In Lithuania, an auction for an offshore wind farm was declared unsuccessful because only one company submitted a bid. Developers likely expected larger subsidies. According to Timo Tatar, former deputy secretary for energy at the Ministry of Climate, the current market situation requires that countries make an effort to attract developers.
The Lithuanian Ministry of Energy announced on April 16 that the second auction for an offshore wind farm failed because it required at least two bidders.
Timo Tatar mentioned that the area in Lithuania had been thoroughly prepared.
“We can speculate that perhaps a barrier was that the Lithuanians set a limit on the support price ceiling at the auction, where bidders could not ask for a higher price cap than EUR 107 per megawatt-hour,” Tatar explained.
In other words, companies in Lithuania were not willing to establish a wind farm with such a small subsidy.
“The market situation is currently more favorable for wind farm developers,” said Tatar.
“Clearly, it is now a seller’s market, not like a couple of years ago for offshore wind, where suitable areas were rushed even without subsidies. Now, countries have to make efforts to attract bidders,” Tatar elaborated.
Estonia is set to host its first offshore wind farm auction in 2026, which will offer support for a production capacity of four terawatt-hours. Such a production volume in Estonia could be secured by a single entity, for example, Eesti Energia’s Liivi Wind Park.
“A single 1,000-megawatt offshore wind farm produces about 4 terawatt-hours of electricity annually. In Estonia, it is expected that at least two to four bidders with mature projects could definitely participate in this reverse auction at sea,” said Lauri Ulm, head of wind energy at Enefit Green.
The Ministry of Climate explained that the winner would still emerge from a competitive situation.
“Not just anyone can win; the offer must be against the one who asks the state for the smallest amount of support. The reverse auction needs to have many participants, and only through this can renewable energy production be increased at the lowest possible cost to the consumer,” explained Rein Vaks, head of the energy department at the Ministry of Climate.
Developers who do not win the auction must rely on the growth of the Estonian electricity market.
“In the future, we may have an economy based on electricity, which will require new electricity production facilities. Life does not end in 2030 or 2035; we will continue to need electricity. Time will show what schemes will be formed and what support or market security mechanisms will be needed for the future,” said Ulm. (ERR)
