1. October 11, 2007, Warshaw, Novotel WIND ENERGY – SURE WAY TO INCREASE ALLOTMENT OF RENEWABLES Wind energy business review and perspectives in Lithuania Alvydas Naujekas President of Lithuanian Wind Energy Association; CEO Veju Spektras, Ltd.

2. October 11, 2007, Warshaw, Novotel WIND ENERGY – SURE WAY TO INCREASE ALLOTMENT OF RENEWABLES Facts chronology; Lithuanian wind energy in EU context; Wind energy goals in Lithuania; Problems of wind energy project implementation; Ways of problems solving; Wind energy development perspectives.

3. October 11, 2007, Warshaw, Novotel WIND ENERGY – SURE WAY TO INCREASE ALLOTMENT OF RENEWABLES Facts chronology until 2002: Absence of wind energy development background: –no grid connection rules; –no feed-in tarif; –no (still no) legal basis for renewable energy; –bad conditions for Western producers and investors; Attempts to import second hand plants Attempts to create own technologiess

4. October 11, 2007, Warshaw, Novotel WIND ENERGY – SURE WAY TO INCREASE ALLOTMENT OF RENEWABLES Fact chronology At the beginning of 2002 State Control Commission for Prices and Energy approves feed-in tarif for electricity from wind energy plants – 6,37 EUR ct/kwh until 2010; In the middle of 2002 theres mass agiotage about issuance of advance technical conditions for grid connection; At the end of 2002 the wind research results made by REC according to UNDP programe was announced.

5. October 11, 2007, Warshaw, Novotel WIND ENERGY – SURE WAY TO INCREASE ALLOTMENT OF RENEWABLES Fact chronology In 2003 Lietuvos Energija and distribution companies receive lots of request to issue advance technical conditions for wind energy plants connection to the grid (power installed exceeds 800 MW); –LE and distributions companies are alarmed; –when coordination EU admission agreement the aim of 7% electricity production from renewable resources until 2010; –Ministry of Economy prepares the order of tender; –zone idea occurs; UAB Dalis gero begins construction of first new commercial 600 kW plant in summer 2003.

6. October 11, 2007, Warshaw, Novotel WIND ENERGY – SURE WAY TO INCREASE ALLOTMENT OF RENEWABLES Fact chronology UAB Dalis gero begins exploitation of first new commercial 600 kW plant in the beginning of 2004; LE announces tenders for Permission to develop electricity production in zones III, IV and I in spring 2004; New Law on detailed planning enters into force in summer 2004;

7. October 11, 2007, Warshaw, Novotel WIND ENERGY – SURE WAY TO INCREASE ALLOTMENT OF RENEWABLES Fact chronology In 2005 the Government extends the term of 6,37 EUR ct/kwh until 2020; LE tenders for production extension are continued; In autumn 2005 UAB Vėjų spektras receives permission for construction of 30 MW wind park and begins the road construction works;

8. October 11, 2007, Warshaw, Novotel WIND ENERGY – SURE WAY TO INCREASE ALLOTMENT OF RENEWABLES Fact chronology In 2006 LE tenders for production extension are finished for whole 200 MW in zones I-VI; The following plants, parks are built and functioning: –UAB Vėjų spektras - 18 MW; –UAB SNP – 1,2 MW; –UAB Kuprijus – 0,8 MW; In total 20 MW; Few small second hand 50-150 kW power plants are built in Telšiai, Jurbarkas, Skuodas regions;

9. October 11, 2007, Warshaw, Novotel WIND ENERGY – SURE WAY TO INCREASE ALLOTMENT OF RENEWABLES Fact chronology In 2007 the following plants, parks are built and functioning: –UAB Achemos hidrostotys – 16 MW; –UAB Vėjų spektras - 12 MW; –A. Karapetiano – 2 MW; total 30 MW;

10. October 11, 2007, Warshaw, Novotel WIND ENERGY – SURE WAY TO INCREASE ALLOTMENT OF RENEWABLES Fact chronology

11. October 11, 2007, Warshaw, Novotel WIND ENERGY – SURE WAY TO INCREASE ALLOTMENT OF RENEWABLES Wind energy electricity production 2006-2007

12. October 11, 2007, Warshaw, Novotel WIND ENERGY – SURE WAY TO INCREASE ALLOTMENT OF RENEWABLES Lithuanian wind energy in the context of EU EU White Paper for Energy future: Renewable energy resources (COM(97)599); EU Directive 2001/77/EC For promotion of energy production from renewable energy resources within domestic market; EU Energy policy 2007;

13. October 11, 2007, Warshaw, Novotel WIND ENERGY – SURE WAY TO INCREASE ALLOTMENT OF RENEWABLES Wind energy goals in Lithuania On current grid conditions is possible to produce up to 2,8 TWh/year (Gross consumption in Lithuania is 14 TWh/year); It is possible to install 1200 MW wind energy plants + offshore plants; However present development is very slow.

14. October 11, 2007, Warshaw, Novotel WIND ENERGY – SURE WAY TO INCREASE ALLOTMENT OF RENEWABLES Problems Since 2004 the investment costs into conditional MW are increasing rapidly: »WECs – from 0,7 to 1,2 mln. (2007) 85%; »Construction works – 100%; »Transportation – 50%; »Designing-planning – 250-300%; »Land – no forecast.

15. October 11, 2007, Warshaw, Novotel WIND ENERGY – SURE WAY TO INCREASE ALLOTMENT OF RENEWABLES Problems The official state energy strategy still fossil fuel and nuclear oriented, which have very negative consequences for development of renewables; Despite formal declarations, strategy for development of renewables not supported by any governmental institutions; High resistance from grid transmition utilities; Low investment return (due to low wind electricity purchase price the term for investment return is increasing, its not worth to invest); Due to strict environmental regulations and high price of land is not possible to develop wind farms on allocated areas; Too long and complicated planning regulations, lasting 18 – 20 months; Is very long-lasting time of wind turbines supply, due to extremely high needs; These conditions blocking financial flows for investment projects, increasing interest rates, complicating conditions for loans;

16. October 11, 2007, Warshaw, Novotel WIND ENERGY – SURE WAY TO INCREASE ALLOTMENT OF RENEWABLES Ideas for solving the problems To develop legal base for renewable energy: –Separate Law on Wind Energy; –or as a part of the Law on Renewable Energy; To set wind energy as a priority; To change current system of tendering for grid connection; To increase the feed-in tariff to 7,5 – 9,2 EUR ct/kWh; To cover entire country for development of wind energy (not only allocated sites near the Baltic Sea); To form a budget for compensation of prices for renewable energy instead of current budget of public interest; To simplify land use planning procedures;

17. October 11, 2007, Warshaw, Novotel WIND ENERGY – SURE WAY TO INCREASE ALLOTMENT OF RENEWABLES Lithuanian wind energy development perspectives

18. October 11, 2007, Warshaw, Novotel WIND ENERGY – SURE WAY TO INCREASE ALLOTMENT OF RENEWABLES THANK YOU FOR ATTENTION!