On February 11, 2025, the Latvian Cabinet of Ministers approved the ELWIND offshore wind farm study area on the western coast of Latvia, covering an area of 200 km², moving it approximately 7 km further out to sea.

The decision was made in response to a citizens’ initiative and an environmental risk assessment, thus confirming the importance of public participation in the development of the project.

ELWIND is a joint project between Latvia and Estonia with a planned capacity of up to 2 GW and a target date for commissioning by 2035. It is considered a potential example of a cross-border renewable energy joint project as provided for in Article 9 of the Renewable Energy Directive (RED III).

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Source: Ministry of Economics (Republic of Latvia), 18.02.2025.

Although Latvia has a maritime spatial planning document with five priority study areas (~1648 km²), there is no specific offshore wind law yet. The draft law ‘On offshore wind park in Latvian offshore waters and the fourth Latvia-Estonia interconnection’ which was intended to regulate the planned offshore wind farm ELWIND on the Latvian side has not yet been adopted. Currently, the regulations originally developed for offshore mining are applied to offshore wind projects.

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See Marine Environment Protection and Management Law, Construction Regulations for Structures in the Internal Waters, Territorial Waters and Exclusive Economic Zone of the Republic of Latvia (Regulations of the Cabinet of Ministers No. 631, 14.10.2014.)

Presentation at the 2^nd FORTHEM Annual Conference

Under the project “Life-cycle of an offshore wind farm in the legal framework: the case of Latvia”, participation took place in the 2^nd FORTHEM Annual Conference “Connecting Worlds of Science & Society,” organized by FORTHEM alliance, including the University of Latvia. Continue reading “Presentation at FORTHEM conference”

Lithuania suspends 700 MW offshore wind auction for review of conditions

The Lithuanian Ministry of Energy has proposed temporarily suspending the announced 700 MW offshore wind auction in the Baltic Sea in order to review its terms and conditions and ensure the least possible impact on the final price of electricity. When the government decides to resume the auction, it will continue in accordance with the rules and procedures set out in the Renewable Energy Sources Act.

The current auction was announced in November 2024 after the first round of the competition did not receive a sufficient number of bids.

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Source: Renewables Now, 22.01.2025.

EU RED III target: at least two cross-border offshore wind projects by 2030

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Article 9 of RED III requires all Member States to launch at least two cross-border renewable energy joint projects by 2030. ELWIND, a joint project between Latvia and Estonia, is currently the main contender for this status in the Baltic Sea context. The project potentially serves as a pilot initiative that could attract EU support, provided that it fully meets the criteria of the directive – an officially designated renewables acceleration area, a coordinated single contact point structure and a transparent licensing procedure in both countries. While Estonia is moving towards a single contact point and the digitization of licenses, Latvia has not yet adopted a specific law regulating offshore wind energy. In addition, there is no clear division of institutional responsibilities, which hinders cross-border synchronization. Without these components, ELWIND remains a plan rather than a real joint project within the meaning of RED III. This also raises the question of whether a second cross-border offshore wind project in the region will be identified and implemented by 2030.

In September 2024, the European Commission sent formal warning letters to 26 EU Member States in its infringement package, stating that they had not fully transposed the requirements of the revised Renewable Energy Directive (RED III) regarding the simplification and acceleration of the permit granting process. Continue reading “The European Commission is starting infringement procedures against 26 EU Member States, including Latvia, Lithuania, Estonia, and Poland, for not fully implementing the RED III requirements”

Reorganization of the Environmental State Bureau – establishment of the Energy and Environment Agency

In accordance with Cabinet Order No. 1191 of December 17, 2024, the Environmental State Bureau (VPVB) and the State Construction Control Bureau (BVKB) will be reorganized on February 1, 2025. The VPVB will take over the functions of the BVKB in the administration of energy policy, and the name of the office will change to the Energy and Environment Agency (EVA).

The new EVA will report to the Ministry of Climate and Energy, and its main objective will be to combine the functions of several institutions, thereby facilitating the implementation of renewable energy projects and making Latvia’s environment more attractive to investors.

Until now, project developers have often struggled to obtain various information or permits from multiple institutions – the EVA will significantly simplify this process by combining the functions of the responsible institutions in one place.

These changes also mark Latvia’s approach to creating a single point of contact in accordance with the requirements of the Renewable Energy Directive (RED III).

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Sources: On the Reorganization of the Environmental State Bureau and the State Construction Control Bureau (Cabinet Order No. 1191, 17.12.2024.); State Construction Control Bureau (Republic of Latvia), 17.12.2024.

Two-way contracts for difference are becoming the dominant model for offshore wind energy support in the region

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The mechanism of two-way contracts for difference is becoming the dominant support instrument for offshore wind energy projects in the Baltic Sea region. Lithuania is already moving towards this model, while Poland is gradually transitioning to a system of dynamic price adjustment and regional differentiation. This approach provides greater stability for investors by reducing the risk of market price fluctuations and ensuring long-term revenue predictability. At the same time, the state controls the amount of support, preventing excessive use of subsidies. However, national models differ – for example, in terms of the duration of two-way contracts for difference, indexation methods, capacity commitment obligations, and termination mechanisms. This means that investors need to conduct an in-depth analysis of each country’s system in order to avoid legal and financial risks. The lack of harmonization complicates the implementation of cross-border projects but also offers flexibility for national strategies.

The Lithuanian National Energy Regulatory Council (VERT) has re-announced a 700 MW offshore wind auction after the first round of the tender was suspended in January 2024 due to insufficient competition. The new tender provides for a Contract for Difference (CfD) support model and price indexation, with a deadline for applications set for March 18, 2025. The aim of the tender is to attract stronger investor bids and promote Lithuania’s strategic goal of developing 1.4 GW of offshore wind capacity by 2030.

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Sources: Renewables Now, 18.11.2024.; OffshoreWIND.biz, 18.11.2024.

The Polish government has adopted a law that allows different maximum electricity prices to be set for offshore wind farms depending on the geophysical conditions of the specific sea area (depth, seabed quality, distance from the coast). The new regulations give the Minister of Climate and Environment the right to set differentiated price caps by regulation, taking into account the actual construction and operating costs. This approach is intended to attract investors to less commercially attractive areas and improve market competition.

At the same time, the government has approved an increase in the price cap for the second phase of OWF development auctions from 471.83 PLN/MWh (around 110 EUR/MWh) to 512.32 PLN/MWh (around 118 EUR/MWh). This decision is based on current inflation data, cost increase analysis and investor signals that the previous rate is not sufficient for the viability of projects. In the previous phase (5.9 GW), the support price was 319.6 PLN/MWh (around 74 EUR/MWh).

New auctions are planned for 2025, 2027, 2029 and 2031 with the aim of selecting projects with a total capacity of 12 GW. The support system includes covering negative balance payments, providing investors with compensation for the difference between the market price and the guaranteed price. However, some industry representatives point out that the desired price level would be 500-600 PLN/MWh (around 115-138 EUR/MWh) to cover rapidly rising costs.

Source: BalticWind.EU, 14.11.2024.