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Polish government moves forward with plans for 10.9GW of offshore wind development

December 02, 2020

S&P Global Market Intelligence ($):

The Polish government approved late Nov. 27 a draft Offshore Wind Act to award about 32 billion zlotys in support for the construction of 10.9 GW of capacity in the Baltic Sea.

The ministry of climate and environment, which drafted the legislation, said the first offshore projects in the Polish zone of the Baltic Sea would be ready in 2024. The bill has been sent to parliament for debate and voting, with optimists saying it might be passed as early as January 2021.

“Offshore wind energy is an important step towards building emission-free energy. We have a chance to become a leader in the development of offshore farms in the Baltic Sea with installed capacity potential estimated in the WindEurope report at 28 GW in 2050,” Michał Kurtyka, Poland’s climate minister, said in a statement.

During a first stage, 5.9 GW of capacity would receive support in the form of contracts for difference, or CfDs, on a first-come, first-served basis from the energy regulator, URE. In the second stage, auctions would be held in 2025 and 2027 for 2.5 GW each. CfDs would be valid for 25 years, compared to 15 years for other renewable energy installations, and projects must start generating electricity within 72 months.

Developers must submit applications for CfDs in the first stage to URE by the end of June 2021 and will be responsible for financing and constructing the connection from their projects to the onshore grid. The grid operator, PSE, will have the right of first refusal to purchase the connection in the event of a potential sale of the wind farm.

Projects likely to be eligible for support in the first stage are those being developed by Poland’s largest privately-owned utility, Polenergia SA, and its partner, Norway’s Equinor ASA, as well as by state companies PGE Polska Grupa Energetyczna SA, which is in advanced talks with Denmark’s Ørsted A/S, and Polski Koncern Naftowy Orlen SA, which is yet to announce a partner. RWE AG also has an eligible project after entering the market in 2019.

[Adam Easton]

More ($): Poland approves draft offshore wind law, paving way for 10.9 GW in Baltic Sea

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