Ocean Winds walks away from awarded project in new blow to Baltic offshore wind

Baltic region offshore wind has suffered a new blow as Engie-EDPR tie-up after Ocean Winds decided to walk away from an already awarded project.

The developer signed a sale and purchase agreement last week to sell its 49% stake in the 700MW Curonian Nord offshore wind project off Lithuania to domestic utility Ignitis Group for an undisclosed amount.

The Baltic nation’s energy regulator NERC has already approved the transaction.

Ignitis will become the full owner of the project, while Ocean Winds is concentrating its activities in other markets.

Major blow

While Ignitis said the change will not affect the implementation of the Curonian Nord project, the exit of an experienced Western European player is a major blow to wind at sea in the Baltic states of Estonia, Latvia and Lithuania

These Baltic nations so far have no turbines in the water, but retain high hopes of building up a domestic sector and thus strengthening their energy independence from Russia.

Ignitis and Ocean Winds in 2023 won Lithuania’s first offshore wind tender, offering a ‘power plant development fee’ of €20m ($23m), making Curonian Nord the first project to be awarded in a Baltic state, even though the tender was still subsidy-free.

The country’s subsequent attempts to auction off a second 700MW site off its Baltic Sea coast have failed several times, even though Lithuania’s government had sweetened tendering conditions and offered contract for difference (CfD) support with a €125.74 per megawatt hour price ceiling.

The other Baltic states lag further behind in offshore wind development, although Estonia has already awarded 5GW of leased areas in seabed lease auctions.

The small populations of the Baltic states, as well as their proximity to Russian waters, are factors likely scaring off established offshore wind developers from investing.

Ignitis said it continues the work on the Curonian Nord project independently and claims it has all the necessary managerial and financial capacities to implement the preparatory work and the required investments to obtain a construction permit in 2027.

The developer, however, aims to select a new partner prior a final investment decision.