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Poland’s chance to become the leading regional player on offshore wind

Poland’s Senate has passed the Offshore Wind Act unanimously. A historic day for a country that as of today has no offshore wind capacity installed. The law will now be submitted for the President’s signature and will come into force in late January or early February.

Minister of Climate and Environment, Michał Kurtyka welcomed the adoption of the Act as a sign that the regulation supporting the construction of offshore wind farms was very much needed and long-awaited.

The Act is based, among other pillars, on a two-phase support system, improvements in administrative procedures and rules for connecting producers to the power grid.

The first wind farms in the Polish sea will appear as early as in 2024 and will be built successively until 2033. The period of operation of a single wind farm is about 25 years and throughout this period all farms will receive full support from the Polish government. According to the Energy Policy of Poland until 2040, in 20 years as much as from 8 to 11 gigawatts (GW) of offshore wind power capacity is to be installed.

“It is a historical moment and a law with key importance not only for our energy sector, predominantly coal-based but for the entire Polish economy,” said Kamila Tarnacka, Vice-President of the Polish Wind Energy Association (PWEA).

Indeed, the share of coal and lignite in electricity generation still amounts to almost 80 per cent, with the draft Energy Policy of Poland to 2040, aiming to reduce it to 60 per cent by 2030.

For Mrs Tarnacka, the regulations contained in the Offshore Wind Act will support Poland’s transition towards a low-carbon economy over the coming decades and such investment projects worth approximately 130 billion złoty (28.5 billion euros) will also help mitigate the negative consequences of the slowdown caused by the pandemic.

“It will not only be a direct cash injection for the economy, but also tax revenues for the central budget and for municipalities, tens of thousands of new jobs and an opportunity to build a strong industry around the sector, including a revival of Polish shipyards and ports,” she underlined. “The power generation potential of the Baltic Sea is enormous and the conditions in the Polish waters are some of the best for development of such projects. We should use this opportunity. Ultimately it will be possible to connect as much as 28 GW of offshore wind capacity to the Polish grid and thus become a regional leader.”

“This is historic stuff from Poland. They’ve firmly committed to offshore wind and lots of it. They’ll be the leading player on offshore wind in the Baltic Sea,” agreed Giles Dickson, CEO of WindEurope. “And it makes complete sense for them. Offshore wind is cheap and they have great potential for it. They already have a strong offshore wind supply chain around their ports and shipyards. Now they can expect lots more jobs, growth and investments. The wind industry looks forward to helping make it all happen.”

Also, Brussels-based think tank Central Europe Energy Partners (CEEP) concluded that the Baltic Sea is the most suitable area to develop offshore wind farms, in its latest Policy Paper on the prospects for offshore wind development in Central Europe: how to boost offshore energy in the Baltic, Black and Adriatic seas. Indeed, in the Baltic Sea alone, the potential for offshore wind power will be substantial, reaching up to 93 GW.

And Polish companies have already started working in this direction. At the beginning of June, power utility company Enea announced its interest in offshore wind farms in the Baltic Sea with a possible total capacity of up to 3.3 GW. Furthermore, Poland’s largest power producing company PGE Capital Group is engaged in the development of offshore wind farms, up to 2.5 GW of installed capacity by the end of 2030.

Last November, also Poland’s oil refiner and petrol retailer PKN ORLEN commenced onshore geological surveys along the connection route for its planned offshore wind farm. Finally, at the beginning of January, also energy holding company Tauron signed a share purchase agreement and an investment agreement that will lead to the construction of an offshore wind farm, following the Tauron Green Turn update of strategic directions. 

However, the Offshore Wind Act’s entry into force does not end the efforts for power from the Baltic Sea to be generated in the mid-2020s. Apart from the act itself, PWEA reminded that it is necessary for relevant executive regulations to be issued by responsible ministers, including a regulation on the maximum price for electricity generated in offshore wind farms, regulations specifying technical requirements for offshore installations and principles for possible purchase of the offshore grid connections by the transmission system operator.

“These regulations should be treated as a priority,” highlighted Mrs Tarnacka. “In the optimal scenario, they should enter into force in February, so that investors can take them into account in their application for support to the ERO.”

By creating a regulatory framework for offshore wind, Poland will join the implementation of the European Green Deal, opening the possibilities to obtain funding for transformation under the facilities made available by the European Union, thus becoming really a leading player in the region.

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