Lithuania's Ignitis Group Seeks to Delay $3.37 Billion, 700-MW Baltic Sea Offshore Wind Project

The state-controlled energy company Ignitis Group has asked the Lithuanian government to put a planned 700-megawatt offshore wind farm in the Baltic Sea on hold, a development that could stall a project valued at approximately USD 3.37 billion.

In a statement issued on Wednesday, the company said it and its subsidiary Ignitis Renewables would approach the energy and finance ministries with a request to adjust the project's implementation schedule, a postponement designed to keep the door open for restarting development once conditions improve. Ignitis Group chief executive Darius Maikstenas framed the proposal as a matter of weighing national benefit against the need for renewable capacity.

"Lithuania needs to increase its power generation capacity from stable renewable sources, and offshore wind is one of the most stable. However, it is important to choose a path for the further development of the offshore wind farm project that creates the greatest value while best serving the state's interests," he said.

Costs climb, returns shrink, audit shows

The push to delay follows an audit by the National Audit Office conducted last autumn, which found that market shifts since 2023 have driven the project's cost up by 27 percent while cutting projected returns by 40 percent.

The audit office also issued a recommendation that a decision on the project's further implementation be made by the end of the year. Those findings have colored the political debate in Vilnius. In July, Energy Minister Lukas Savickas said there was no point in pursuing the first offshore wind farm simply for the sake of completing it and pledged an immediate decision on its future.

Prime Minister Mindaugas Sinkevičius likewise stressed that Lithuania would not rush to determine how many offshore wind farms it needed and would not back state projects that lacked economic justification. Scepticism has extended across party lines.

Also in July, former energy minister Žygimantas Vaičiūnas declared the project currently unfeasible, arguing that the two Baltic Sea offshore wind initiatives planned by the previous Conservatives-led government had been a mistake. In late September, Deputy Energy Minister Ignas Junevičius said a commercial offshore wind farm could still be built in Lithuania in the future, but only if electrification progressed successfully, domestic industry expanded, or large foreign energy consumers were attracted to the country.

Parliament committee pulls project into government review

Institutional scrutiny intensified last week when the Seimas Audit Committee decided to ask the government to coordinate the process. The committee instructed the Energy Ministry to lead an assessment of the prospects for the first offshore wind farm project and called on the Finance Ministry to immediately assess whether the letter of shareholder expectations submitted to Ignitis was consistent with market conditions, electricity demand forecasts, and return-on-investment requirements. The energy and finance ministries are now expected to deliver a final verdict on the project's fate by the end of this year.

Three paths identified in cost-benefit analysis

A cost-benefit analysis prepared by Ignitis Group lays out three possible courses of action: freezing the project outright, seeking partners in neighbouring countries along with European funding, or proceeding with construction while raising the final electricity tariff for consumers.

Work continues toward a 2027 construction permit

Despite the proposed pause, Ignitis Renewables said it is continuing preparatory work and making the necessary investments to secure a construction permit in 2027, with the permit expected to be issued in the near future. Among the key issues the company says must still be resolved are aligning the project schedule with the actual duration of offshore wind farm development, linking financial commitments to the start of construction, accelerating procedures for onshore infrastructure, and adapting design and work organisation rules to suit offshore wind projects.