Business development and innovations' projects

Ignitis Gamyba has started preparations for 1-megawatt energy storage system installation in Kaunas Algirdas Brazauskas’ HPP. Operating in synergy with the plant, the new storage system would become the first and the biggest innovation of this kind in the Baltic States.

Using a unique algorithm, the storage system would allow providing a high-quality frequency containment reserve (FCR) service, compensating the asymmetries in hydro-unit operations. Moreover, a successful synergy of the hydro-unit and energy storage system could become an important source of the primary reserve. These (ancillary) services will be crucial for Lithuania after 2025 when it will join the continental European network and leave the BRELL ring. As for today, FCR services in the Baltics are mainly provided by the Russian power plants, operating in the post-soviet BRELL energy ring.

Due to the growing demand for autonomous FCR services in the Baltics, the innovative energy storage system later may be adopted for the much larger hydro-units in the Kruonis pumped storage plant.

Completed works

The company plans to announce a tender procedure for the procurement of the energy storage system equipment at the start of 2019.
The storage system is expected to be completed in 2020.

Benefits

Successful implementation of the energy storage and hydro unit synergy project would:

• Secure independent provision of ancillary services within Lithuania;
• Expand the possibilities of the existing infrastructure;
• Improve the management of the imbalances in hydro unit operations – this advantage could later be used in other energy infrastructure objects, creating favourable conditions for further RES development.

In order to promote the development of renewable energy generation, Ignitis Gamyba has evaluated the possibility of installing a wind farm in the territory of Kruonis PSHP and carried out preparatory works. The next stage of the project will be outlined after the negotiations with other involved institutions.

In order to maintain reliable local generation capabilities, Ignitis Gamyba is assessing possibilities to expand the capacity of the Kruonis Pumped Storage Hydroelectric Power Plant (PSHP) by constructing the fifth variable speed 225 MW hydropower unit. Currently, four hydropower units are installed in Kruonis PSHP but the initial PSHP's project provides for the possibility to build additional four units. Therefore, the current infrastructure of Kruonis PSHP is fully adapted to the new hydropower unit.

It is estimated that the fifth hydropower unit of Kruonis PSHP would be more efficient and flexible than the old ones. According to the current estimations, the hydropower unit would be able to operate at the capacity of 160–225 MW in pump mode and 90–225 MW in the generator mode. The unit’s cycle efficiency ratio would reach up to 80%, i.e. 6 percentage points more than that of the existing units.

Advantages

Under the current market conditions, the existing 900 MW capacity of the Kruonis PSHP is fully sufficient, however, its further development is needed to ensure Lithuania's energy independence and competitiveness by maintaining sufficient and reliable local power generation capacities. A new, more efficient unit would allow the company to address power imbalances in a more flexible way and in real-time.

The expansion of the Kruonis PSHP unit is being analyzed considering the following estimated future market trends:

• Development of renewable energy sources (RES) in the region. The new Kruonis PSHP unit would provide an opportunity to solve one of the main global challenges posed by RES development – to integrate and adjust the imbalances created by wind and solar intermittent generation in real-time. With an increasing share of RES in the power generation, the demand for this service will grow further.
• NordBalt, LitPol Link and Harmony Link connections. The price difference in the markets of neighboring countries at certain periods will allow Kruonis PSHP to use its capacities to trade electricity, i.e. to sell the cheaper night-time electricity at peak day-time prices.
• Synchronization with the continental Europe. Together with the integration to UCTE, Lithuanian will have to take more responsibilities for the grid management and balancing. The flexible unit of Kruonis PSHP could serve as a tool for provision of needed ancillary services.

Investments

The planned investments into the construction of a new hydropower unit in Kruonis PSHP amounts to EUR 100–115 million or EUR 0.52 million per installed megawatt. Compared to the foreign practice, planned investments in new hydroelectric power plants amount to EUR 1.1 million per megawatt, i.e. more than twice as high.

Starting from 2013, the project is included in the list of Projects of Common Interest of the European Union (EU), together with other energy infrastructure projects of regional importance thus obtaining possibilities to acquire EU financial support from the Connecting Europe Facility (CEF) Fund.

In order to accelerate the implementation of the project, the Company applied for CEF financing for several feasibility studies:
Project No. 4.7-0016-LT-S-M-17 – “Evaluation of technical condition of the infrastructure and penstock site for the Kruonis PSPP Expansion”.
Project No. 4.7-0005-LT-S-M-19 - "Evaluation of different technological solutions for the extension of Kruonis HPSPP and socioeconomic analysis".

Completed works

About 75% of all the needed construction work has been carried out when upgrading the existing infrastructure of Kruonis PSHP and building the first four hydropower units.

A large part of the preparatory works for the Kruonis PSHP development project has also been completed, such as the feasibility study, environmental assessment, and technical specifications. The estimated duration of the project's implementation would be at least four years.

In January 2018, the European Commission approved a partial funding for studies of the pole field and infrastructure (Project No. 4.7-0016-LT-S-M-17). The study is aimed at assessing whether the current state of the pole field on which the new penstock is to be constructed meets all technical requirements. This study is a step further in order to fully prepare for the possible implementation of the extension project of the power plant. The research was completed on IIIrd Quarter 2019.

In November 2019, the European Commission also approved the partial funding for the implementation of the technological feasibility study and the socioeconomic analysis of the fifth unit of Kruonis PSHP (Project No. 4.7-0005-LT-S-M-19). It aims to determine the best technological solution to be installed in Kruonis power plant as well as to determine the socioeconomic value generated by such installation. It is estimated that the feasibility study will be completed in full scope in March 2020.

In the National Energy Independence Strategy approved by the Parliament of the Republic of Lithuania on 21 June 2018, the development of Kruonis PSHP was included in the list of tasks of major importance in the electricity sector.


Project is co-financed by the Connecting Europe Facility of the European Union

The project is implemented by: AB Ignitis Gamyba
Project sponsor: UAB Ignitis Group 
Funding sources: loans from commercial banks, EU Structural Funds, export credit agencies, AB Ignitis Gamyba own funds, release of green bonds
Technical Indicators: additional 225 MW in the existing 900 MW power plant, expanding its capacity to 1125 MW
Technology: flexible variable speed hydropower unit
Capacity in the pump mode: 160–225 MW
Capacity in the generator mode: 90–225 MW
Cycle efficiency ratio: up to 80 percent

For further inquiries: gamyba@ignitis.lt

Kruonis Industrial Park project has been under development since 2010. The industrial park is to based in the territory of Kruonis PSHP owned by Ignitis Gamyba. The aim of the project is to attract a foreign investor developing large regional data centres and providing high-tech services.

The territory of Kruonis PSHP is ideal for data centre operations due to its existing infrastructure: high reliability systems of communications, power supply and logistics as well as the nearby Kaunas Reservoir whose water can be used for the cooling processes of the data centres. The park is located in a free economic zone and therefore offers tax benefits. Moreover, the geographically convenient location allows reaching the largest Lithuanian cities and airports in less than an hour.

The 20 October 2010 Decree No. 1495 of the Government of the Republic of Lithuania recognised this project as a project of national economic importance, and the 21 December 2011 Decree No. 1515 assigned a part of the Kruonis PSHP territory to the area of Kaunas FEZ.

Since Kruonis PSHP is an object of strategic importance, it follows high security standards – this is also relevant for data centre developers. In Kruonis industrial park, the electricity price is up to 40% lower if compared to the rest of Lithuania, moreover, it is possible to connect to high-voltage networks in line with the highest requirements for the security of electricity supply.

Completed works

In order to increase the attractiveness of the territory for potential investors, in 2013–2014 the necessary engineering infrastructure was developed, including logistics, communications, water supply, and sewerage systems.

In order to reduce the administrative burden for setting-up business, in 2016 the procedures for changing the detailed site plan of the territory and assessing the environmental impact of the economic activities were initiated. In 2017, positive conclusions were received and a detailed site plan prepared, determining the building height limits, build-up intensity and other requirements in line with the needs of data centres.

In 2018, Ignitis Gamyba together with Kaunas University of Technology launched a pilot floating solar power plant project in Kruonis PSHP. Aimed at scientific research and developing innovations, the project will be the first of its kind in the region, further increasing the attractiveness of the Kruonis Industrial Park for potential investors.

Advantages

Successful implementation of the Kruonis PSHP industrial park project would:

• Increase foreign direct investment in Lithuania and the country's attractiveness to potential foreign investors;
• Create jobs of high added value;
• Strengthen the image of Lithuania as a regional leader in IT (especially in the areas of high-speed internet, digital data transfer);
• Improve the regional infrastructure and increase the population in nearby cities.

Investments

In 2013–2014, the project for the installation of the engineering infrastructure in the territory of Kruonis PSHP was implemented using the EU structural funds for the period of 2007–2013, under the Invest LT instrument of Priority 2 of the Action Programme for Economic Growth ‘Increasing Business Productivity and Improving Business Environment’, VP2-2.4-ŪM-01-V.

In total, more than EUR 2 million have been invested in the territory of Kruonis Industrial Park in the period of 2011-2018. Most of these investments were funded by the EU.

Today, around 400 PSHPs globally do not make any additional use of their water reservoirs. Looking for ways to develop its owned infrastructure Ignitis Gamyba, together with Kaunas University of Technology (KTU) started implementing a pilot floating solar power plant project in Kruonis PSHP. Aimed at scientific research and developing innovations, this project would be the first of its kind in the region.

During the primary stage of the project, Ignitis Gamyba and KTU plan to install an experimental (60 kW) solar power plant in the upper-reservoir of the Kruonis PSHP and develop an algorithm for managing the power plant and energy storage system. The algorithm will take into account constantly registered network and other physical parameters of the Kruonis PSHP. The structure resistant to ice and waves will also be designed to adjust to water-level variations.

Having evaluated the results of the pilot project, the company will assess the idea of covering the whole 300 ha upper-reservoir of Kruonis PSHP with floating solar power units. The full-size power plant could reach approx. 200-250 MW - twice as much as the current capacity of the Kaunas Algirdas Brazauskas’ hydropower plant, generating enough electricity to supply more than 120k households yearly.

Completed works

In February 2019, the experimental floating photovoltaic solar power plant project in Kruonis PSHP received funding from the Lithuanian Business Support Agency (LBSA). The total amount of 235k EUR have been granted. LBSA together with the Ministry of the Economy and Innovation have decided to fund the project after considering 139 applications, 91 of which received grants. The floating solar power plant project has been rated among the best applications.

The primary stage of the project is scheduled to be completed by the end of 2021.

Successful completion of the both stages of the project would:

• Improve the existing infrastructure; 
• Create favorable opportunities for providing reliable primary reserve service;
• Increase the attractiveness of Kruonis Industrial Park to foreign investors; 
• Allow to supply about 120k households annually;
• Strengthen the image of Lithuania as an international leader in energy innovations.