Lithuania is making strategic moves in 2025 to enhance its energy security, transition to greener solutions, and create a more competitive energy market. Key developments include heightened security measures for critical infrastructure, such as the NordBalt electricity link with Sweden, and a significant shift in how balancing costs will be distributed across the energy sector.
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LITHUANIA
Security of critical infrastructure
On 13 January 2025, the Lithuanian Armed Forces signed a cooperation agreement with Lithuania's transmission system operator Litgrid. The agreement focuses on improving the security of the NordBalt electricity link with Sweden, along with other critical energy and telecoms infrastructure in the Baltic Sea. In recent years, these objects have become a frequent target for sabotage, which can have serious consequences for the security and economy of the region. Cooperation with Litgrid will help strengthen defence mechanisms and ensure that the Baltic Sea and its underwater structure remain protected from external threats.
Transfer of balancing costs
The balancing costs, which are currently covered by all electricity consumers, will be passed on to the producers and suppliers. To give market participants time to prepare for the change, starting from 2026 the balancing costs will be gradually transferred to the producers and suppliers: in 2026 the producers and suppliers will cover 30% of the balancing costs, in 2027 – 60% of the balancing costs, and from 2028 onwards – 100% of the balancing costs
Offshore wind farm tender suspended to improve conditions for consumers
The Government has approved the Ministry of Energy's proposal to temporarily suspend the offshore wind tender announced on 18 November 2024 and to review the tender conditions. The main objective of the decision taken is to ensure that the implementation of the tender and the construction of the offshore wind farm will have the lowest possible impact on the final electricity prices paid by consumers. The Government plans to renew and finish the tender in 2025.
Green energy for production of artillery
Rheinmetall, EPSO-G Invest, and the Giraitės Ginkluotės Gamykla have signed a Memorandum of Understanding on the use of green energy in the artillery ammunition factory in Lithuania. The plant is expected to be operational in two years' time and will be able to produce tens of thousands of 155 mm caliber artillery rounds every year. The parties to the memorandum commit to using green electricity, biogas (if necessary), and energy storage solutions to ensure reliable and efficient operations of the factory.
Possibility for consumers to return to public electricity supply
A proposal has been registered in the Lithuania's Parliament to allow all household consumers to switch back to public electricity supply, which is provided by the state-owned electricity supplier Ignitis. If adopted, the amendments would give consumers the right to choose between a public supplier and an independent one, thus promoting competition in the market. Ignitis currently supplies electricity to those who have not opted for an independent supplier and are in the third phase of market liberalisation.
Support to install high-capacity BESS
On 7 February 2025, the Environmental Project Management Agency announced available support to companies to install high-capacity battery energy storage systems (BESS), which will provide balancing services to the transmission system operator in the future. The measure, initiated by the Ministry of Energy, includes a EUR 102 million call for legal entities. The aim of this measure is to have at least 800 MWh of the BESS capacity installed by the end of 2028, directly connected to the grid of the transmission system operator or to power plants that are connected to the grid of the transmission system operator. Projects will be selected through a competitive process, with the maximum aid intensity reaching up to 30% of the relevant investment costs.
Baltics
Baltic States Successfully Synchronise with Continental
Europe's Power Grid
On February 9 at 14:05, Estonia, Latvia, and Lithuania officially synchronised their electricity systems with the Continental European power grid, marking a historic shift away from dependence on Russia. The transition was completed by activating the LitPol Link between Lithuania and Poland in alternating current mode, ensuring frequency stability in coordination with over 400 million consumers across 26 European countries.
This milestone significantly strengthens energy security in the region, eliminating the risk of unexpected disconnections by Russia. Years of technical preparations, supported by €1.23 billion in EU funding, enabled the early completion of the project – ten months ahead of schedule. Further grid enhancements, including the 700 MW Harmony Link interconnector between Lithuania and Poland, are planned by 2030 to further integrate the Baltic region into the European electricity market.
In addition to the synchronisation, Estonia, Latvia, Lithuania, and Poland signed a joint declaration to enhance critical energy infrastructure protection, emphasising regional cooperation in safeguarding energy independence.
Funding for energy innovation
The European Commission has allocated funding for cross-border energy infrastructure projects under the Connecting Europe Facility program. The North-Baltic Hydrogen Corridor received a €6.8 million grant for feasibility studies, while the CCS Baltic Consortium received more than €3 million for the development of carbon capture and storage infrastructure. The hydrogen corridor will connect Finland, Estonia, Latvia, Lithuania, Poland, Germany, and Finland to promote the use of renewable hydrogen and reduce CO2 emissions. These investments will contribute to the integration of EU energy markets and achieving net-zero targets.
Originally Published 28 March 2025
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