Lithuania’s flagship offshore wind project has become significantly more expensive and less profitable than planned, raising doubts about whether the 700-megawatt Baltic Sea wind farm can be completed by 2030, the National Audit Office said Monday.
According to the state auditor, the project, developed by state-owned Ignitis Group, has seen its projected cost jump 27% since 2023 to 2.8 billion euros due to rising construction and equipment prices. At the same time, its expected return on investment has dropped 40%.
“Under current market conditions, the project is too risky and may not generate enough revenue to cover its cost,” the National Audit Office said. State Auditor General Irena Segalovičienė added that delays and growing implementation risks are clouding the project’s future despite its strategic importance for Lithuania’s energy independence.
Rising costs, falling returns
Auditors said Ignitis Renewables – Ignitis Group’s subsidiary developing the project – had already spent 60.3 million euros between 2023 and 2025 but failed to sufficiently account for market shifts. The cost escalation and reduced profitability reflect unrealistic earlier assumptions, they said.
A key concern is that neither Ignitis Renewables nor the project company, Offshore Wind Farm 1, has secured long-term electricity off-take agreements even though less than 18 months remain until construction is scheduled to begin. Without those contracts and with offshore wind component prices rising, the audit warns that obtaining financing could become difficult.
The audit also found that development work has slowed significantly after Ignitis Group decided this year to cut spending to a minimum. Around 60% of planned work has been postponed, yet the official target start date for electricity generation remains February 12, 2030 – a timeline auditors say is increasingly at risk.
Inefficient spending, legal compliance issues
Auditors criticised Ignitis Renewables for inefficient use of 4 million euros allocated for seabed studies. Of that, 2.9 million euros was spent on bringing research vessels to Lithuania, but only 3% of the work was completed before the rest was deferred to 2027. The company will have to pay again for vessel mobilisation, the audit said.
The project also violated the Renewable Energy Law and tender rules because Ignitis Renewables – not Offshore Wind Farm 1, the entity that received the development permit – is implementing and financing the project. The law requires the permitted company to carry out the development.
Additionally, international offshore wind developer Ocean Winds, which jointly won the tender with Ignitis Renewables, has exited the project, leaving Ignitis to develop it alone.
Recommendations and broader concerns
The National Audit Office recommended transferring all project assets, development activities and obligations to Offshore Wind Farm 1, setting realistic timelines and revising contracts to ensure seabed studies are completed on time. It also urged the energy regulator, VERT, to require more detailed documentation in future offshore wind tenders.
The parliamentary Audit Committee and the Committee on Energy and Sustainable Development requested the state audit amid mounting concerns about the project’s viability.
Ignitis Group previously acknowledged that delays in large-scale green hydrogen projects across Europe and fewer opportunities to secure long-term power purchase agreements could hinder financing for the nearly 3-billion-euro wind farm. As a result, the project’s commercial launch, currently scheduled for 2030, may be delayed by up to five years.
Ignitis Renewables won the tender in 2023 alongside Ocean Winds, which has since withdrawn, leaving Ignitis Renewables with full control of the project.
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