According to a press release from Lithuania’s Ministry of Energy, the decision to push back opening the auction came after a consultation held on Tuesday, 10 October, and feedback from investors on the global renewable energy sector being affected by the current economic conditions, which in turn affects their plans.
“Due to changes in economic circumstances, the situation in the renewable energy sector worldwide is changing dynamically and this is influencing investors’ plans,” said Daiva Garbaliauskaitė, Deputy Minister of Energy. “During the consultation year, our aim is not only to provide them with all the information they need about the planned auction, but also to secure feedback from investors, which will help us to organise a competitive auction on the most attractive terms.”
The Lithuanian Ministry of Energy brought forward an amendment package to the Laws on Renewable Energy and Electricity which facilitates the country’s second 700 MW tender and accelerated tendering procedures in July 2022, with the second offshore wind farm expected to produce its first power as early as 2028.
A few days ago, the Ministry of Energy said the European Commission (EC) had approved a EUR 193 million support scheme under which the second offshore wind project, to be selected through a competitive bidding process, would be supported.
During the consultation that the ministry held on 10 October, which led to delaying the tender launch, market participants were also informed about the support scheme now approved by the European Commission, along with discussing the preparations for the auction and its terms and conditions.
The support scheme will take the form of a variable premium under a two-way contract for difference (CfD) that would be in effect for 15 years. The premium will be calculated by comparing a reference price, determined in the tender offer, as well as by the market price for electricity.
The CfD will see the owner/developer of Lithuania’s second offshore wind farm is entitled to receive aid equal to the difference between the strike price and the market prices for electricity as soon as the market price is below the strike price. However, the owner will have to pay the difference between the two prices to the State as soon as the market price is above the strike price.
