Lithuania and the Baltic Sea region turn to offshore wind energy

​published on 4th December 2020

One of Lithuania's strategic goals is to increase local power generation and reduce dependence on imports, promote renewable energy, and achieve this most efficiently. It is the offshore wind that makes it possible to achieve these goals through open and transparent tendering.

Very favorable prospects are predicted for this energy source and Lithuania has excellent opportunities to develop it. The Parliament (Seimas) of the Republic of Lithuania has approved and is examining the draft amendments to the laws prepared by the Ministry of Energy, based on which the conditions for the development of wind energy in the Baltic Sea could be created. The first offshore wind auction is expected to take place as early as 2023.

The Act proposes to establish a support model for offshore wind energy and the principles for its determination. As in other EU countries, it is proposed to finance the development of wind energy using the contract for the different models of electricity from renewable energy sources. The project creates transparent and equal tendering conditions for all market participants.

By the practice of the countries with the most experience in offshore wind energy - the Netherlands, Denmark, Germany - it is envisaged that the responsibility for the installation of transmission grids connecting the offshore power plants will be transferred to the electricity transmission system operator.

The 700 MW wind farm in the Baltic Sea will cover up to 25 percent of Lithuania's annual electricity demand, thus reducing the need for electricity imports.

The Lithuanian Energy Agency has already started the necessary preparatory work - preparation of a special plan, strategic impact assessment, wind measurement, soil research, and environmental impact assessment. All these preparatory works will be completed by the auction date foreseen in the draft law.

The development of offshore wind energy will be planned through the implementation of the renewable energy targets set in the National Energy Independence Strategy and the National Energy and Climate Action Plan. Offshore wind energy will not only help to achieve these goals of increasing electricity generation from the share of renewable energy but also contribute to effectively achieve these goals due to the specific characteristics of offshore wind energy. Once the Seimas approve these projects, the regulatory environment will also need to be agreed with the European Commission on compliance with state aid requirements.

Lithuania's energy strategy is in line with common European and regional objectives. A Memorandum of Understanding on cooperation in the development of offshore wind energy in the Baltic Sea was signed in Szczecin, Poland on 30 September 2020. The declaration was signed by the European Commission and eight countries - Lithuania, Latvia, Estonia, Poland, Denmark, Sweden, Finland, and Germany.

The signatories agreed on smooth cooperation in the promotion of offshore wind energy and the improvement of transmission network infrastructure in the Baltic Sea, taking into account the need to ensure sustainable, environmentally friendly, competitive, and cost-effective development.

The aim is to strengthen the political, economic, and technological integration of the region through intensified joint work in the field of offshore wind. All parties also agreed that economically viable offshore wind projects should be developed in the Baltic Sea. The agreement provides for the parties to work together to ensure a level playing field for investors in offshore wind and market access.

The states also agreed to promote cooperation between transmission system operators in the planning of offshore wind project infrastructure, both off-shore and, where appropriate, onshore. This would contribute to a safer and more cost-effective integration of offshore wind energy.

Offshore wind cooperation will use the format of the Baltic Energy Market Interconnection Plan (BEMIP). In this format, a working group will be established to start work as soon as possible.

The development of offshore wind will be crucial for the EU to achieve its climate neutrality targets for 2050. As foreseen in the Paris Agreement, the European Green Agreement, and national energy and climate change plans, the growth of offshore electricity generation will be very strong in the coming decades. By 2050, the installed capacity of EU offshore wind projects is expected to increase by at least 20 times to 12 GW. In the Baltic Sea alone, the wind potential is 93 GW.

The current trends in the development of green energy are important for developers and investors of offshore wind farms, who should include Lithuania and the Baltic States in their investment plans.

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