Poland Offshore Wind Technology
The Polish government is working on legislation allowing the construction of wind farms off of Poland’s coastline. The Polish deputy minister of climate and government plenipotentiary for renewable energy sources recently indicated that construction of offshore wind farms, with a capacity of approximately 10 GW, will be possible in Poland. The legislation supporting electricity generation through offshore wind farms should be passed into law in the middle of 2020.
The Polish government unveiled its first draft of a long-awaited offshore wind act, outlining more than 10GW of offshore wind capacity projects that are expected to be awarded by 2028. Wind farm developers will look to secure power purchase agreements, similar to the UK’s contract for difference (CfD) model in two phases. The first phase is expected to be completed by the end of 2020, and projects with a capacity totaling 4.6GW will be selected by Poland’s energy regulators. In phase 2, which will take place between 2023 and 2028, projects with 5.5GW of additional capacity will be competitively auctioned in at least three tenders. According to the the Polish Wind Energy Association (PSEW), offshore wind project developers will be eligible for government premium payments for 25 years, if they are awarded a tender. Other renewable projects are only eligible for 15-year contracts.
Companies controlled by the Polish State Treasury will have a dominant share in the development of offshore wind farms. Investments in offshore wind farms are carried out by companies such as the Polish Energy Group, PGE By 2030, PGE and their Danish partner, Ørsted intend to erect wind farms with 2.5 GW on the Baltic Sea. Another state group, PKN Orlen, also has concessions for the construction of a 1.2 GW offshore wind farm and is in the process of searching for a business partner to carry out the planned projects.
A draft of Poland’s Energy Policy, PEP, prepared by the Minister of State Assets indicates that by 2040, installations at sea will be responsible for the largest amount of electricity generated from renewable sources. PEP 2040 predicts that 55.2 TWh of energy will be produced from wind only.
An additional impulse for offshore wind farms will be Dolna Odra Power Plant, the largest gas power plant in Poland, with 1400MW capacity. The Dolna Odra facility will be completed in 2023, and will utilize fuel from the Baltic LNG terminal. Gas power plants are characterized by high flexibility, and Dolna Odra is the only large electric power system source designed to stabilize the variabilities of energy production in northwestern Poland, the region with the largest number of wind farms currently and planned for the future.
The Polish government’s upcoming decision will significantly alter the landscape of of the Polish energy market. Currently Poland’s energy production is 80% coal fueled and places Poland in a very difficult position when negotiating its commitments to achieve the EU Green Deals measures by 2050. For more information please contact our office in Warsaw, Poland.