A tender is currently underway to select a developer to develop an offshore wind farm in Lithuania's territorial waters in the Baltic Sea. Tenderers have until 29 May 2023 to submit their applications and documents to the National Energy Regulatory Council (NERC). The developer offering the highest development fee to the State will win the tender.
An offshore wind farm is expected to be built in Lithuania’s territorial waters in the Baltic Sea, almost 36 km offshore with 700 MW of generating capacity.
We comment on the minimum installed capacity and the permissible generation capacity, as well as on the period of validity of the performance security to be provided upon signature of the Letter of Intent.
Concerning the minimum installed capacity and the permissible generating capacity in the tender documents
Taking into account the provisions of Article 201(2) of the Law on Electricity and Government Resolution No 171 of 15 March 2023, which sets the minimum installed capacity (580 MW) and the maximum permitted generation capacity (700 MW), applications for pre-connection conditions should indicate the installed capacity, which may be higher than the permitted generation capacity. The permissible generation capacity cannot exceed the installed capacity of the power plant. It should be noted that a letter of intent is an agreement between a grid operator and a grid user who intends to build or install a power generation facility, whereby the grid user undertakes to prepare its electrical installations for connection to the electricity grid within a specified period of time and the grid operator undertakes to connect the electricity installations of the grid user to the electricity grids it operates within a specified period of time.
The information provided in the Letter of Intent submitted to the tender will be taken into account when authorising the development and operation of offshore power plants.
On the validity period of the performance security provided following the signature of a letter of intent
Taking into account the provisions of Article 221(25)(2) of the Law on Renewable Energy (to obtain, within 6 years from the date of obtaining the development and operation permit, a permit to generate electricity for the authorised generation capacity of the plant as specified in the Letter of Intent), and in the light of the provisions of Article 221 of the Law on Renewable Energy the deadlines for the execution of the procedures, the deadlines for the issuance of permits for the development and operation of offshore power plants, and the provision of Article 211(1) of the Law on Electricity, which requires that the performance bond must be valid for 30 calendar days longer than the letter of intent, the performance bond should be valid until at least 31/12/2029. This time limit could be shorter if the person seeking to participate in the Tender commits to construct the power plants within a time limit of less than 6 years from the date of obtaining the development and operating permit, and if this is enshrined in the Letter of Intent concluded.
In addition, it should be noted that in accordance with Article 211(1) of the Law on Electricity, the amount of the performance security to ensure the fulfilment of the producer's obligation in accordance with Article 221 of the Law on Renewable Energy shall be calculated by multiplying the amount of the permissible generation capacity of the power plant to be installed in the maritime territory of Lithuania, as specified in the Letter of Intent, multiplied by EUR 75 per 1 kW.
