The IInd Offshore 2012 Conference&Exhibition organised by the Polish Wind Energy Association in cooperation with the Sustainable Development Foundation and the Polish Offshore Wind Energy Society was held on 2 – 3 October 2013. The event was attended by many distinguished experts, representatives of the industry and state as well as self-government administration interested in the development of the offshore wind energy sector. Special thanks should be offered to the Marshals of the Pomorskie and Zachodniopomorskie Provinces, who provided honorary patronage for the Conference as well as crucial substantive aid to the organisers.
Hereby we would like to present the conclusions and demands developed during the IInd Offshore Conference&Exhibition:
1. Further development of offshore wind energy projects requires development of a stable legal framework, in particular pertaining to the support scheme for this RES technology Auctions as a method for the allocation of support funds may contribute to a stable development of wind farms. However, auctions dedicated to offshore wind energy shall be separated from auctions for other RES. A “separate basket” with funds allocated to the development of offshore projects is required. Due to the initial phase of offshore wind energy development it is legitimate to apply the fixed feed-in premium or equity subsidies scheme for the first commercial large-scale offshore wind farm projects. The instruments in question would guarantee the development of the offshore energy sector under the auction scheme, enabling Poland to exploit one of the highest offshore wind potentials in the Baltic sea, stemming from its coastline length and a substantial area of the territorial waters and the exclusive economic zone. A well-designed support scheme will not only guarantee stable market development, but will also force optimisation of investment costs.
2. The government should continue to develop political and legal framework prepared to date. It already achieved success in the development of offshore energy and industry sectors – the maritime law has been amended, enabling offshore wind farm projects to apply for location permits. National and foreign investors commenced development of several dozen of offshore wind farm projects; more than 60 applications for the issuance of location decisions were filed; approximately 20 permits were issued. The budget received almost PLN 100 million for location permits for the first projects. The Polish offshore industry (shipyards in Gdynia, Gdańsk and Świnoujście) already supplies the European offshore markets, achieving more than €150 million in annual turnover. New investments in further facilities and production lines are in development. Therefore, the risk that nothing happens and ambitious targets will remain on paper only will not happen. We already may boast the effects of actions taken. However, one may also expose oneself to criticism, if due to the lack of further legislative actions the investors will abandon their projects.
3. As demonstrated by the Ernst&Young report concerning the benefits for the Polish economy and development determinants of the offshore wind energy industry in Poland, reaching 6 GW of offshore wind farm capacity in 2025 will yield almost PLN 74 billion of value added for the Polish economy, of which PLN 14.9 billion direct revenues for the public finance sector in the 2012 – 2025 period, including PLN 12.2 billion for the central budget and PLN 2.7 billion for self-governments.
4. Offshore wind energy development substantially affects the development of the shipbuilding and port industry as well as other related sectors of the economy in coastal regions. In accordance with the Offshore Energy and Industry Development Programme prepared by Foundation for Sustainable Energy and the Ernst&Young’s analysis it is possible to create 31.8 thousand new jobs in the Polish industry related to the offshore wind energy market. The production of foundations, towers and other components for offshore turbines, in particular dedicated wind farm construction vessels, already becomes the speciality of the Polish shipyards in Gdynia and Gdańsk; Szczecin and Świnoujście will join soon. The demand of the European market is estimated at more than 20 wind farm construction vessels and several dozen small and medium service and maintenance vessels (each worth several thousand to several million euro) as well as several thousand foundations and wind turbine towers (each set is approximately €1.5 million). The turnover of the Polish offshore industry on the offshore wind farm market may reach more than €700 million per year, i.e. almost €2 million per day, for the next several years. Furthermore, it is estimated that the offshore wind farm market in Poland is worth approximately PLN 80-90 billion. A single wind farm “costs” approximately PLN 15 billion. Investors may pay as much as PLN 1 billion for the issuance of offshore location decisions. Each transaction features billions in value, what is easily noticed by the media. Usually the investors include private entities or international power utilities and financing institutions, therefore the huge investment expenditures are not related to the spending of budget funds, but rather to the influx of foreign capital.
5. Specification of ambitious yet feasible political targets for offshore wind energy development is advantageous from the social, political and economic point of view. The planned investments will be implemented no sooner than in 6-9 years. This means that offshore wind is the only RES technology that will generate profits rather than costs by the year 2020. A RES support scheme generates costs upon the purchase of green certificates issued for energy produced in RES installations. The first current from a national offshore wind farm may be fed into the grid in 2020. Until that time investors will pay fees for permits and taxes, and will incur component construction costs – the components may be built by the Polish offshore industry.
6. The development of offshore wind farms in Poland to reach a reasonable level of 6-7 GW of installed capacity in 2030 does not conflict with other energy targets set by the government The example of the United Kingdom and France demonstrates that ambitious offshore wind and nuclear power development plans may be made in parallel. The location plans for the construction of nuclear power plants in Pomerania do not contradict with the connection of offshore wind farms if the north-south transmission lines are sufficiently reinforced or offshore power grid – the so-called “Baltic Bus” – is built. A higher share of offshore wind energy in the power system requires more flexibility in system management, what is possible with higher share of gas-fired generation. Therefore, there is a substantial synergy between the development of offshore energy sector and gas energy based on the national shale gas deposits. Furthermore, there is no conflict between the construction of offshore wind farms and the search for the shale gas in the Baltic sea. The projects that received decisions do not interfere with exploration license areas. Moreover, there are no technological contraindications for the exploration or even extraction of gas within offshore wind farms, for the turbines are located at a substantial distance from each other (approximately 1 km) and relatively shallow anchored (up to 40 m), whereas gas is explored at a depth below 1000 m. Furthermore, the offshore energy sector does not compete with coal-fired power plants – it will only enable gradual decrease in the Polish economy’s dependence on the increasing extraction costs from depleting coal deposits. 6-7 GW of offshore wind in the year 2030 makes for only 10-11% of power demand.
7. It will be possible to acquire EU funds from the 2014-2020 budget – the “Connecting Europe” programme – for the construction of offshore wind farms as well as offshore power grids. This may constitute an additional stream of funds for Poland. The construction of international offshore transmission grids, necessary to connect offshore wind farms, fit into the implementation of the European power system integration policy. Furthermore, it will increase energy security of the country, in particular northern Poland, by increasing transmission capacity of interconnectors, and ensure better energy balancing capacity and flows in the northern line.
8. Offshore wind energy may be used as an important argument in discussions concerning the settlement of the current EU targets in the area of the promotion of RES and the new post-2020 targets. Through the development of the offshore energy sector Poland may present a specific plan for CO2 reductions and RES use in the 2020-2050 period, advantageous for its economy. The Ernst&Young analysis demonstrates that offshore wind energy development at the assumed level will allow for avoiding approximately 40 million tonnes of CO2 emissions as well as related costs (approximately PLN 1.6 billion) by 2025.
9. Offshore wind farms do not cause social conflicts. Offshore wind farms feature much more complex and secure site selection system (involving 6 minsters, the maritime administration and REPD), therefore it will not result in social and environmental conflicts. Pursuant to statutory regulations, wind turbines cannot be located less than 22 km from the shore, hence will not have adverse impact on coastal tourism. Correctly located wind farms do not decrease fishing potential of the Polish maritime areas; potential losses stemming from exclusion of fishing areas will be reimbursed by relevant compensations paid by investors.
10. Marine environment studies carried out by investors before construction of an offshore wind farm contribute to the development of the knowledge base on the marine environment and fulfilment of the obligations in the area of marine environment monitoring laid down by the Marine Directive. The construction of offshore marine environment monitoring stations will furthermore increase meteorological security of the country through better insight in weather conditions in offshore areas.