Key words: energy, energy strategy, European Union, liberalisation of energy markets, global energy market, energy efficiency.After the dissolution of the Soviet Union, Lithuania inherited a strong power industry, the capacity of which surpassed the internal needs of the country: power plants of a total capacity of 5.5 mln kW, oil refinery designed to process 10 mln tons of oil per year, and a developed gas distribution network. More than a half of the republic's population enjoyed the benefit of central heating.Furthermore, Lithuanian energy is connected with the common energy system of the Baltic States, Belarus, and Russia. It might be called the positive balance of the heritage.But the republic's energy system found itself in a state of a consumer who is not used to taking into account the energy costs, while the whole infrastructure was designed in view of cheap energy usage. Energy was supervised by state monopolies and managed by rather conservative, reform-shy administrators. The situation also deteriorated due to the lack of primary energy sources in Lithuania: with the exception of an insignificant amount of coal, all of them (oil, gas, nuclear fuel) were imported from a single country -Russia. The share of local renewable energy sources was approximately 3%.The political and economic leaders of the country faced very difficult problems in the field of energy. Ensuring stable power delivery to all consumers -manufacturing indsutry, transport, agriculture, and public utilitieswas on the top of agenda.At the same time, it was urgent not only to solve practical problems related to power supply but also to form an energy policy and strategy for the next 10-20 years. In the conditions of changes both in the country and abroad it was extremely difficult. The economic reform, the rupture of economic connections with former partners, and, above all, a deep economic crisis led to a sharp decrease in energy demand. So, the consumption of primary energy resources in the republic, which, in 1991, amounted to 17.5 mln tons of oil equivalent dropped to 8 mln tons (pic.1). The power ( fig. 2) and central heating ( fig. 3) consumption reduced quite as much.
