Bidders Seek €0/MWh Market Premium In Lithuania Auction

Lithuania: Round 1 Of Maiden Tech-Neutral Renewable Energy Auction Attracts €0/MWh As Lowest Market Premium Sought By Three Bidders
08:18 AM (Beijing Time) - 25. December 2019
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Lithuania’s first tech-neutral renewable energy auction has made news in the first round with three bidders seeking nothing less than €0 per MWh bids to claim a stake to 300 GWh capacity on offer.

Key Takeaways

  • The first renewable energy tech-neutral auction in Lithuania attracts €0 per MWh as the lowest bid from three bidders
  • These bidders are vying to win out 300 GWh of capacity on offer and set up projects using solar, wind, biogas and biomass technologies
  • Under second round of the tender, they need to submit revised bids quoting a market premium that shouldn’t go lower than €0 per MWh, but could be €0 per MWh
  • Results of the winners will be announced in January 2020 and post that the country will hold another auction with 700 GWh of capacity on May 29, 2020

Lithuania’s National Energy Regulatory Council (VERT) says under the Eastern European country’s ongoing first technology neutral renewable energy auction process at least three (unidentified) bidders have offered a bid of €0 per MWh as preferred market premium to partake from 0.3 TWh or 300 GWh capacity on offer.

Technologies that qualify to participate in this tender are solar, wind, biogas and biomass. The council had launched the auction on September 2, 2019, capping the price premium bids at €48.93 per MWh (see Lithuania Proposes RE Auctions Till 2022). 

The zero price premium requested by the auction participants on the power exchange price has shown that both the current electricity price at the exchange and the cost of power plant installation allow it to operate under market conditions,” says Inga Žilienė, Chairwoman of VERT, after this was revealed in a meeting of the Inter-Institutional Auction Committee of the council with the national Ministry of Energy and Lithuanian Energy Agency.

However, as per the auction rules, in the second round the three bidders or ‘potential winners’ must submit revised bids offering a minimum bid that cannot go any lower than €0 per MWh but can be equal to €0 per MWh limit. These bids may be submitted to the council by December 30, 2019. Winning technology and the amount of capacity won will be announced in January 2020. 

On his LinkedIn post, Aistis Radavičius, the CEO of Lithuanian Wind Power Association, stated emphatically, “So as we all will still have to wait to know the winner(s), it is pretty clear that the winning bid will be €0/MWh.”

The council makes it clear that if the allocation of 300 GWh is not complete in the first auction, the unallocated amount will be assessed in future auctions.

Lithuania is already planning a second tech-neutral renewable energy auction to be held on May 29, 2020. Post this, it will hold two more auction rounds with 0.7 TWh or 700 GWh available for each on April 6, 2021 and April 19, 2022. The government has committed up to €146 million ($162 million) over 12 years to the winners of these auctions under the country’s Renewable Energy Act.

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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Anu Bhambhani