WindEurope has hailed Lithuania’s decision to use a contracts for difference (CfD) mechanism in its upcoming second offshore wind tender.
The group hailed the CfD model as providing a more stable system for future offshore development than the negative bidding model previously used.
Scheduled for autumn this year, the Baltic Sea auction aims to add another 700MW of offshore wind capacity to the country.
Lithuania’s National Energy Regulatory Council previously set the prices that bidders can offer between €64.31 and €107.18 per MWh.
The country’s first 700MW wind tender, which was provisionally won by a consortium consisting of Ocean Winds and local company Ignitis Group, used a negative bidding model. This requires bidders to pay for the rights to develop the project, with Ocean Winds and Ignitis paying €20m in the recent auction.
WindEurope criticised the payment, saying that applying uncapped negative bidding in auctions drives up costs for the supply chain and consumers.