On Thursday, VERT submitted a proposal for a new procedure, according to which clearer criteria are set for businesses wishing to develop solar power plant projects. Businesses that meet them could receive the desired network bandwidths, which they recorded in their letters of intent until July of this year.
According to the calculation of the Ministry of Energy, by the beginning of July, the desired capacity of solar power plants could reach about 5 GW (gigawatts) by businesses that have signed letters of intent, but currently the legally permitted capacity is only 2 GW.
The Ministry of Energy says that the maximum limit for commercial solar projects has been set in order to ensure that the capacity of the electricity network is sufficient for both business and generating consumers, as well as for the capacity of other renewable energy resources, writes BNS.
As a result of this discrepancy, in July VERT launched an investigation into whether permits to connect commercial solar projects to the grid were legally issued and whether their power was reasonably reserved.
If the new VERT procedure presented on Thursday were to be applied, part of the projects should fall back. However, if even then the limit of the desired bandwidths exceeds 2 GW, the desired power in the corresponding amount is recorded in the protocols of intent for all remaining businesses (lat. around the clock) would be reduced until the overall limit of 2 GW is reached.
Meanwhile, if the total capacity of the projects does not exceed 2 GW after the fall of unsuitable projects, they will be able to be developed as planned.
Businesses that are extremely dissatisfied with this procedure call the procedure proposed by VERT “legal nonsense” and emphasize that if it were to be implemented, already planned business models could collapse.
The Green Genius Guide: That’s How It Hurts Smaller Projects
15 minutes Ruslanas Sklepovičius, the manager of Green Genius, an energy company belonging to Modus group, said that his company would maintain order if permits were granted to those businesses and projects meeting the criteria that signed the letters of intent the earliest.
He noted that the date criterion – permits are awarded to the first businesses to fill the published quota – was in place in all cases, and this VERT proposal “fundamentally changes the procedure”.
R. Sklepovičius also emphasized that he is against the proposal around the clock for the reduction principle.
Company photo/”Green Genius” solar power plant
“What this does is hurt smaller projects more because connection costs stay the same. This is a legal absurdity. According to all regulatory logic and history, it was always calculated based on the date of issuance of permits. Around the wheel in the sense of law, it means that everyone must agree, and if the market does not agree, how can you reduce their powers?” he asked rhetorically.
R.Sklepovičius also reminded that although there is a lack of generation capacity in Lithuania, all new commercial business projects remain suspended, as market participants have been waiting for several months for VERT and Ligrid to clarify whether the requested bandwidths will be provided.
“Our request was submitted back in June. Normally, such a permit should be issued within 30 days. Today, 90 days have already passed, and the regulator is still asking questions, counting plots and so on,” the interlocutor complained.
A. Radavičius: division would be a big mistake
With the fact that VERT is offered around the clock the principle would be a bad option, the manager of Rene Group, another partner of Aura Power in Lithuania, which intends to develop solar power plants, agrees Aistis Radavičius.
However, according to him, the optimal alternative would be not to give the requested bandwidths to the market participants who signed the letters of intent at the earliest, but to abolish the set limit of 2 GW in general – in this case, the capacity would be enough for the majority of the market participants.
“Partition in itself is a big mistake. Common sense should prevail – Litgrid should come out and say that everything is fine with our grids. If they would clearly say that there is no problem to accept 2, 3, 4 GW of solar <...> There is no need to make a problem out of it, there is no need to make any divisions”, said the interviewer.
123RF.com photo/Solar modules, associative illustration
Currently, Lithuania has about 250 MW of solar energy capacity.
A. Radavičius also said that he does not understand whether the new VERT proposal will change the existing rules or supplement them.
“The project stipulates that the rules will be applied not only after they come into force, but also to all projects submitted before they come into force. This is legal nonsense, because the decisions are not valid retroactively”, commented the interviewer.
The head of Rene Group adds that waiting only brings losses to the company – it has already paid deposits and is paying interest for several months, but it cannot move forward until there is a final decision on real bandwidths.
123RF.com photo/Solar energy
At the same time, he added that it is offered around the clock the principle would destroy the entire business model, and the costs of subordination would not decrease.
“I can’t say how much it costs to hook up because it’s a trade secret, but I can say it’s a number with seven zeros.” If we connect a lower power, the connection costs will not decrease for us, because the conditions will be exactly the same as those issued by Litgrid. <...> This will have very serious consequences – legal and political,” he said.
The legal way cannot be ruled out
VERT is waiting for corrections of the offer from market participants until October 3.
Their institution should definitely wait. Interviewed entrepreneurs said that such an offer does not satisfy the companies at all.
R.Sklepovičius said that he does not want to predict whether VERT will consider the proposals of the company and other market participants, but if the decision to proportionally reduce the planned capacity to 2 GW is implemented, the possibility of going the legal route is not ruled out.
In this case, the process may take even longer and delay the development of solar energy in Lithuania.
Comment by Irmantas Gelūnas/BNS photo/VERT chairman Renato Pociaus to the media
“It will depend on the outcome – if it ends, in our opinion and in the opinion of the lawyers, unconsciously – of course we will apply”, said R. Sklepovičius.
“I wouldn’t want to throw around threats of lawsuits and the like, but I have no doubt – if there are attempts to cut projects and artificially delay them or stop them even longer, then such cases can definitely happen,” A. Radzevičius seconded.
Non-eligible businesses may have a capacity of around 0.5 GW
VERT’s proposal published on Thursday states that those developers who have enough of their own land and meet other requirements would be allowed to continue developing the projects.
Sufficient owned or otherwise legally managed land must be at least 1 ha in area for each megawatt of capacity, or the developer must prove that he will be able to install a power plant of the desired power and technology on a smaller area, writes the BNS news agency.
Some of the developers have already signed lease contracts for the plots before they have received building permits from the municipalities
In addition, the developer must have approval from the municipality that a solar power plant can be built on the plot, the ratio of the company’s equity to the authorized capital must be as required by law, it must not have overdue debts or prove that it has sufficient funds to cover them, that it has not started insolvency , bankruptcy, reorganization procedure, and the head of the company is not convicted.
If the developer is a natural person, he must also confirm that he has not been subject to bankruptcy proceedings, does not have an outstanding criminal record, and has the financial ability to develop solar power plants.
Currently, until it is clarified how much and to what extent commercial solar energy could be developed in Lithuania, permits are suspended.
The Minister of Energy, Dainius Kreivys, has previously said that some of the intentions to develop commercial solar projects are of a “speculative nature”, and when analyzing the possibilities of their implementation, the institutions seek transparency, reports BNS.
Pauliaus Peleckis/BNS photo/Dainius Kreivys
“We have 2 gigawatts and 4.8 gigawatts of those who want it. Among those who wish, there are also wishes of a speculative nature, and there are quite a few of them. Therefore, the regulator checks, evaluates and tries to sift the wheat from the chaff very carefully”, said D. Kreivys in the Seimas Economic Committee.
VERT agrees and says that after the regulator began to clarify the possibilities of implementing the projects, some of their developers withdrew their requests to reserve powers. In addition, it turned out that some of the developers have already signed land lease contracts without receiving municipal building permits. Others signed contracts that were only valid for a few months, which allowed them to formally meet the requirements.
According to VERT’s preliminary data, the volume of unreliable power reservations is about half a gigawatt (500 megawatts), reports BNS.
“What we see is that the developers have actually signed land lease contracts, but the municipalities do not even plan to allow the development of solar power plants, which shows that we may have a lot of applications for issuing a lot of permits, but in reality those power plants will not exist. (…) Therefore, it is very important for us to make sure that those projects can actually be implemented in the future”, – VERT chairman Renatas Pocius said in the Seimas.