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Published: 9/3/2020. Updated: 9/3/2020

NERC: the auction for renewable energy did not take place


The National Energy Regulatory Council (NERC) informs that less than 3 bids were received in this year's auction for the allocation of the quota for the promotion of electricity production from renewable resources, which provided for the allocation of 0.7 TWh quota, after the extended deadline for submission of documents, therefore, the auction is declared void.

The Chair of the Council of NERC Inga Žilienė considers that this could show that both the current electricity price on the market and the costs of power plant installation allow operating under market conditions and without state incentives.

The second auction

At this year's auction, participants were offered to bit for the maximum – 3.02 Eur/MWh – price premium to the market price. The state price premium is given for 12 years.

The auction was announced on 29 May 2020. Bidders were able to submit documents to the auction from 10 August 2020, with an extension until 31 August. Documents for the auction were also accepted in an electronic form.

In the failure of this auction, the 0.7 TWh quota will be allocated to other auctions. The next auction will be announced on 6 April 2021.

All technologies can participate in the technology-neutral auction, namely, wind, solar, biomass, biogas.

The first auction

The NERC reminds that 0.3 TWh quota was allocated in the first auction, it was won by UAB "WINDFARM AKMENĖ ONE". The company offered a price premium of 0 Eur/MWh to the electricity market price and the maximum annual amount of electricity production. A total of 7 bidders took part in the first auction (8 bidders submitted applications, but the documents submitted by one bidder did not meet the requirements). The premium price to the electricity market was set at 3.86 Eur/MWh.

The aim of the State is that in 2020 the share of electricity produced from the RES in Lithuania in the final balance of electricity consumption would be at least 20%, but already in 2019 the share of electricity produced from the RES was 20.91%.

In 2019, 2,330,349 GWh was generated from RES, or 64% of the total amount of electricity produced in Lithuania (3639.8 GWh, including the amount produced by Kruonis PSHP).

Most electricity from RES is generated by wind farms (62%).

General information about the auction

The winner(s) of the auction shall have the priority of electricity transmission both over the producers of electricity from the RES and over other energy producers, i.e. those producing electricity from other resources than RES.

The auction winner(s) may also receive a price premium to the electricity market price for 12 years (if the offered price premium is higher than 0 Eur/MWh): the price premium is paid if the market price is lower than the maximum price set by NERC.

The winner of the auction undertakes to produce the amount of electricity won at the auction for 12 years (at least 80% of the won promotion quota).

Example of incentive scheme: maximum price, reference price and price premium

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