Lithuania puts offshore wind tender on hold amid lack of demand, geopolitical tensions
Energy minister promises update to tender conditions for second 700MW round and stresses importance of wind at sea for national security
Lithuania's energy regulator has put the Baltic country’s second 700MW offshore wind tender on hold after the government received only one bid in the contract for difference (CfD) auction.
For the tender to go through, at least two bids are required according to Lithuania’s renewable resources law.
Lithuania’s energy minister Dainius Kreivys stressed that offshore wind remains one his country’s most important elements of decarbonisation.
“Therefore, after consultations with market participants, the Ministry of Energy will update the conditions of the tender and prepare it anew,” he said.
The government blamed dramatic changes in the global offshore wind market for the lack of interest, among them high interest rates, disrupted supply chains after the pandemic, more expensive equipment, and decreased interest of banks and funds in financing projects.
The failure of tenders in other countries and the withdrawal of some developers from potentially loss-making projects in other geographies gave evidence to this, Lithuania said.
The geopolitical situation in the region could also have influenced the investors' plans, according to Kreivys.
Lithuania has a border with the Russian exclave of Kaliningrad at the Baltic Sea, and with Belarus, a close ally of the Kremlin regime.
“The second 700MW offshore wind park is a project of strategic importance and absolutely necessary to ensure Lithuania's energy self-sufficiency, therefore, after consultations with market participants, the tender will be announced again, and as soon as possible,” Kreivys assured.
“During consultations with market participants, we need to find out what specific conditions would maximise the attractiveness of the project and increase resistance to market fluctuations.”
Lithuanian developer Ignitis according to media reports had handed in the only bid in the second offshore wind auction. The company together with the EDPR-Engie tie-up Ocean Winds had won the first 700MW auction for wind at sea in the country.
Lithuania by 2030 targets to source 100% of its electricity from renewables – up from 40% now – with offshore wind being regarded as key for national security.
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