Ignitis, the energy group controlled by the Lithuanian government, has suggested that the Curonian Nord offshore wind farm project with a capacity of 700 megawatts in the Baltic Sea be delayed due to unfavorable market conditions, financial difficulties, and changes in government priorities.
Reasons for Project Delay
Ignitis and its subsidiary Ignitis Renewables have proposed to the Lithuanian ministries of energy and finance to review the project development timeline and maintain an option to resume the project when market conditions, financing, or technology improve. This proposal comes after a negative assessment from the National Audit Office of Lithuania last year, which indicated that the estimated project cost had increased by 27% to €2.8 billion ($3.13 billion), while the expected return on investment had decreased by nearly 40%.
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Financial and Commercial Considerations
The audit also revealed that Ignitis has spent €60.3 million on project development from 2023 to 2025 without securing long-term power purchase agreements, raising serious questions about the project's commercial viability. The Lithuanian Ministry of Energy has welcomed the delay proposal but emphasized that the final decision will rest with Ignitis.
Energy regulatory officials have warned that existing regulations impose penalties of about €24,000 ($26,860) per day for failing to meet project deadlines, underscoring the need to review the development timeline.
The Curonian Nord project is planned approximately 37 kilometers off the Lithuanian coast and covers an area of about 120 square kilometers. The facility could accommodate up to 55 turbines and generate about 3 terawatt-hours of electricity annually, which is equivalent to nearly a quarter of the country's current electricity needs.
Ignitis gained full control of the development last year after its previous partner, Ocean Winds, decided to sell its 49% stake in the project company. Despite the proposed delay, preliminary work continues, and Ignitis aims to obtain a construction permit by 2027. The company expects a decision on the project's future to be made by the end of 2026.
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