Danpower agrees to put off amicable deal’s implementation

The agreement, among other things, restores a feed-in tariff for Danpower’s power generation plant in Kaunas.

“By making another concession to the state, which failed to meet its prior commitments to foreign investors, we do not lose hope that we will be able to work in Lithuania with a long-term renewable energy strategy, clear and equal rules for everyone, the rule of law and keeping the word,” Danpower CFO Burhard Vogel said.

Danpower informed the Energy Ministry it agrees to move the agreed deadline of Aug. 1 until which the state has to restore the feed-in tariff for the Kaunas biofuel plant, awarded in 2013 but cancelled in 2015.

According to the company, if this tariff is not restored, Danpower will get all rights to the feed-in tariff for the Vilnius biofuel power plant project it renounced during the negotiations. The tariff was later endorsed by a court in a final and binding ruling.

The Supreme Administrative Court of Lithuania has already endorsed the amicable agreement, reached in May with the Energy Ministry, in two other cases, but the court did not approve an amicable agreement with the State Energy Inspectorate, which is part of the wider agreement.

The court postponed its decision, citing “significant public interest” as the reason. The next hearing is due in October.

Under the agreement, the German-Lithuanian capital company Danpower Baltic will be allowed to produce electricity at its Kaunas combined heat and power plant, which is already operating, for 12 years at a tariff of 9.7 euro cents per kilowatt-hour under a 5-megawatt feed-in quota that the company won at an auction in 2013.

The tariff would be covered from the public service obligations fund, which would cost all consumers up to 1.5 million euros per year, or around 18 million euros over the 12 years.

Danpower Baltic has already invested almost 100 million euros in Lithuania and owns six biofuel boiler houses in Kaunas, Vilnius and Joniskis and a cogeneration plant in Kaunas.