The agreement will see the Baltic state transfer renewable energy, deemed surplus to requirement in meeting its 2020 renewable energy target of 23%, to Luxembourg. It marks the first such cooperation mechanism used by EU member states.
Lithuania reached its 23% target in 2015, when renewables provided 25.8% of its power, and its energy ministry believes it will reach 30% by 2020.
Luxembourg’s 2015 renewable share, meanwhile, stood at 5% — less than half of its 2020 goal of 11% — so the administrative transfer, which will take place between 2018 and 2020, will take it closer to achieving its binding target.
In return, the Luxembourg will pay more than €10 million to Lithuania to be allocated for new renewable projects and scientific research into renewable energy sources in Lithuania.
Neither country specified the exact amount of power to be transferred.
Renewable Energy Directive
The EU has a goal of sourcing 20% of its energy needs from renewable sources by 2020.
Under the Renewable Energy Directive (Directive 2009/28/EC), each member state also sets its own individual target — Lithuania of 23% by 2020 and Luxembourg of 11%.
The directive also created the possibility of setting up mechanisms whereby countries can transfer energy between one another to help meet their targets.
Lithuania and Luxembourg signed a Memorandum of Understanding (MoU) for a cooperation mechanism in 2011.
Under this framework, only now finally formalised, the Baltic state is likely to contribute wind and solar power, geothermal energy and biomass to the Grand Duchy.
Lithuania’s minister for energy, Žygimantas Vaiciunas described the agreement as one of "historical importance for the whole of the EU".
He added: "We are showing another example of how we can jointly pursue the common objectives of renewable energy in the EU.
"Today, a theoretical opportunity has successfully become a practical bilateral instrument.
Meanwhile, Étienne Schneider, Luxembourg’s deputy prime minister and minister of the economy, said he believed the agreement put his country on the right track to reach its 2020 target.
"We are the first to show that real cooperation in the field of renewable energies is possible and benefits both the partners in the agreement and the objective pursued at European level. "
WindEurope CEO Giles Dickson congratulated the countries on a "ground-breaking deal".
"It shows EU member states are working together to deliver renewable energy targets while making the best use of Europe’s renewable energy potential.
"If one country has more natural potential than another and the other country needs to be contributing to a renewables target, then it makes sense for them to collaborate. This helps ensure a cost-effective energy transition," Dickson said.
Since the signing of the Lithuania and Luxembourg agreement, Estonia has announced it will sign a similar deal with the Grand Duchy.
The Baltic nation will sign the plan on 7 November in its capital city Tallinn.
Estonia has 332.4MW of wind capacity installed, according to Windpower Intelligence, the research and data division of Windpower Monthly.
Renewables are due to make up about 30% of Estonia’s energy mix in 2020, according to the country’s wind energy association.