The situation on the market is alarming to customers, who are anxious about the starting heating season. Electricity prices rise at an alarming pace, which means that subsequent increases in electricity bills are unavoidable. Fees are expected to increase by at least 20%. This is caused, among others, by disturbances to the coal and natural gas markets, as well as increasing CO2 emission allowance prices. The rescue may come from faster energy transition and creation of conditions for the development of onshore and offshore winds — a source of clean and inexpensive electricity.
Throughout Europe, electricity prices are rising rapidly. In Poland, in September the average price of a megawatt-hour at the Polish Power Exchange reached 465.70 PLN/MWh, compared to 383.42 PLN/MWh in August. Overall, the price increased by 77% since January, when it amounted to 262.81 PLN/MWh. In accordance with analyses, Polish citizens should be patient, for the trend may be remain apparent in the next months. This is caused by increasingly expensive fossil fuels, such as (imported) gas and coal, as well as carbon dioxide emission allowances (which have to be purchased to produce electricity from coal and gas), and unexploited renewable energy potential, including the least expensive wind sources.
More RES mean less expensive electricity
The situation on the energy market requires acceleration of energy transition and creation of the best development conditions for zero-emission and renewable energy sources. This in particular includes onshore and offshore wind farms, which in the recent years became the least expensive electricity source in Poland. Elimination of barriers for construction of new wind farms may help to stop increases in energy prices in the future. Currently, the key obstacle is the so-called Distance Act, which awaits amendment for a year now. The changes proposed in the governmental amendment are to liberalise the so-called 10 H principle introduced in 2016, i.e. a regulation whereby the distance between a wind turbine and development or protected areas is to be as high as 2 km. This strict regulation brought development of new onshore wind farms projects to a complete halt, what is both irrational and expensive from the point of view of the Polish economy and electricity customers. Without the Sejm adopting the amendment proposed by the government, allowing for the construction of new wind farms in compliance with the local communities’ acceptance principle, there will be no inexpensive electricity from wind.
Without liberalisation of the 10 H principle this year Poland, our customers and the economy will face serious issues. Uncontrolled price increases may be stopped only by construction of new onshore wind capacity. Otherwise the consequences may be grim in terms of increases in electricity prices, whose production is related to high CO2 emission allowance prices. A year ago the price was at the level of EUR 20 per tonne of CO2 — now this is more than EUR 60, says Janusz Gajowiecki, President of the Polish Wind Energy Association.
Without liberalisation of the 10 H principle this year Poland, our customers and the economy will face serious issues. Uncontrolled price increases may be stopped only by construction of new onshore wind capacity. Otherwise the consequences may be grim in terms of increases in electricity prices, whose production is related to high CO2 emission allowance prices. A year ago the price was at the level of EUR 20 per tonne of CO2 — now this is more than EUR 60, says Janusz Gajowiecki, President of the Polish Wind Energy Association.PV and wind twice as cheaper as coal
Today, the price of electricity produced from RES installations such as wind farms is more than two times lower than in case of conventional power plants using coal or gas. This is the best remedy for high electricity bills. For example, the last, very windy days demonstrated how wind can cause lower electricity prices. Exceptionally high output from wind farms between 21 and 23 September immediately caused a drop on electricity prices — in two days the basic price decreased from 505.32 PLN/MWh to 380.52 PLN/MWh.
When the last record was set, onshore wind satisfied one fourth of the national electricity demand, what demonstrates their increasing role in the Poland’s energy mix. Unfortunately, the renewable energy sector does not exploit its potential. No new wind farm may be built without changes to the law. Investments under construction today are projects launched before the introduction of the 10 H principle. There were almost no new wind investments in Poland after the effective date of the Act, Janusz Gajowiecki, President of the Polish Wind Energy Association added.
The planned amendment to the Act may unblock onshore wind potential all over the country, resulting in 6–12.5 GW of new capacity by 2030, depending on the development scenario used. Investment expenditures would reach PLN 30–62 billion within a decade. New capacity would also have a substantial contribution to GDP — its cumulated growth is estimated at PLN 70–130 billion by 2030. Moreover, this is an opportunity for new jobs, the number of which, depending on scenario, may increase by 50 to as much as 97 thousand over the next decade. Annual CO2 emissions could decrease by 42% in 2030 compared to 2020.
Systematic growth of wind capacity would furthermore contribute to the stable development of the national supply chain for the wind energy sector. This would give the Polish economy an opportunity to rebuild its potential in that respect, which collapsed in 2017–2018 due to the 10 H regulations. The need for a fundamental change of approach to wind energy in Poland is increasingly often communicated by representatives of business, responsible for modernisation of the Polish energy sector. In accordance with Instrat, adoption of the amendment to the Act and liberalisation of the 10 H principle will increase the area available for wind energy investments 25-fold – from the current 0.28 percent to 7.08 percent of the country’s area. Experts have no doubt that further development of wind energy will help to stop soaring electricity prices. Ministry of Development announced that, statistically, 1 GW of wind capacity decreases the cost of 1 MWh by up to PLN 30.
Exploiting wind energy potential would allow for a much less expensive and much more effective energy transition in Poland. However, the actual scenario for the future depends on the role stipulated for onshore wind in the state’s energy policy and the pace at which the policy will be included in legislative works of the government and parliament.
Recently, European Commission presented proposals of measures related to the increase in electricity prices. The Commission emphasized that wind and solar was the least expensive source of electricity during the pandemic. For the first time the Commission clearly announced that in 2022 it will communicate guidelines on streamlining the permitting process for renewable energies. Additionally, it called Member States to facilitate conclusion of renewable PPAs and streamline renewable energy auctions.