When is the project auction expected?

The tender is planned for third quarter of 2023. 

How will the auction winner be determined?

[31-01-2023] The Government of the Republic of Lithuania, by its Resolution No 1049 of 19 October 2022, has set criteria and requirements for potential auction participants. The National Commission for Energy Control and Prices (NCC) plans to approve in Q1 2023 a description of the procedure for organising the tender and the issuance of permits, which will set out the process for organising the tender and the evaluation of bids. 

Tender participant must submit an implementation plan for the development of an offshore wind farm and its related infrastructure. Is there a possibility for the tender winner to change this plan during the offshore wind farm project construction implementation process?

According to the Renewable Energy Law (XI-1375 Lietuvos Respublikos atsinaujinančių išteklių energetikos įstatymas (lrs.lt)) Article No. 22 Part No. 22 Point No. 5: Obligations of tender winner may be changed upon the written agreement of the Lithuanian Energy Agency.

What agreements determine the relationship between the investor and state?

The relationship will be defined by the respective contracts, which will include obligations.

For example it is already clear that Palanga city municipality will be paid a fee of 1 EUR/MWh for the projects of local communities. The developer of the park would be obliged to pay a fee based on the amount of electricity generated and fed into the grid. It is planned that about 3 million euros will be paid per year.

What are the deadlines for tender organizing procedures and proposal submiting terms?

According to the Renewable Energy Law (XI-1375 Lietuvos Respublikos atsinaujinančių išteklių energetikos įstatymas (lrs.lt)) Article No.22 Part No. 9: tender procedure should last 180 calendar days from the date of publication of the information about the planned tender on the website of the Regulator. The registration of tenderers lasts 90 calendar days from the date of publication of the information about the planned tender. The Regulator determines the winner of the tender within 60 calendar days from the end of the registration of tender participants. This term can be extended by 30 calendar days on the grounds of the tender committee. It will be specified whether national security verification procedures will be included in the 180 calendric days.

What certificates should a tender participant provide before entering the tender to the regulator or any other government institution?

Requirements for tender participants and the documents and commitments submitted by them are described in Renewable Energy Law (XI-1375 Lietuvos Respublikos atsinaujinančių išteklių energetikos įstatymas (lrs.lt)), 2022-10-19 Government Resolution No. 1049 (1049 Dėl Reikalavimų asmenims, siekiantiems įgyti bei įgijusiems teisę plėtoti ir eksploatuoti atsinau... (lrs.lt)) an by the description of the procedure for organizing tender and issuing permits, which is in preparation procedure by Regulator.

What is the upper limit for the compensation for ensuring the perfomance of National security functions?

According to Article No. 49, Part No. 9, of the Renewable Energy Law (XI-1375 Lietuvos Respublikos atsinaujinančių išteklių energetikos įstatymas (lrs.lt)) tender winner should pay compensation for ensuring the performance of national security functions. The amount of this compensation is 18 euros per kilowatt of offshore wind capacity installed. The winner of the tender will also have to provide the guarantee of fulfilment of this obligation. No additional compensation supplements are established by legislation.

The tender winner must ensure the inclusion of small and medium-sized enterprises during the period of offshore wind farm and related infrastructure construction and operation. Please comment on the terms of engagement for these companies and penalties for not complying with this requirement?

2022-10-19 Government Resolution No 1049 (1049 Dėl Reikalavimų asmenims, siekiantiems įgyti bei įgijusiems teisę plėtoti ir eksploatuoti atsinau... (lrs.lt)) Articles Nos. 26 and 27 set the requirement that the tender participant should ensure that small and medium sized enterprises are involved during the period of offshore wind farm and related infrastructure construction performance of works and services (3% of their value during the entire period of their execution) and operation performance of works and services (10% of their value during the entire period of their execution). Articles 53.5 and 53.6 of the same resolution set out the fines that the tender winner will have to pay if it does not comply with the requirements related to the inclusion of small and medium-sized enterprises during the period of offshore wind farm and related infrastructure construction and operation.

The expenses incurred for the surveys and other preparatory works provided by state institutions will have to be compensated by the tender winner. When are these expenses going to be evaluated and published?

According to Renewable Energy Law (XI-1375 Lietuvos Respublikos atsinaujinančių išteklių energetikos įstatymas (lrs.lt) Article No. 22, Part No. 9, the results of the survey and other preparatory documents carried out on the order of state institutions, and the expenses related to their preparation, which will have to be compensated by tender winner, should be publicly announced within 2 working days from the day of their receipt, but no later than the announcement of the information about the planned tender.

What are the requirements for development fee payment?

According to 2022-10-19 Government Resolution No. 1049 (1049 Dėl Reikalavimų asmenims, siekiantiems įgyti bei įgijusiems teisę plėtoti ir eksploatuoti atsinau... (lrs.lt)) Article No. 55, the development fee must be paid within 5 years from the date of the permit to produce electricity. The development fee will have to be paid annually in equal amounts.

Will the documents submitted by tenderers have to be in Lithuanian? Will the currency of the documents supporting the financial experience requirements have to be in euros? If the tenderer operates in a country with a different currency, what exchange rate should be used in the documents submitted to the tendering authority in support of the financial experience requirements?

[31-01-2023] Tenderers will be required to submit to the organiser documents supporting their financial experience and other documents justifying the fulfilment of the legal requirements in Lithuanian or with a translation into Lithuanian. The information provided in the documents supporting the financial capacity requirements does not have to be in euro, but the foreign currency used in the documents submitted will be converted into euro for the purpose of assessing the eligibility of the Tenderer. The National Energy Regulatory Council’s description of the procedure for organising tenders and issuing authorisations will specify the requirements for documents supporting financial experience, including the exchange rate for currency conversion.

Is it possible to draw up a thematic table showing the financial commitments made by the offshore wind park developer under the different pieces of legislation?

[31-01-2023] Yes, a thematic table of financial commitments by an offshore wind park developer is also planned to be prepared and made public. Please follow the information on the Offshorewind.lt website.

When is the description of the procedure for organising tenders and issuing permits to be approved by the National Energy Regulatory Council?

[31-01-2023] The National Energy Regulatory Council plans to approve the description of the procedure for organising tenders and issuing permits in Q1 of 2023.

When does the National Energy Regulatory Council plan to publish the methodology for determining the maximum transaction price?

[31-01-2023] Pursuant to Point 14 of Article 22 of the Law on Energy from Renewable Sources of the Republic of Lithuania (the wording of the Article will enter into force two months after the approval of the European Commission) (XI-1375 Law on Energy from Renewable Sources of the Republic of Lithuania (lrs.lt)), the National Energy Regulatory Council shall prepare and publish the information necessary to determine the maximum possible transaction price one month before the date of publication of the maximum possible transaction price, and shall determine and publish the maximum possible transaction price and the lowest threshold 6 months before the date of publication of the information on the tender. In line with this provision of the law, the National Energy Regulatory Council plans to publish the methodology for establishing the maximum transaction price in February 2023.

When is the offshore wind park infrastructure corridor planned to be specified?

[31-01-2023] The infrastructure corridor for the connection of the offshore wind park will be determined by the decisions of the Engineering Infrastructure Development Plan for the territories necessary for the connection of the power plants using renewable energy sources planned to be developed in the part(s) of the territorial sea of the Republic of Lithuania and/or the exclusive economic zone of the Republic of Lithuania in the Baltic Sea to the electricity transmission grid. The concept of this development plan is expected to be approved in October 2023 and the solutions will be approved in Q3 2024.

Please advise how the transfer of rights to land for the construction and operation of connection infrastructure to the holder of the development and operation permit will be implemented?

[31-01-2023] Discussions are currently underway between the responsible public authorities to ensure the development of the engineering infrastructure and operational activities for the future offshore wind park tender winner. It is not yet possible to give a concrete answer on what basis and in what form the offshore wind developer will be granted the land rights to construct and operate the offshore wind infrastructure.

Please advise whether the State will provide guarantees on the granting of rights to the holder of a development and operation permit for the construction and operation of the connection infrastructure in a timely manner and to an adequate and sufficient extent to obtain a building permit and to operate the infrastructure properly?

[31-01-2023] Discussions are currently underway between the responsible public authorities to ensure the development of the engineering infrastructure and operational activities for the future offshore wind park tender winner. We do not yet have a concrete answer as to whether the State will provide guarantees on the granting of rights for the construction and operation of the connection infrastructure.

Please advise whether, if necessary, the State also grants (will also grant) land rights to land needed only during the construction period on plots adjacent to the route?

[31-01-2023] The solutions of the Engineering Infrastructure Development Plan will establish easements and other land use solutions to ensure the possibility of constructing and operating engineering infrastructure within the boundaries of the engineering infrastructure corridor defined in the special plan. If the successful tenderer’s sites and (presumably) transferred land rights, provided by the special plan, are insufficient for the development of the infrastructure, it will be up to the offshore wind power plant developer to secure the onshore use of the sites for its own purposes, for the implementation of the offshore wind infrastructure, at its own cost and expense.

Please advise whether the developer will have to compensate the transmission system operator for the funds paid by the transmission system operator to the landowners as compensation for the establishment of land rights, in the scope of the territorial planning and related services for the connection infrastructure (project of special national interest) that has been initiated? If so, how much of this will have to be reimbursed by the developer and when is this information expected to be published?

[31-01-2023] Given that the responsible public authorities are currently in discussions on the possibility of providing the development and operation of the engineering infrastructure to the future winner of the tender organised by the National Energy Regulatory Council, it is not yet possible to provide an answer to this question.

In the event that the developer is allowed to use the Harmony Link corridor and the easements established for the benefit of the transmission system operator, the area subject to the special land use conditions for the developer’s engineering infrastructure will fall within the area of the easements established for the benefit of the transmission system operator. In such a case, will the developer have to compensate the landowners for the constraints resulting from the imposition of special land use conditions on the developer’s infrastructure (the interconnection), when the transmission system operator will have already compensated the landowners for the imposition of the easements in the Harmony Link project and thus will have compensated the landowners for the land use constraints that resulted?

[31-01-2023] The planned position of offshore wind park interconnection corridors has not yet been specified. In order to plan the corridor, the preparation of a special territorial planning document for the interconnection corridor has been initiated. It should be noted that in accordance with Paragraph 5 of Article 13 of the Law on Special Land Use Conditions, no compensation shall be payable where the same or different restrictions have been compensated for, provided that the area (part thereof), the application of restrictions arising from the determination of which was compensated, coincides with the newly established area (part thereof) referred to in this Law. Paragraph 4 of Article 75 of the Law on Energy of the Republic of Lithuania stipulates that the procedure for the maintenance, repair, reconstruction and modernisation of the electricity grids connecting power plants using renewable energy sources with the onshore grids shall be established by mutual agreement between the holder of the permit for the development and operation and the grid operators.

In the cases referred to in Point 6 of Paragraph 5 of Article 27 of Law on Construction, a contract, consent or agreement with the owner or manager of the land plot (territory) or documents confirming the establishment of an easement (in the case of engineering structures) must be submitted to obtain a building permit. Please clarify how the holder of the development and operation permit will be issued with a building permit for engineering structures if the holder of the development and operation permit uses the easements established for the benefit of the transmission system operator, and therefore does not have a contract, consent or agreement with the owner or manager of the land plot (territory), and does not have the documents confirming the establishment of the easement for his benefit, as the possession of such documents is not necessary to exercise the right provided for in Paragraph 4 of Article 75 of the Law on Electricity?

[31-01-2023] This issue is within the remit of the Ministry of the Environment and the State Territorial Planning and Construction Inspectorate, and we will update our response accordingly once we have received responses from these institutions.

Please clarify whether the holder of the development and operation permit will be able to register the ownership of the electricity network in the Real Estate Register, given that the holder of the permit will not have any rights to the land on which the electricity network is to be built, either ownership, lease or easement, when the easement established for the benefit of the transmission system operator will be used, in accordance with Paragraph 4 of Article 75 of the Law on Electricity?

[31-01-2023] This issue is within the remit of the Ministry of the Environment and the State Territorial Planning and Construction Inspectorate, and we will update our response accordingly once we have received responses from these institutions.

What construction and equipment restrictions apply to the project?

The parameters are provided by the Environmental Impact Assessment (EIA) and the Strategic Environmental Impact Assessment (SEA).