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Published: 20 april 2012 10:10

Lithuanian businesses rush to invest in heat production

Irmanto Gelūno / 15min nuotr. / Katilinė

An increasing number of both large and smaller-sized businesses in Lithuania are looking to invest in the independent heating production, a new business field that the government and energy price regulators are paving the way for, before competition in the sector heats up, the business daily Verslo Žinios reports.

The bulk of energy for district heating in the country's cities and towns is still being supplied by power plants that are burning expensive gas. There are only 19 so-called independent heating producers. However, this spring, the National Control Commission for Prices and Energy is expected to approve a heat energy purchase procedure that will be favorable for independent suppliers and to revise its heating price setting methodology, which should lead to a considerable rise in the number of such suppliers, it wrote.

"Exceptionally favorable conditions are being created for investors to set up low-capacity biofuel-fired heat production boiler stations and supply heating to urban district heating systems that use natural gas as the key fuel. This has created quite a stir among investors," Valdas Lukoševicius, president of the Lithuanian Energy Consultants Association, said.

Kaunas' local authorities alone have received requests from independent producers for new boiler stations with a combined capacity of around 230 megawatts (MW) to be hooked up to the centralized heating grid. By comparison, the city's winter heating needs usually amount to between 200 and 300 MW. The planned heating production capacity in the nearby town of Jonava already exceeds the maximum demand.

The Senukai Group wants to build 20 MW biofuel-fired boiler stations in Vilnius and Kaunas, the E Energija Group, ENG and a number of other companies also have plans to invest in heating production. The state-owned electricity production group Lietuvos Energija (Lithuanian Energy) is looking to enter the independent heating supply market as well, with plans to build bio-fuel fired plants jointly with its partners.

A number of industrial companies, including Grigiškes, Vilniaus Paukštynas, Matuizų Plytinė and others, have also joined the ranks of independent heating producers.

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