Without much fanfare, Lithuania is fast becoming an attractive draw for data center development. The reasons are manifold, but most compelling is the combination of accelerated regulatory pathways, robust energy infrastructure, and favourable climate.

To understand how this transformation is unfolding from the energy provider’s perspective, Darius Maikštėnas, CEO of Ignitis, Lithuania’s largest energy supplier and a key infrastructure partner for the country’s growing data center sector, shares his insights on what makes the Baltic nation an increasingly compelling destination for data center investment.

The global context driving demand

Global demand for data centers is rising sharply, particularly with the accelerated uptake of AI. McKinsey predicts yearly demand to grow by 19-22 percent from 2023 to 2030, which would push annual gigawatt demand to 219, up from 171 today. Meanwhile, the business landscape is shifting as the US attempts to slow offshoring trends, using tariffs and incentives to bring investments back home.

“I think we’ll see that Europe will unavoidably follow the US path, because otherwise, there is a chance that we’ll cede much of our resources to other larger players, namely China, which might not be to our strategic advantage,” Maikštėnas says. “Therefore, we’ll see more and more reshoring and nearshoring activities happening across the EU.”

In this environment, Nordic and Baltic countries are becoming particularly attractive for data centers because they can provide strong connectivity – both data-wise and power-wise – alongside competitive cost levels.

An abundance of green energy

Lithuania’s most compelling advantage lies in its rapidly expanding renewable energy infrastructure. Currently, almost 80 percent of all power in the grid comes from renewables, and the pace of growth has been remarkable.

Over the past five years, the country has managed to add about 50 percent more generation capacity to the grid from renewable sources. Previously reliant on substantial imports, Lithuania is now almost self-sufficient in domestic generation.

The environmental credentials are equally impressive. Carbon intensity in the grid currently sits at 139 grams per kilowatt hour and is projected to shrink below 120 by 2028. By around 2030, or hopefully earlier, the entire grid will run on 100 percent renewables. This rapid rollout has been possible due to several factors, Maikštėnas explains:

“Lithuania’s TSO core network was built 30 years ago to support large-scale industrial production that was far less energy efficient than today’s standards, leaving the country with substantial overcapacity. Combined with lower population and industrial density compared to countries like the Netherlands, this has made fast permitting and abundant green connections relatively straightforward.”

Building flexibility into the system

As renewable penetration increases, grid flexibility becomes critical. Maikštėnas notes that while integrating 30-40 percent renewable energy into the grid is relatively easy, reaching 80-90 percent creates significant volatility challenges.

To address this, Ignitis is investing heavily in flexibility solutions. The company is expanding one of Europe’s largest hydro pump storage power plants, which will provide one gigawatt of hydro flexibility capable of running for ten hours, equivalent to ten gigawatt hours of capacity, by next year. Additionally, Lithuania expects to have between three and four gigawatt hours of large-scale batteries installed.

“If you calculate the ratio of renewable generation to flexibility in the system, it’ll be far beyond any country in Europe,” Maikštėnas says. “We will have quite a healthy environment in this respect.”

Land, infrastructure, and competitive pricing

The Baltics rank among the least populated regions in the EU, offering abundant land and existing infrastructure. Ignitis Group alone has several sites capable of providing almost immediately up to two to three gigawatts of capacity to connect electrolyzers or data centers in industrial areas. Many of these locations previously utilized gas-fired generation that has since been decommissioned, making the capacity readily available.

In terms of pricing, Lithuania sits between Finland and Poland on the spectrum. Poland remains the most expensive area due to its substantial coal-based generation, while Finland currently enjoys some of the best energy prices in Europe thanks to its renewable infrastructure and an additional nuclear unit, with prices on the power exchange in the forties and fifties.

“Our ambition is to match their success here,” Maikštėnas states. “We are an adjacent region, and we position ourselves as the new Nordics. It’s cooler compared to central Europe (and the people are very cool as well).”

Offshore wind development will be crucial to achieving Finnish-level pricing. When offshore wind comprises no more than 20 percent of the energy mix, it delivers balanced pricing across the system (similar to nuclear power) because offshore wind production time can reach 91 percent annually, compared to 50-55 percent for onshore wind.

The Baltics expect to launch their first offshore parks before 2035, which, combined with Lithuanian expectation achieving 100 percent renewable penetration by 2028, should bring pricing levels in line with Finnish benchmarks.

Integrating data centers with utility infrastructure

Following the Nordic model, Lithuania sees significant potential in coupling utilities with data centers – both physically and in terms of business models. Ignitis already orchestrates hundreds of generation and demand units in real time, and from November 2025, intraday trading was shifted from one-hour to 15-minute intervals as the company optimizes a vast array of intermittent and dispatchable units across the system to serve two million users.

“The implementation of a data center inside what I’d call our ‘orchestra’ appears like a natural choice for us,” Maikštėnas explains. “When it’s more or less vertically integrated, we can capture more value inside the energy system:

“its volatility creates huge price arbitrages on one hand, but on the other, computing models are changing, especially with the advent of AI, and some have very unexpected peaks which are very costly. The ability to balance both energy and computing peaks while keeping value within the system could prove to be a perfect combination for the future.”

Regulatory advantages of a nimble nation

Beyond technical capabilities, Lithuania’s regulatory environment offers distinct advantages. The country’s size enables rapid engagement with regulators and legislators to create swift changes, particularly for flexible units.

Maikštėnas points to existing examples: “Our hydro pump storage and batteries currently don’t pay anything for using the grid because we treat those units as elements of the grid, as they contribute to the balancing of the system.”

He envisions a similar approach for data centers: “I can conceive of a situation where large-scale computing installations, through having some degree of flexibility, will be able to contribute to the balancing of the entire power system. In this scenario they might not only get the advantage of free grid access; they can also get advantages from balancing in the system.”

This regulatory agility extends beyond energy policy. Lithuania’s new Investment Highway initiative shows the country’s commitment to removing bureaucratic barriers for large-scale projects. The framework accelerates the pre-construction phase for data center projects, slashing territorial planning and construction permitting procedures by nearly half – from 36 to roughly 19 months nationwide, and from 24 to just nine months in free economic zones.

Given this combination of green energy, flexible infrastructure, competitive pricing, and streamlined regulations, Maikštėnas sees a clear path forward for Lithuania as data center development shows signs of saturation in Norway and Finland currently represents the hottest market in the region.

“In five years, we will be the next Finland,” he predicts. “Lithuania and the Baltics will be the next Finland.”

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