Lithuania Shelves Second Offshore Wind Tender

Planning & Permitting

April 18, 2024, by Adnan Durakovic

Lithuania’s National Energy Regulatory Council (NERC) has discontinued the second tender for a 700 megawatt (MW) offshore wind farm in the Baltic Sea after receiving only one bid.

The Law on Renewable Energy stipulates that there must be at least two tenderers for a tender to take place, Lithuania’s Ministry of Energy said.

”As Lithuania strives for energy independence and pursues the Green Deal goals, offshore wind power is one of the key elements of decarbonisation. Therefore, the Ministry of Energy will update the tender conditions after consultations with market players and will relaunch the tender,” said Minister of Energy Dainius Kreivys, commenting on the tender for the development of the second offshore wind farm.

The tender conditions were enshrined in law as early as 2022, but the situation in the global offshore wind market has changed dramatically and investors face many obstacles: high interest rates, supply chains disrupted after the pandemic, high equipment costs, and reduced interest from banks and foundations in financing projects. This is also reflected in the failure of tenders in other countries and in the withdrawal of some developers with losses from previously planned projects, the Ministry said.

According to Minister 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.

The Minister of Energy believes that the geopolitical situation in the region may have also influenced the investors’ plans.

”The second 700 MW offshore wind farm is a project of strategic importance and absolutely necessary for Lithuania’s energy independence; therefore, after consultations with market players, the tender will be relaunched as soon as possible. During these consultations we need to find out what specific conditions would maximise the attractiveness of the project and increase its resilience to market fluctuations,” Minister Kreivys said.

Lithuania plans to have two offshore wind farms with a combined capacity of 1.4 GW.

”The planned two offshore wind farms will cover half of Lithuania’s current electricity consumption needs, which will allow the country to become self-sufficient in electricity from local sources and eliminate its dependence on electricity imports. These are the strategic goals of Lithuania, which determine its national security, people’s trust in the state, the price of energy resources for our residents and the international competitiveness of our exporting business,” Kreivys said.

Lithuania plans to source its electricity exclusively from local renewable energy sources by 2030. Renewable energy currently accounts for around 40 per cent of total system demand, mainly from solar and wind.