On 24 September 2026, amendments to the Law on Energy of the Republic of Lithuania, the Law on Electricity of the Republic of Lithuania and the Law on Renewables of the Republic of Lithuania were adopted and will enter into force on 1 November 2026.

The amendments provide greater flexibility for developers of electricity generation and energy storage projects, reduce the financial burden for certain projects, create opportunities for more efficient management of reserved grid capacity and enable developers to adapt to changing market conditions.

Below, we highlight the most important amendments and their practical implications for businesses.

  1. Extension of the validity of development permits up to 4 years

Developers holding valid permits for the development of electricity generation or energy storage facilities will be entitled to extend the validity of such permits once, for up to 48 months, without providing specific reasons or submitting additional supporting documents. The only requirement is to provide additional performance security (so-called “grid bond”) for the extension period, calculated by multiplying the permitted generating capacity (kW) or, in the case of the facility’s hybridisation, the installed capacity (kW) by EUR 6.25 per kW. The relevant applications shall be submitted no later than 30 September 2027.

Benefit: Developers are given more time to secure project financing while retaining their existing grid capacity reservations.

  1. Introduction of a technology change mechanism

Developers will be entitled, upon application, to enter into a one-time agreement for the implementation of another equivalent electricity generation, energy storage or consumption (demand) project. In such a case, the rights and obligations of the parties under the existing Letter of Intent in respect of the original project will cease to exist, and the developer will be granted up to 48 months to either: (i) enter into a new Letter of Intent with the transmission system operator (TSO); or (ii) demonstrate that the consumption (demand) project has been connected to the distribution network. Where an existing project is replaced by another electricity generation or energy storage project, the permitted generating capacity of the new project must be identical to that of the replaced project. Where an electricity generation or energy storage project is replaced by a consumption (demand) project, the conversion ratio requires that 1 MW of permitted generating capacity of the electricity generation or energy storage facility corresponds to 0.3 MW of the permitted operating capacity of the consumption facility. This right may likewise be exercised until 30 September 2027.

Benefit: Developers gain greater flexibility to respond to market developments and technological progress. For example, a solar or wind project may be converted into an energy storage project or even into a large-scale electricity consumption project. This is particularly relevant given the rapidly increasing demand for data centres, electrification and energy storage projects.

  1. Reduction of the performance security requirements

The performance security (grid bond) required by network operators will be reduced from EUR 50 per kW to EUR 25 per kW for both electricity generation and energy storage projects. In addition, performance securities submitted before 31 October 2026 will be recalculated in accordance with the new regulation, and any excess portion must be returned.

Benefit: This significantly improves project liquidity, reduces financing costs and allows capital to be allocated more efficiently to other investments or portfolio expansion.

  1. More flexible procedure for issuing generation permits

Electricity generation permits, and permits for energy generation from energy storage facilities, may be issued even where certain commissioning tests cannot be completed due to weather or other natural conditions, provided that the network operator confirms that this does not adversely affect the safety, stability, or reliability of the network. Any deferred tests must be completed within six months from the issuance of the generation permit.

Benefit: Projects can commence commercial operations and generate revenue sooner, while reducing risks associated with compliance with project financing conditions.

  1. Tolerance for changes in installed or permitted generating capacity

A tolerance threshold of 5% will be introduced for deviations in permitted generating capacity or installed capacity (in the case of a hybrid power plant) occurring upon completion of electricity generation or energy storage projects, provided that such deviations result from objective factors related to the technical specifications of the selected equipment. In such cases, a generation permit will still be issued, and the relevant network operator will return the full performance security amount.

Benefit: This reduces regulatory risk and administrative burden when the equipment’s final parameters differ slightly from those specified in the Letter of Intent. The change is particularly relevant for projects where procurement or financing processes are ongoing, and the final equipment selection is confirmed only at a later stage.

  1. Expansion scope direct line agreements

The definition of a direct line is expanded to include energy storage facilities. This creates opportunities for direct lines to connect electricity generation facilities, energy storage facilities, and consumption (demand) facilities.

Benefit: New opportunities emerge for the development of private energy infrastructure solutions for large energy consumers, reducing network usage costs, improving utilisation of generation and storage assets, and supporting projects involving data centres, industrial facilities, green fuel and hydrogen projects.

  1. Improved methodology for calculating performance security for hybrid power plants

Special rules have been introduced to calculate performance security requirements for hybrid power plants. For a new hybrid power plant, the amount of the performance security will be linked to the permitted generating capacity. Where an energy storage facility or an additional electricity generation facility is added to an existing electricity generation facility, the performance security will be calculated based on the installed capacity of the additional facility. In both cases, the new rate of EUR 25 per kW applies. Where part of a hybrid power plant has already been constructed, and an extension of the development permit is required for the remaining part, the performance security will be calculated solely based on the installed capacity of the part that has not yet been constructed. In addition, the network operator may use only the portion of the performance security corresponding to the specific undeveloped electricity generation or energy storage facility, rather than the entire hybrid power plant.

Example: A developer plans a 100 MW solar power plant and a 50 MW energy storage facility (BESS) but ultimately completes only the solar project and obtains the generation permit for it. If the developer subsequently extends the implementation period for the 50 MW BESS, the additional performance security will be calculated solely with reference to the 50 MW BESS, not to the total 150 MW hybrid project.

Benefit: The amendments reduce the financial burden of developing hybrid projects, particularly when energy storage facilities are added to existing solar or wind farms. The new regulation encourages phased project development and facilitates more efficient expansion of existing infrastructure without incurring disproportionate guarantee costs.

 

What does this mean for project developers?

Some of the amendments provide greater flexibility in project development, enabling developers to retain existing grid capacity reservations and adapt to evolving market requirements. Others significantly reduce guarantee and financing costs, creating more favourable conditions for project development and investment.

However, the practical application of the new rules, particularly in relation to project technology changes, permit extensions and project portfolio restructuring, may give rise to legal and regulatory considerations that should be assessed in advance.

If you are considering making use of the new opportunities relating to permit extensions, project technology changes, hybrid power plants or direct line agreements, it is advisable to assess in advance their impact on project structuring, financing documentation and relationships with network operators.