the best of cases, days, but not weeks and months. Therefore, the study suggests a way to transfer excess electricity to hydrogen production. The latter is still used as fuel in various fields, although it is currently cheaper to produce hydrogen using gas, says L. Varanaviius.
Experts predict that hydrogen electrolysis technology will be very promising after 2030. However, he intends to start thinking about these solutions and preparing for them even before Lithuania is ready to improve its technology.
Using the potential of hydrogen electrolysis, the need for subsidies is projected to triple by 2050, to 60 million. Eur per year. The flexibility measures introduced will also help avoid a high wholesale electricity price and maintain a favorable average electricity price for consumers.
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