War in Ukraine should encourage the world to accelerate transition to renewable energy — said UN Secretary General. Germany announced that by 2030 the share of wind or solar energy should reach 80 percent. A similar position is adopted by subsequent European countries, which declare more consistency in implementation of climate policy and development of RES generation. In Poland, energy security and reduction of our dependence on fossil fuels from Russia must too form the pillar of energy transition. To maintain competitiveness on the global market, industry in Poland needs inexpensive and clean electricity. Large industrial facilities have the opportunity to purchase electricity from renewable energy sources under corporate PPAs. The product is the market’s response to demand for green electricity for businesses that want to hedge electricity prices. Last year the cPPA market in Europe grew by an impressive 55%.
 

Running away from imports

Today, public discussion is strongly dominated by a position that rapid, well-managed transition to renewable energy sources is the only way to energy security and new jobs the world needs. For years we have been highly dependent on import — half of all consumed energy resources come from abroad.

Currently we are importing approximately 80% of consumed gas, almost 100% of oil, and even as much as 20% of coal consumed in Poland[1]. In coal imports, Russia is the dominating supplier, with 75% market share in 2020. The war it started clearly demonstrates that RES investments are the best way to ensure energy independence.

 “War in Ukraine has changed the path towards European energy transition forever. Now we see how fragile fossil-based, import-based energy sector is. Today, accelerating the transition and enabling new RES investments may prove a necessity not only to protect the climate or as an opportunity for the economy, but also politically, to ensure own, independent energy supply. The priority is one — development of renewable energy. The more RES in the system, the lower coal and gas consumption,”, said Janusz Gajowiecki, President of the Polish Wind Energy Association and RE-Source Poland Hub Foundation.

“Renewable energy sources are the key answer to transition challenges. Therefore, we have to unblock wind energy in Poland to increase domestic electricity production. This will enable diversification of energy supply and decrease high electricity bills — today, wind energy is more than three times less expensive than coal. We have to assume that the war across our border will entail substantial instability on the resources market. With gas in particular, we will have to expect very high prices for a long time,” said Szymon Kowalski, Vice-President of RE-Source Poland Hub Foundation.

Towards renewable energy sources

Onshore wind development increases the pace of the Polish energy transition and brings a number of benefits for the economy. A report by the Polish Wind Energy Association[2] demonstrates that, in the best development scenario, new wind farms will guarantee PLN 70–133 billion of GDP growth, PLN 490–935 million of additional revenue foe local governments, approximately PLN 80 billion of orders for products and services in the supply chain and from 51 to 97 thousand new jobs in the 2030 perspective.

Currently, transition of businesses to green energy is one of key trends. It is caused by the strive to reduce the costs of electricity as well as increased expectations of customers and business partners, who expect supply chain with minimum carbon footprint. In their transition to green energy, corporations are often guided by ambitious targets in their strategies, the need for additional value or competitive pressure. Rapid increase in interest in clean, green energy among businesses apparent in the recent years is common across the entire Europe.

cPPA boom in Europe

One of the most rapidly developing market models enabling customers to switch to green electricity uses so-called corporate power purchase agreements (cPPAs).

“With such an agreement, a consumer may demonstrate using RES electricity. On the other hand, electricity producer secures sales for the term of the agreement. This increases financial stability of RES projects, enabling financing of wind or PV farms,” said Paweł Wróbel, Director of RE-Source Poland Hub.

In Europe key buyers of green electricity through cPPAs include energy-intensive businesses, IT sector and transport — primarily railways.

“We have been following the cPPA boom in Europe for several years. In 2021, the market grew by 55% compared to 2020. The total volume of all cPPAs signed by 2020 was 12 GW, and reached 18.5 GW at the end of 2021. Approxiamtely 2/3 of the figure is wind energy,” Paweł Wróbel adds.

cPPA development in Poland

Poland is one of 14 European countries with active cPPAs. Leaders include Spain (4.2 GW), Sweden (2.8 GW), Norway (2.1 GW), Germany (1.8 GW), UK (1.6 GW), Finland (1.5 GW) and the Netherlands (1.5 GW). With a total volume of 393 MW — more than half from wind, the rest from PV — Poland ranks 11.

“cPPA development depends on streamlined development of new investments — supply — for currently the demand for green electricity is higher than the capacity to deliver it. Other important factors that will promote the cPPA model include appropriate regulations and financial support for the agreements. It is crucial that the agreements receive a systemic support by guarantees, and that schemes enabling valuation thereof with indices are developed,” lists Szymon Kowalski, Vice-President of RE-Source Poland Hub.

Promotion fo the cPPA model, analysis of market development opportunities, identification of measures to be taken and networking of cPPA business partners is carried out by the RE-Source platform, established in 2018 in Brussels. RE-Source Poland is one of several HUBs performing the above tasks at a national level.

Re-Source Poland Conference in Warsaw, to be held already on 29 March 2022, will be an event fully dedicated to cPPAs. Join us! Electricity customers will have an opportunity to learn how to secure the supply of electricity by purchasing it directly from RES producers and, during B2B sessions, know the offer of their potential suppliers. Event details: http://resourcepoland.pl/event/,

[1] Eurostat data on the basis of EU Energy in figures, statistical pocketbook 2021.

[2] “National onshore wind supply chain”: http://psew.pl/wp-content/uploads/2022/02/DIAGNOZA_E_BOOK-PL.pdf.