Market was expecting these regulations for years to finally access the public forest lands, so let’s look into details of amendments to Reg.No.350 approved on 13.06.2023:
- Auction – the only form to grant rights for research of the public land and construction of the wind farms;
- The auctions may be organised as (1) regular – by announcing on a yearly basis, before 1st of February (for year 2023 – within 30 days as of date of regulation); or (2) ad hoc – by announcing auction 4 month in advance. First auction planned within 6 months;
- The winner of the auction who has proposed the highest price for development of the wind park on particular land plot shall be granted rights to construct on the public land;
- Three wind farm development phases are planned:
- Research phase (lasts until design and engineering research is approved but not exceeding 5 years), annual fee – 500 EUR/MW;
- Construction phase (lasts until start of operation but not exceeding 4 years), annually indexed fee, currently set at 3400 EUR/MW;
- Exploitation phase (limited with total allowed term for lease of public land as provided by law), fee for use of the territory is set at 4% of the turnover, but not less that the fee for construction phase;
- Until the end of the exploitation period the energy company shall dismantle the wind park unless it appears as economically justified for the land owner to take it over. Nothing is specified about compensations in such scenario.
- More detailed provisions shall be set in the auction rules.
However, there are specific provisions in the transitional rules for specific companies, namely:
- the holder of the state forest lands (Latvijas valsts meži) shall NOT include 50 000ha of the forest land in auctions until end of 2023;
- a company, whose shares belong to a public person or one or several capital entities of a public person, can submit a request to grant rights for development of wind parks on state forest land;
- the Ministry of Agriculture evaluates the application and prepares information on the amount of the one-time payment, taking into account the assessment of the market price by an independent appraiser.
- the owner of state forest land shall grant rights for such applicant, if the Cabinet decides on this.
Therefore, two different procedures to place a wind farm on public lands are introduced dependent on the applicant – regular provisions with auction for all the applicants (including public companies) and specific provisions limited in time only for the public companies where instead of an auction shall be used evaluations. The various public discussions have raised grounded market participants’ objections about necessity to have two different procedures and a list of questions about the place and quality of the lands that shall be provided to the public companies. Moreover in the Latvian market only private developers have experience in project development whereas the public companies don’t.
Also we should not forget that the approved rules are also about the municipal lands that now shall have market based fees for use of the land aimed to promote wind farm developments in the regions.
