Luxembourg buys up surplus energy to hit renewable target, in EU first

Lithuanian and Luxembourgish leaders met in Vilnius to sign the first cooperation mechanism deal on renewable energy. [Robert Dackus/ Lithuanian Presidency]

Lithuania and Luxembourg became the first EU member states to agree on the transfer of renewable energy statistics on Thursday (26 October), meaning the Grand Duchy will now probably hit its 2020 target. Estonia hopes to broker a similar deal to finance its wind power ambitions.

In 2015, Lithuania met its 2020 renewable energy target of 23% and renewables now hold at least a 25.75% share of the Baltic state’s energy mix. Conversely, Luxembourg is yet to meet its 11% goal, managing only 5%.

The EU’s Renewable Energy Directive (RED) allows member states to opt for statistical transfer agreements, under which a certain amount of renewable energy can be shifted from one country’s books onto another’s.

Lithuania and Luxembourg are the first to take advantage of this mechanism, with the Grand Duchy revealing in its latest energy report that it plans to exploit these agreements in order to hit its target and help the EU reach its 20% by 2020 goal.

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RED is currently being updated and it is expected that the cooperation mechanism will be kept in the revised version, as it allows member states greater flexibility in reaching their targets.

It is fostering a form of solidarity in which countries with more abundant, cheaper renewable energy sources can choose to help out member states that have fewer resources at their disposal.

The mechanism does not involve the actual transfer of generated energy from one country to another, instead, the two parties agree to transfer statistical data only.

The European Commission’s Director-General for Energy, Dominique Ristori, welcomed the “ground-breaking agreement” between Lithuania and Luxembourg, calling on other member states to do this same, particularly with 2030 renewable energy targets in mind.

At a ceremony in Vilnius on Thursday (26 October), attended by Lithuanian President Dalia Grybauskaitė and Grand Duke of Luxembourg Henri, the agreement was signed by both countries.

Lithuanian Energy Minister Žygimantas Vaičiūnas hailed it as “one of the events of historical importance for the whole of the EU” and a “practical bilateral success”.

Vilnius agreed to transfer part of its 2018-2020 renewable surplus to Luxembourg and a minimum of 700GWh, with Lithuania expected to profit around €10m as a result. That money has already been earmarked for other renewable energy projects and research.

Luxemburgish MEP Claude Turmes (Greens/EFA) praised the two member states for making the most of what is possible under EU law, warning countries that are not on track that there is “no excuse” for failure to hit targets.

WindEurope CEO Giles Dickson was also enthusiastic about the deal and hoped that the revenues generated by the transfer will be reinvested into wind power, adding to Lithuania’s existing 500MW capacity.

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Estonia eyes more power

More agreements of this nature are possible in the future, as many EU countries are lagging behind in meeting their 2020 targets. Holder of the rotating EU presidency Estonia recently produced this factsheet that details the amount of surplus energy it has to offer.

Indeed, Luxembourg’s economics ministry revealed that it plans to take Estonia up on its offer and sign another cooperation deal in Tallinn early next month, adding to the likelihood that it will hit the 2020 goal. The specifics of the agreement have not yet been released.

Estonia hopes to finance a large-scale wind farm by brokering another cooperation agreement further down the line. Plans are in motion to build almost 1GW of offshore wind in the Baltic Sea if 2020 targets are taken into account when fixing the bloc’s 2030 goals.

Tallinn would need longer term assurances to invest money in such a large project, which would likely not be completed before 2020.

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