The article outlines renewable energy (RE) sources according to the energy efficiency policy in Lithuania as well as practical experience of implementation of RE projects within the framework of the government policy to promote RES use due to the requirement of the European Union. The main goal of the country is to reduce the import of fossil fuel, to improve environment conditions and to reduce the climate change impact. Analysis of implemented RE projects and forecasts for the future projects are also presented. Most of the efforts in Lithuania were aimed at drafting the biomass (wood chips, wood waste, straw, biogas) and small hydro projects and their subsequent implementation. At present the total capacity of wood-chip-fuelled boilers reached above 251 MW. No serious obstacles can be seen for the extension of wood fuel use. At present, new demonstrational projects have been started covering geothermal energy, solar energy, biogas, biofuels for transport and other. In this time, the RE sources comprise 7.69% of national energy balance. Taking into account feasible resources of RE (it is more than 19.85TWh/year) and the ongoing implementation of projects it is clear that the share of RE sources will constitute 12-13% of national energy balance in 2010 year. The main factor limiting further growth is high investment costs. The electricity production from local and RE sources in Lithuania is mainly based on hydro energy. At this time the wind energy is not used for this purpose. The electricity production from local and renewable energy sources is about 3.22% of the total consumption. (c) 2004 Elsevier Ltd. All rights reserved.