Turning our attention to Green Genius in Lithuania, your home turf, what are the current developments in renewable energy and overall ecosystem of the Baltics?
Looking with a bird’s eye view at the Baltics there are obvious similarities, however each country actually has its own background and set of distinct rules as far as energy in concerned. Latvia has historically been reliant on hydropower, thus with no pressure to up their renewable energy stake too much. Green Genius built the largest solar plant in Latvia to date, of 1 MW. Estonia is slowly moving away from shale gas and growing its green sector, particularly in wind and solar.
In Lithuania first of all we had elections this month, which means there will be a new government and energy minister in place as of November. The current administration has been extremely favorable to the development of RES; in fact just recently we had a conference on the occasion of the Lithuanian Solar Energy Association’s 10 year anniversary in which policy makers and industry alike showed very aligned goals.
One of the most impressive success stories is what happened with the prosumer market, which is on the way to surpass very ambitious growth target. In three years, we saw nearly 10,000 new prosumers, and we expect to reach the target of 40,000 by the end of 2022. By 2030 45% of energy will come from RES and 30% of solar energy will be from prosumers, which is now still at a humble 2%.
How did it come about? On the one hand it makes financial sense, and on the other the process is vastly simplified, from a multi-step, seven month process to a simple two week time frame for installations of up to 30 KW solar plant Lithuania is habitually recognized as the country with the best prosumer regulatory regime in Europe.
Part of this ambitious growth must also come from Lithuania’s need to become less import dependent – is this also creating market opportunities for Green Genius?
Indeed we currently import roughly 70% of our electricity, mostly from Russia and Sweden, and I believe RES is the best tool on the path to energy independence.
Other than that, what do you think makes solar energy so successful in Lithuania?
First of all it is already a proven resource with a decade old history. People do not fear it any longer, and instead embrace its potential. One issue in the past was financing, but at the moment for each 1 KW of energy installed people received 323 EUR, nearly 40% of the CAPEX.
Around 70% of the urban population lives in flats, which makes the importance of developing remote energy sources ever more prevalent and countries’ regulations are changing to be more supportive of this. Lithuania’s state owned energy company Ignitis created a platform which links developers’ energy plants to consumers who can either rent or buy part of the plant. The process is fairly seamless and the consumers are rewarded with a smaller energy bill – plus they can do everything from their computers at home in under five minutes. The model of the decentralization and democratization of solar energy has already proven successful and Lithuania is exporting it to other countries that are showing interest.
Since you mentioned Ignitis, there is always the challenge, particularly in small markets, of the competition between state owned and private energy companies – what is your experience in this regard?
Sure, the competition is there, but if anything we embrace it. It keeps us on our toes. There is also frequent collaboration and overall I would call it a healthy relationship. Back in the day when the state was more fossil fuel oriented we often had disagreements, but now that we are aligned that renewable energy is the right way forward things are much better and we really see eye to eye.
Green Genius is present in several other European markets already and there was a recent announcement for a potential expansion into Romania – what are your plans outside of Lithuania’s borders?
Currently we are looking to strengthen our position in the markets where we are already present, particularly in Poland, Spain and Italy. Expansion wise we have our eye on Central Europe and Romania is on the table. Of course, it also depends on when it is safe to resume business travel because of the pandemics and policies related to that, but the potential is definitely there in our view.
As an investor looking at setting up shop on the Romanian market, the priority is really to have a truly transparent development process from licensing & permitting to operation. Also, the government should work on setting clear regulations surrounding Power Purchase Agreement (PPAs) and giving investors peace of mind that there would be equal opportunities on the market.
Energy democratization seems to be the name of the game at the moment – what is your vision for Green Genius in this context?
The prosumer story in Lithuania is telling of what can be achieved in as little as three years. As always, I believe the sky is the limit. I strongly believe that we can reach 100% RES earlier than 2050. As we already have the capabilities and tools to achieve this, policy makers can simply set the scene right and leave the rest to us.
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