Ministry of Energy. of the Republic of Lithuania. Report on investments. in modernising electricity generation

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1 Ministry of Energy of the Republic of Lithuania Report on s in modernising electricity generation pursuant to article 10c(1) of directive 2003/87/EC January 2018

2 CONTENT 1 INTRODUCTION Investments implemented in electricity sector in List of participants List of s Evidence documents Compliance indicators for based on s CONCLUSIONS... 7 Annex... 8

3 3 1 INTRODUCTION The Report on s made in modernisation of electricity generation sector pursuant to article 10c (1) of Directive 2003/87/EC has been prepared in accordance to the provisions of the following legal acts and documents: Article 6.3. of the Communication from the Commission "Guidance document on the optional application of Article 10c of Directive 2003/87/EC"; Item 2.4 of the Order of the Minister of Environment and Minister of Energy No. D1-559/1-179 "On transitional free allocation of emission allowances for the electricity producers in ", 14 July 2011 (hereinafter - Joint Order); Application of the Republic of Lithuania for transitional free allocation of emission allowances under Article 10c of Directive 2003/87/EC, approved by the COMMISSION DECISION of concerning the application pursuant to Article 10c (5) of Directive 2003/87/EC of the European Parliament and of the Council to give transitional free allocation for the modernisation of electricity generation notified by Lithuania (hereinafter Application). The Report is based on individual reports and evidence documents submitted by the operators from electricity sector on s made in 2015, 2016 and 2017.

4 4 2 Investments implemented in electricity sector in List of participants During the reporting period, neither (out of 8) operator has reported on implementation of modernization s in installation of electricity sector. 2.2 List of s The rest of planned s in are shown in Table 1 below: Table 1: Investment schedule for Investment number LT Value EUR LTL EUR LTL EUR EUR EUR EUR EUR EUR EUR LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ LT-$ Invested amount in 2013 Postponed to 2015 Investments in 2014 Investments in 2015 Postponed to 2017 Postponed to 2017 Investments in 2016 Investments in 2017 Investments in 2018 Investment removed.. Investments in 2019 Investment in 2020 LT-$

5 5 2.3 Evidence documents According to item 2.4 of the Joint Order, all operators must submit their annual reports together with the Statement of an independent certified auditor or audit company on s made in improvement of infrastructure, on implementation of environment-friendly technologies that reduce GHG emissions and amount in energy sector to the Ministry of Energy. It should be noted that Statement of independent certified auditor about s made by Lietuvos energijos gamyba, AB in 2015 and 2016, has been added. 2.4 Compliance indicators Compliance indicators for the s set out in the National Plan are the following: - Comparison of the emission factor of the technology adopted by each installation due to s undertaken under Article 10c of Directive 2003/87/EC with the emission factor of the technology used before the retrofitting/ upgrading, t CO2/MWh; - Expected and implemented decrease in total greenhouse gases emissions generated by electricity production due to s undertaken under Article 10c (compared to business as usual scenario); - Expected and implemented efficiency gains in electricity generation process is expressed as the ratio of the electricity produced (in TJ) with the energy input from fuels (in TJ). Efficiency increase is measured as rated difference before and after the ; - Efficiency gains in electricity distribution networks shall be determined as a reduction of network losses. Compliance indicators achieved by the completely implemented s in modernisation of electricity sector are provided in Annex.

6 6 3 for based on s According to the provisions of the National plan, emission allowances allocated pursuant to Article 10c of the ETS Directive shall be transferred to an operator only after the eligible under the National Plan is undertaken. Pursuant to the Part C.2.1 of the Application, if the amount of undertaken by an operator is higher than the value of free emission allowances allocated under Article 10c of the ETS Directive, he/she receives the amount of allowances not higher than he/she was allocated in a given year according to the National Plan. The excess value of s in a given year may be used for compliance with the next years allocation. Table 2 below shows allocation for based on s implemented in Grey cells illustrate the possible allocation in later years after the s are undertaken by the rest of installations. Table 2: allocation for installations based on implemented s in 2017 Installation ID in the National Investment Plan TOTAL numbers: Noreikiskes boiler LT-001 house LT-002 Petrasiunai power plant LT072 LT069 LT-003 Power plant LT055 Kauno energija Kauno energija LT-004 Kaunas Power plant LT088 KTE LT-005 Lietuvos Power plant LT087 LT-006 Alytus boiler house LT086 Litesko LT-007 LT-008 LT-010 Installation name Druskininkai Pramones boiler house Marijampole boiler house Siauliai Southern boiler house Installation ID in the Union registry LT078 LT085 LT050 Operator ,247 0,228 0,207 0,182 0,154 0,122 0,072 0, Klaipėdos energija Lietuvos elektrinė Litesko Litesko Šiaulių energija TOTAL Actual transitional free allocation (plan) value in 2013 value in 2014 value in 2015 value in LT-011 Utena boiler house LT057 Utenos ŠT value in based on s (fact) and adjusted to ATF allocation (plan), EUA Total surplus / shortage of generated EUA LT-012 CHP No. 2 LT044 LT-013 CHP No.3 LT045 Vilniaus šilumos tinklai * Vilniaus šilumos tinklai * * March 29, 2017 the operator has changed, because the concession contract with UAB,,Vilniaus energija" has expired.

7 7 4 CONCLUSIONS Out of 37 s approved in the National Investment Plan, 16 are implemented. During the reporting period of has been canceled, 1 removed and 1 is ongoing. According to the allocation plan, total amount of EUAs is planned to be allocated in However, not all the installations were involved in the process until 2017 therefore the final allocation for 2017 amounts to EUAs (55% of planned in 2017). It should be noted that emission allowances, allocated to 2015 and 2016 was updated, acording to Lietuvos energijos gamyba, AB audit report on the made in 2015 and Report is corect and does not affect the allocation for 2015 and 2016, provided to Lietuvos energijos gamyba, AB. It should be noted that on March 29, 2017 the operator of instaliations (ID in the Union registry LT044 and LT045) has been changed, because the concession contract with UAB,,Vilniaus energija" has expired.

8 8 Annex Table 3: Compliance indicators of the finished s, 2015 Table 4: Compliance indicators of the finished s, 2014 Table 5: Compliance indicators of the finished s, 2013

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