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05-10-2023

Commission approves €193 million Lithuanian scheme to support offshore wind farms to foster the transition to a net-zero economy

The European Commission has approved a €193 million Lithuanian scheme to support offshore wind farms to foster the transition towards a net-zero economy, in line with the Green Deal Industrial Plan. The scheme was approved under the State aid Temporary Crisis and Transition Framework, adopted by the Commission on 9 March 2023 to support measures in sectors which are key to accelerate the green transition and reduce fuel dependencies. The new Framework amends and prolongs in part the Temporary Crisis Framework, adopted on 23 March 2022 to enable Member States to support the economy in the context of the current geopolitical crisis, already amended on 20 July 2022 and on 28 October 2022.

Lithuania notified to the Commission, under the Temporary Crisis and Transition Framework, a Lithuanian scheme to support the rollout of renewable offshore wind farms to foster the transition towards a net-zero economy.

The measure will be open to companies active both in Lithuania and in other Member States for participation in a tender for the authorisation to develop and operate a new offshore wind power plant. The project, to be supported under the scheme, will be selected through a competitive bidding process for a specified area in the Baltic Sea with a capacity of 700 MW.

Under this measure, the aid will take the form of a variable premium under a two-way contracts for difference (“CfD”) for a duration of 15 years, which will be calculated by comparing a reference price, determined in the tender offer of the beneficiary, as well as by the market price for electricity.

The beneficiary will be entitled to receive an aid equal to the difference between the strike price and the market prices for electricity as soon as the market price is below the strike price. However, the beneficiary will have to pay the difference between the two prices to the State as soon as the market price is above the strike price.

The Commission found that the Lithuanian scheme is in line with the conditions set out in the Temporary Crisis and Transition Framework. In particular, the aid (i) will be granted through a competitive bidding process; and (ii) will be granted before 31 December 2025.

The Commission concluded that the Lithuanian scheme is necessary, appropriate and proportionate to accelerate the green transition and facilitate the development of certain economic activities, which are of importance for the implementation of the REPower EU Plan  and the Green Deal Industrial Plan, in line with Article 107(3)(c) TFEU and the conditions set out in the Temporary Crisis and Transition Framework.

On this basis, the Commission approved the aid measure under EU State aid rules.

For more information visit: https://ec.europa.eu/commission/presscorner/detail/en/ip_23_3843