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Published: 9/4/2019. Updated:

Auctions to promote the development of renewable energy are being launched


The National Energy Regulatory Council (NERC) notifies that on the 2nd of September the first technologically-neutral auction is launched. All technologies solar, wind, biogas, and biomass can participate in the Auction. The participants in the Auction will compete for the opportunity of getting a price premium on the market price.

IMPORTANT. With the announcement of the start of the Auction, i.e. from 2 September 2019, the 70 calendar day period begins to run. Those who wish to participate in the Auction must follow the steps listed below during this period:

• must obtain preliminary conditions of connection, agree on guarantee of the fulfilment of obligations, and sign a letter of intent with the electricity grid operator, perform other procedures provided for in the Law on Energy from Renewable Sources, and in the Regulations of the Auction approved by the NERC;

•  perform calculations and prepare a bid on preferred price premium on the market price.

The documents of the participants in the Auction will be accepted from 11 November 2019 to 25 November 2019 (inclusive), the first meeting of the Auction Committee will be held on 26 November 2019.

The bids of the participants will be strictly evaluated in accordance with the Regulation of auction of incentive quota of electricity production of renewable sources. The bids which do not meet the qualifying requirements will not be able to compete for the price premium.

In the near future, the NERC will approve and will make publicly available the Committee of the Evaluation of the Tenders of the Participants in the Auction, which will be composed not only of the representatives of the NERC but also of the representatives of other institutions: the Ministry of Energy, Lithuanian Energy Agency, and Vilnius University.

Conditions of the Auction, and determining the price premium of the successful participant in the Auction

• The maximum price premium of the successful bidder, which is the object of the auction, is calculated as the difference between the maximum price and the reference price.

• The participants in the Auction will be able to make bids on preferred price premium (it can be equal or lower than the maximum one), and the successful bidder will be selected based on the proposed lowest price premium.

• The specific price premium paid to the successful bidder will depend on electricity prices on the market. However, in any case it cannot exceed the maximum price set by the NERC.

• The maximum price set by the NERC will not change throughout the period of the entity promotion (12 years).

Conditions of the Auction  
Intended to allocate promotion quota 0.3 TWh
Promotion period 12 years
The reference price of electricity from RES calculated for the Auction 45.07 EUR/MWh
The maximum price of electricity from RES48.93 EUR/MWh
The maximum price premium3.86 EUR/MWh


Fig. 1. Example of promotion scheme: the maximum price, the reference price, and the price premium paid to the successful bidder(s)

 PAV_EV_auctions.jpg

The successful bidders will be announced at the beginning of 2020. If the total intended 0.3 TWh promotion quota will not be allocated during the 1st Auction, the remaining not allocated amount will be assessed by setting the quotas of auctions planned in the future.

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All information about the Promotion Quota Allocation Auctions is available for reference of the market participants in section "Auctions" of the website of the NERC.