Lithuania’s Ignitis seeks to postpone €3bn Baltic offshore wind project as costs rise 27%

Lithuania's state-controlled energy company Ignitis Group has proposed postponing its planned 700 MW offshore wind farm in the Baltic Sea, estimated to cost around €3bn, amid deteriorating market conditions, rising construction expenses and concerns over the project's commercial viability, independent Lithuanian news agency BNS reported on October 21.

The proposal raises fresh questions about Lithuania's renewable energy ambitions and its ability to attract investment into large-scale offshore infrastructure. Although offshore wind could strengthen energy security and reduce dependence on imported electricity, higher development costs and uncertain demand threaten to undermine the project's economic benefits.

Ignitis and its renewable energy subsidiary intend to ask the Energy and Finance ministries to revise the development timetable while keeping open the possibility of restarting construction when market conditions improve.

"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," Ignitis Group CEO Darius Maikstenas said, BNS reported.

A National Audit Office assessment found that construction costs had increased by 27% since 2023, reaching €2.8bn, while projected investment returns had fallen by 40%.

Ignitis Renewables invested €60.3mn between 2023 and 2025, but the project has yet to secure long-term electricity purchase agreements with major consumers.

The company has outlined three possible scenarios – suspending development, attracting international partners and European funding, or proceeding with construction at the expense of higher electricity tariffs.

The original commercial operation target of 2030 could slip by as much as five years.

Despite the proposed delay, Ignitis plans to continue preparatory activities, including securing a construction permit in 2027.

Lithuanian officials have increasingly questioned whether the project remains financially justified.

Former Energy Minister Zygimantas Vaiciunas described the original development strategy as a mistake, while Prime Minister Mindaugas Sinkevicius has ruled out pursuing economically unjustified state projects.

A separate tender for another 700 MW offshore wind farm also failed to attract sufficient competition.

The Energy and Finance ministries are expected to decide the project's future by the end of 2026, BNS reported.