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Lithuania’s latest wind auction fails to find enough bidders
24/4/2024
The Lithuanian Energy Ministry recently cancelled the country’s second offshore wind auction after only one bid was tendered. Now, the government plans to carry out a market consultation and subsequent update of auction conditions, after which the auction will be relaunched. On a more positive note, the first turbine at the 63 MW first phase of the Jurbarkas wind farm onshore Lithuania has been successfully installed.
According to the Lithuanian National Energy Regulatory Council (NERC), the tender, for a 700 MW offshore wind farm in the Baltic Sea, did not take place as the country’s Law on Renewable Energy stipulates a minimum of two bids. Only state-owned utility Ignitis took part.
The lacklustre response to the auction is thought to reflect changes in the global offshore wind market over the past year or so, with investors facing obstacles such as high interest rates, supply chain disruption after the pandemic, high equipment costs and reduced interest from banks and foundations in financing projects. Auctions in other countries, including the UK, have also performed poorly in recently months, with some developers also withdrawing from planned projects.
According to Minister of Energy Dainius Kreivys, ‘The change in the investment attractiveness of offshore wind projects is also illustrated by the different conditions of the tenders announced in Lithuania: according to the conditions of the second tender, the developers had to compete for the amount of possible state support, while the first tender was won by the investor offering the highest price.’
Kreivys said he also believed that the ‘geopolitical situation in the region may have influenced investors’ plans’.
Stating that the second 700 MW offshore wind farm was ‘a project of strategic importance and absolutely necessary for Lithuania’s energy independence’, Kreivys said there would be consultations with market players in order ‘to find out what specific conditions would maximise the attractiveness of the project and increase its resilience to market fluctuations’, with a view to the tender being relaunched as soon as possible.
Lithuania’s first 700 MW offshore wind auction was held in 2023. According to a report in The Maritime Executive, it also failed to attract much interest, as there were no subsidies or power take-off guarantees, making it uncompetitive compared to arrangements in other markets. Only two bids were received; the winner a joint venture between Ignitis and Ocean Winds.
Lithuania plans to have two offshore wind farms with a combined capacity of 1.4 GW, meeting half of country’s current electricity consumption needs and allowing it reduce dependence on electricity imports.
The Lithuanian government plans for the country to source electricity exclusively from local renewable energy sources by 2030. Renewable energy currently accounts for around 40% of total system demand, mainly from solar and wind.
First turbine goes up at Lithuanian wind farm
In more positive news, Green Genius has installed the first wind turbine at the onshore Jurbarkas wind farm in Lithuania. A total of 11 turbines, provided by Nordex Group, are to be installed in the first 63 MW phase of development, which is due to start operation in 2025.
Once completed, the 80 MW Jurbarkas wind project will account for about 8% of Lithuania’s wind portfolio, saving more than 130,000 t/y of CO2, according to Green Genius.
