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Published: 8/30/2019. Updated: 1/16/2020

Technologically neutral auction of electricity of renewable sources


INFORMATION ABOUT THE OF AUCTION: UAB WINDFARM AKMENĖ ONE WON THE AUCTION
​The winner of the auction

On the 16th of January National energy regulatory council (NERC) announced the winner of the auction for the allocation of quotas for the promotion of electricity from renewable sources – UAB WINDFARM AKMENĖ ONE.

WINDFARM AKMENĖ ONE UAB, recognized as the winner of the auction, offered 0 Eur / MWh price premium to the market price and a maximum annual amount of electricity production - this participant will receive the entire 0.3 TWh incentive quota.

According to the Law on Renewable Energy, the operator must accept, transmit and / or distribute on a priority basis the total amount of electricity offered by the winner of the auction for 12 years from the start of electricity generation.

Offers from participants

A total of 7 bidders participated in the auction. Three bidders offered a price premium of 0 EUR / MWh to the market price, while others offered 0.56 EUR / MWh, 1.81 EUR / MWh, 1.91 EUR / MWh and 3.86 EUR / MWh (maximum possible price premium - 3.86 Eur / MWh).

Participants who offered the lowest price premium (0 Eur / MWh) to the market price submitted the revised bids. Taking into account that the offered lowest price premium was the same by all participants, the participant who offered the highest annual amount of electricity production was announced as the winner of the auction.

The auction for the allocation of the promotion quota for 0.3 TWh of renewable electricity was launched on 2th of September, 2019. The Auction was conducted in accordance with the Regulation of Auction of Incentive Quota of Electricity Production of Renewable Sources approved by the NERC.

Auction stages:
• 2019 September 2 - announcement of the Auction.
• 2019 November 11 – 2019 November 25 – acceptance of documents.
• 2019 November 26 – first meeting of the Auction committee.
• 2019 December 3 – December 12 – meetings of the Auction committee.
• 2019 December 18 – approval of the list of participants at the NERC meeting.
• 2019 December 20 – Stage I Committee of the Auction.
• 2019 December 24 – 2019 December 30 – submission of envelopes with revised tenders.
• 2020 January 7 – Meeting of the Auction stage II committee.
• 2020 January 16 – confirmation and announcement of the winner of the Auction.

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More information is avialable in Lithuanian.



Legal Acts
Law on amendments of Art. 1, 2, 3, 5, 11, 13, 14, 17, 20, 201, 21, addition of Art. 631 and void of Art 15 of Law on Energetics of Renewable Saurces No. XI-375 (available in Lithuanian here)
Methodology on electricity market price and reference price setting, adopted by decision No. O3E-152, 24 May 2019 (available in Lithuanian here)
Methodology on maximum price of electricity, produced of renewable saurses, adopted by decision No. O3E-139, 20 May 2019 (available in Lithuanian here)
Examplary form of intent protocol of connection of electricity equipment to the electricity network, adopted by decision Nr. O3-163, 1 July, 2011 (new version adopted 26 April, 2019) (available in Lithuanian here)
Description of the rules of producers of electricity use of AB „Litgrid“ transmission network, adopted by decision No. O3E-197, 12 June, 2019 (available in Lithuanian here)
Regulation of auction of incentive quota of electricity production of renewable sources, adopted by decision Nr. O3-229, 29 July, 2011 (new version adopted 2 August, 2019) (available in Lithuanian here)
Maximum price of electricity of renewable sources​Reference price
48,93 Eur/MWh45,07 Eur/MWh
​September 2, 2019 starts the first technologically neutral auction of electricity of renewable sources. The provided quota to be distributed is 0,3 TWh.
​The maximum price and reference price are used to calculate the maximum price premium to the market price.
The maximum price is calculated as costs, necessary to produce 1 MWh electricity of renewable sources, using the most efficient technologies (in 2019 the solar and wind technologies were evaluated). Reference price is calculated as weighted average of 3 years market price, i.e. price, that person reasonably expects to get selling electricity  of renewable sources at the pool.
The maximum premium, for which is announced the auction, is calculated as difference between maximum price and reference price. The participant of Auction provide the offers for wished price premium (it can be equal or less then maximum price premium). The winner is defined by the lowest offer, price premium is given for 12 years.
​Concrete value depends on the market (pool) prices, but in any case it cannot exceed maximum price. I.e. of the market prices exceeds set maximum price, the price premium is not paid, as persons costs are covered by market price.
Example of incentive scheme: maximum price, reference price and price premium

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Scheme of winner determination

The common scheme shows common principles of winner determination. The process can differ in different situations. Detailed processes can be find in the annexes to common scheme (schemes are available only in Lithuanian). The examples in the annexes must be read not as the continuation of common scheme, but as entire process from the beginning (offers) to the end (determination of winner or (and) undistributed quota).

More information is available in Lithuanian.