Challenges for community energy in Pagramantis (Lithuania)

Background: What does community energy look like in Lithuania?

In Lithuania, the description of an energy community and the principles of its operation are defined by law: “Renewable energy community means any independent legal entity with the purpose of operating a non-profit organization that owns, develops, consumes, stores and sells energy from renewable sources in nearby renewable energy installations.” 

The main goal set by the national energy independence strategy is to provide 45% of energy consumption with renewable energy by 2030. For example, collective electricity production in solar power plants is not suffi­ciently developed in Lithuania, however, very favorable conditions have been created for individuals and legal entities to become prosum­ers, with increased quotas and flexible pricing for grid access.

Through the Co2mmunity program, an expert-driven RENCOP (Renewable ENergy Cooperative Partnership) has been established in Lithuania with members including two universities, representatives from munici­palities, and national associations (renewable energy, solar energy), and three private companies engaged in renewable energy tech­nology. The RENCOP has focused on raising awareness of community energy projects and clarifying social, financial, and ecological benefits. 

What are the challenges for community energy in Pagramantis?

Since 2018, the formation of an energy community in the municipality of Pagramantis has been in the making. As of now, the community continues to conduct electricity-consumption studies and source financial sources for its Photovoltaic renewable energy project.

However, the Pagramantis community is not a business entity, but rather a consortium of persons who are living in this village – while being registered as a (non-commercial) legal entity. This is the most important issue regarding the definition of community energy: as part of the law, it is required to establish a legal commercial entity, i.e. a non-profit public organization. That means, the profit must go to the benefit of the shareholders, but no financial gain is possible for the investors. So while all shareholders in the community invested their own money, the profit can solely be reinvested in the development of the solar park or other ways to improve the wellbeing of the entire community. This is the reason why the model is not business-friendly.

What are the next steps?

Our local partners continue to work with urban and rural communities to find more pilot cases, educate about the possible benefits, and develop renewable energy projects in general. They are in on-going communication with public administration representatives and offer informative webinars for housing associations about solar PV models and government-supported financing options.

What is still needed is a clearer and more business-friendly definition of a renewable energy community, its objectives, and area of operation. Furthermore, the partners are working on a better strategy to identify and support possible energy communities in apartment communities, as well as more ways of raising the interest of municipalities. Lastly, greater support and participation are needed regarding the granting of bank loans and the electricity distribution network operators.