Lithuania

Lithuania

Subsidy-free wind farm wins first Lithuanian tender

A 75MW wind farm has secured priority access to the grid with a zero-subsidy bid in Lithuania's first renewable energy tender.

The auction precedes further technology-neutral rounds for 700GWh/year in May 2020, April 2021 and April 2022 (pic credit: David Holt/Flickr)
The auction precedes further technology-neutral rounds for 700GWh/year in May 2020, April 2021 and April 2022 (pic credit: David Holt/Flickr)

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75MW Akmene One Akmene One (75MW) OnshoreŠiauliai County, Lithuania, Europe Click to see full details is the first phase of a 400MW complex to be built near the city of Akmene in northern Lithuania.

It will receive priority grid access to supply 300GWh with no top-up support under a 12-year contract.

Windfarm Akmene One could sell electricity on the Nordpool electricity spot or through a bilateral agreement with another wholesale market participant during this 12-year period, an energy minister spokesman advised.

Special purpose development vehicle Windfarm Akmene One UAB beat seven other developers in the country’s first technology-neutral auction round.

Two other participants also offered to supply power without a premium on day-ahead market prices — which averaged €45.07/MWh in 2018, four other bids were made with offers ranging from €0.56-3.86/MWh, and an eighth that was deemed invalid.

Windfarm Akmene One UAB secured the 12-year contract ahead of the two other developers bidding for offtake agreements without a premium as its forecast annual electricity production was the highest, the regulator Vert explained.

Vert would not disclose the technology of the unsuccessful bids.

Aistis Radavicius, director of the Lithuanian Wind Power Association, said that while the tender highlighted the competitive nature and maturity of the country’s renewable energy sector, he did not necessarily believe the sero-subsidy bid would be replicated in future rounds.

“This auction took place after a long investment gap: the market is hungry, and existing available grid capacity is limited, so we can consider such an outcome as a result of the companies competing for network access, rather than a financial supplement,” he added.

“European experience shows that renewable energy projects - especially wind - are developed without subsidies through corporate power purchase agreements (PPAs) between large developers and large businesses that use large amounts of electricity in their operations.

“The continued success of subsidy-free projects will greatly depend on the availability of PPAs on the market.”

While Akmene One won the right to priority dispatch of its electricity, the unsuccessful projects can still be built provided they do not restrict the 75MW wind farm’s access to the grid, the regulator confirmed.

According to the project's website, the first phase will consist of fifteen 5MW wind turbines, with construction expected to start in mid-2020 ahead of commissioning in mid-2021.

The developer forecasts annual electricity production of 1.4TWh/year from the whole 400MW complex.

Its power contract will last for 12 years from the start of power generation.

WindEurope’s CEO Giles Dickson said: “The auction confirms that onshore wind is the cheapest form of new power generation in most of Europe, and that there are a wealth of investors who want to support it.”

Lithuania's auction to supply 300GWh/year was Lithuania’s first renewable energy tender round, and precedes further technology-neutral rounds for 700GWh/year in May 2020, April 2021 and April 2022.

Under Lithuania’s national energy strategy, passed in 2018, the country aims to have renewables provide 100% of its electricity by 2050.

This would create a demand for 18TWh of clean energy by mid-century, up from 2.1TWh in 2018, of which wind provided 1.1TWh.

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