Polish energy company ORLEN Group announced on Wednesday (11 October) that it has reached a Final Investment Decision (FID) to build Baltic Power, Poland’s first offshore wind farm.
The project, which is estimated to provide electricity to around 1.5 million households, is being developed in partnership with Canadian power company Northland Power. The project is now ready to begin construction as it has contracted all the key components and secured the needed financing.
“We stand at a pivotal point, both for the ORLEN Group and the broader energy sector in Poland. Our commitment has led us to embark on the most significant project to develop renewable energy in our country and the entire region. Notably, the Baltic Power offshore wind farm represents one of just two such projects in Europe to progress to the implementation phase over the past three years. Despite the formidable challenges posed by the pandemic, supply chain disruptions, and military conflict across our eastern border, we have adhered to the ambitious timeline we set from the outset. Within three years, we will launch the first offshore wind farm in Poland, but our aspiration is to use our experience and newly established infrastructure to implement further projects. A case in point is the ongoing construction of an installation terminal for offshore wind farms in Świnoujście, which will serve not only the Baltic Power project but will also facilitate the pipeline of five more wind farms slated by the ORLEN Group, with a combined capacity of 5.2 GW,” said Daniel Obajtek, CEO and President of ORLEN’s Management Board.
Foundation laying is scheduled to commence in 2024, with the farm expected to comprise 76 Vestas wind turbines with a unit capacity of 15 megawatts (MW), standing at a height of over 250 metres, by 2025. An onshore substation project is already underway, designed to evacuate the power generated at sea, ORLEN said in a press release.
The overall budget of the project is estimated at around 4.73 billion euros, encompassing capital expenditures, including insurance (totalling approximately 4.05 billion euros), as well as financing costs and an additional reserve.
The project will be financed under a “Project Finance” framework – in September, Baltic Power’s shareholders signed loan agreements for a total of about 4.4 billion euros with 25 Polish and international financial institutions. This is the largest financing obtained for a single investment in Poland’s history and one of the largest transactions of its kind in the offshore area in Europe.
“As Northland, in collaboration with our partner ORLEN, we are delighted to commence the construction phase of the Baltic Power project. Upon completion, the wind farm will supply clean energy to over 1.5 million households, marking a substantial stride towards bolstering Poland’s energy transition goals. We look forward to achieving further construction milestones in the coming months,” said Mike Crawley, President and CEO of Northland Power.
The company has also initiated the construction of Poland’s first offshore wind farm installation terminal, planned for completion in 2025.
Orlen signs an agreement for crew transfer vessels
Separately, on Monday (9 October), ORLEN Group’s LOTOS Petrobaltic signed a cooperation agreement with the Industrial Development Agency (ARP) on the construction of three units for the transfer of employees to the planned offshore wind farms.
“We take a comprehensive approach to the development of offshore wind energy. We are investing in the construction of the first Baltic Power offshore wind farm, which will be built in Polish waters of the Baltic Sea. This is the most advanced offshore wind project in Poland. Recently, we also obtained five licenses for the construction of further wind farms in the Polish Exclusive Economic Zone of the Baltic Sea. To ensure efficient servicing of these facilities, we will need specialised vessels,” said Mr Obajtek. “Through the agreement with the Industrial Development Agency, we are starting the construction of a fleet to operate offshore wind energy.”
The vessels, which are to be put into service in 2025-2026, will also be able to be used during installation works and cable laying.
As part of the agreement, a designated company from the Industrial Development Agency Capital Group will obtain offers from the shipyard for the construction of three crew transfer vessels, obtain financing, and subsequently deliver the ready-made ships and hand them over to LOTOS Petrobaltic for a bareboat charter (without a crew).