Senate Committees support Polish offshore. The assumed increase in capacity of offshore wind farms to be built by 2030 from 5 to 12 GW is a breakthrough towards dynamic growth of the new sector in Poland. Cooperation between business and government will be crucial for success.
Yesterday the Budget and Public Finance Committee as well as Extraordinary Committee for Climate discussed with industry experts the opportunities and threats for offshore wind farm investments. Implementation of regulations proposed by Ministry of Climate, along with industry recommendations, will constitute an impulse for all stakeholders, including the TSO, to further expand the network in the northern part of the country and provide customers with clean, inexpensive electricity.
In the currently processed draft amendment to the RES Act the capacity of offshore wind farms in Poland to be built by 2030 is assumed to increase from 5 GW to 12 GW. The change was proposed by Ministry of Climate and Environment to increase the share of renewable sources in domestic electricity consumption. The draft has been approved by the Sejm, and soon will be voted on by the Senate.
A new chapter for offshore in Poland
“Offshore wind is the ultimate energy goal, irrespective of the government,” Chairman of the Extraordinary Committee for Climate, Stanisław Gawłowski emphasized. Although Poland is not producing electricity from offshore wind farms yet, experts emphasize that, so far, we were able to specify ambitions offshore wind targets in Energy Policy until 2040, adopt Spatial Development Plan for Polish Maritime Areas and adopt a dedicated act promoting the production of electricity from offshore wind farms. Moreover, a total of 5.9 GW in 7 Phase I projects obtained support, and further 11 settlement procedures for Phase II projects totalling 5.8 GW were completed.
The new RES in the Baltic Sea resulted in expansion of the National Power System (by two additional substations dedicated to import of electricity from offshore wind farms) and commencement of works on installation port in Świnoujście. Moreover, the Offshore Sector Deal, signed by more than 200 entities, created a starting point for broad cooperation between administration and business.
Challenges and opportunities
Streamlining administrative procedures, in particular related to permitting, has been defined as one of the most crucial issues slowing down development of the sector.
“Exploitation of offshore wind potential as a large-scale source of electricity will contribute to increased energy independence and security of our country. However, first one has to optimise the existing processes to simplify and streamline permitting procedures, which today hinder the development of Polish offshore and preclude competition with mature European markets,” Janusz Gajowiecki, President of the Polish Wind Energy Association, emphasized.
Next to removal of administrative barriers, an important issue for dynamic offshore wind growth is the construction and modernisation of transmission infrastructure necessary to connect wind farms in the Baltic Sea. There is also the risk of limited availability of offshore wind farm construction fleet — the insufficient number of ships may become a bottleneck in the development of offshore wind farms in Poland.
Local content in the Polish offshore
Offshore wind development is an opportunity for local supply chain growth and creation of a new, innovative sector of the economy. The achievement of offshore wind potential will enable the creation and maintenance of thousands of innovative, well-paid jobs.
Equinor representative emphasized the importance of a maintenance port in Łeba. “We will build a maintenance base, which will serve wind farms built in the Baltic Sea for decades. It will employ approximately 100, creating opportunities for economic growth of the region and the local labour market.” Furthermore, the investor named key challenges faced by the sector, related to offshore wind investments. “In Poland we see risks similar to those faced by the entire global market, i.e. price pressure in the supply chain stemming from macro-economic situation, multitude of investments in the pipeline and in progress, and limited availability of suppliers, as well as regulatory risks related to interpretation of regulations in the course of various permitting procedures,” stressed Michał Kołodziejczyk from Equinor.
A representative of the Baltic Power’s project, currently the most advanced offshore wind farm project in Poland, said that key suppliers for the project have already been selected. 3 out of 12 entities are large Polish companies.
PGE, one of the leaders in Phase II settlements that obtained 5 out of 11 sites, emphasizes its intention to maximise the involvement of Polish companies in its Baltica 2 and Baltica 3 projects. The investor supports the increase of total capacity of offshore wind farms that may obtain support in the CfD formula through auctions from 5 GW to 12 GW, for this will enable construction of more offshore wind farms with higher capacity.
A thorough debate in the Senate on implementation of such large and complicated investment projects demonstrates areas that need to be optimised to enable quick and efficient construction of the first Polish wind farms in the Baltic Sea. Experiences and examples of other markets to date show that changes are necessary.