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Cooperation suspended between Latvenergo and RWE in the development of offshore wind farms

Latvenergo and the German energy company RWE have suspended cooperation in the development of offshore wind parks, and Latvenergo has found a new partner for this project, Martins Cakste, Chairman of the Board of Latvenergo, told LETA in an interview.

He explained that inflation, bank financing and logistical bottlenecks made offshore wind farm technology uncompetitive with onshore wind farms, and virtually all projects in the Baltic Sea were put on hold. Developers consolidated their projects and moved to locations where they had, for example, government guarantees.

“Almost everybody moved to the North Sea, where there is much higher electricity consumption, more serious companies. Denmark’s Orsted, RWE and a few other players decided to leave the Baltic market for a while,” Cakste said.

At the same time, he stressed that Latvenergo has found another partner for the development of offshore wind farms and plans to announce this partner publicly in the near future.

Regarding the participation in the auction of the Elwind offshore wind farm project, Cakste said that Latvenergo will definitely participate in the auction and is preparing for it.

“It is clear that the project’s deadline has moved a little further away, but I would say that economically there is not so much urgency anymore, because this technology has to “come out” of the crisis moment and find a balance point between efficiency and technology development, the market has to stabilize, because at the moment manufacturers of offshore wind turbines in Europe are making huge losses,” said Cakste.

The Latvenergo CEO also added that once this crisis is over, offshore wind technology will be competitive again. That is why onshore wind farm projects, which are currently more commercially viable, are important.

Cakste added that the company could also develop wind farms outside Latvia, including Latvenergo’s purchase of a 20 megawatt (MW) wind farm in Lithuania, but the company is looking at such opportunities not only in Lithuania, but also in Estonia and Poland.

Latvenergo had agreed with German energy company RWE in September 2022 to cooperate on the development of offshore wind farms.

The wind park is planned to be completed by 2030.

As reported,  Latvenergo Group’s turnover last year, according to preliminary data, reached EUR 2.027 billion, which is 10 percent more than a year before, while the Group’s profit increased by 90 percent and amounted to EUR 350.2 million.

Latvenergo Group is one of the leading energy suppliers in the Baltics operating in electricity and thermal energy generation and trade, natural gas trade and electricity distribution services. Latvenergo is a state-owned company and the shareholder is the Economics Ministry. Latvenergo bonds are traded on the Nasdaq Baltic Bond List.

Source: BNS

(Reproduction of BNS information in mass media and other websites without written consent of BNS is prohibited.)

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