PGE: Polish companies ready to race for the Baltic Sea

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Offshore wind park at daybreak. [PGE]

With the passing of the first Polish offshore wind act, plans for offshore wind development in the Baltic Sea are at hand and the construction of the very first Polish offshore wind farms will soon become a reality.

By 2030, approximately 5.9 GW will be commissioned in the Polish exclusive economic zone of the Baltic Sea. PGE Capital Group – the leader in offshore wind projects in Poland, is by then committed to deliver the 2.5 GW.

Long-awaited regulatory framework is here

The offshore wind act frames conditions of deploying offshore wind farms in the Polish zone of the Baltic Sea. The act also streamlines and simplifies necessary permitting procedures and includes provisions pertaining to establishing the local supply chain. Poland has decided to introduce a market-based scheme through two-sided contract for difference (CfD) model being the most cost-effective solution and also in line with the EU state aid principles and Renewable Energy Directive.

All this combined, according to the new Polish Energy Policy until 2040, will make a path towards 11 GW in offshore wind farms commissioned by 2040 in the Polish Baltic Sea. The entire Polish offshore program is worth around EUR 35 billion by 2040 giving a significant boost for the Polish economy in the COVID-19 recovery. Not only companies developing offshore wind farms will benefit, but also domestic industry. The Polish Wind Energy Association (PWEA) estimates that there are over 100 companies already in the chain of suppliers in sectors related to the construction and operation of offshore wind farms and at the same time the installation and operation of 6 GW in offshore wind farms will contribute to creating as many as 77,000 jobs within a decade. Needless to say offshore wind energy is envisaged to be one of the pillars of Poland’s energy transformation and has booked its place in a set of technologies to contribute to declared national RES target by 2030 thus fitting in with the EU climate policy.

PGE at the forefront of investments…

PGE Capital Group is the leader of offshore energy in Poland having projects at the significant development stage. By 2030, PGE will commission two offshore wind farms: Baltica-3 and Baltica-2 with a total capacity of approximately 2.5 GW and then 0.9 GW Baltica-1 wind farm will be put into operation. In the next step, PGE intends to implement further offshore wind investments with a total capacity of approximately 3 GW. By 2040, PGE’s offshore portfolio will account to even 6.5 GW.

Evident positive impacts not only for local communities but also for greenhouse gas emission reduction cannot be forgotten – the commissioning of only PGE’S three offshore wind farms will result in 11 million tons of carbon dioxide less emitted annually. At the same time, according to the poll conducted by the PWEA, offshore wind farms are the most accepted source of energy by Poles. 67% of respondents would like to use the electricity generated in offshore wind turbines right in their homes and 81% believe that the development of wind farms will have a positive impact on climate.

The most advanced PGE’s offshore wind farms (Baltica-3 and Baltica-2) will be able to annually generate enough electricity to supply even 5.4 million households. These installations will meet the latest technical standards ensuring both maximum efficiency and a marginal impact on the environment. Investments will be implemented in the Polish exclusive economic zone of the Baltic Sea in favourable locations with proved good wind conditions.

… but the competition will be fierce

Is seems no surprise that in order to overcome inevitable challenges, Polish utilities join their forces. In January 2021, three largest Polish energy companies – PGE, Enea, and Tauron – signed a letter of intent to cooperate on future offshore wind farm projects. These Polish energy companies will now act jointly in order to make the best use of the opportunity created by the development of the offshore wind energy sector.

The companies recognize the value of the offshore wind energy sector for the development of Poland’s economy and for increasing the level of Poland’s energy security. In the signed letter of intent, PGE, Enea, and Tauron expressed their will to establish strategic cooperation related to future offshore wind energy investment projects in the Polish Exclusive Economic Zone in the Baltic Sea.

The motivation for the cooperation is to achieve synergy effects when undertaking joint investment projects in the offshore area. Joint actions are also driven by a strong competition with other offshore wind entities interested in securing the right to invest in the Polish Exclusive Economic Zone in the Baltic Sea.

Although among Polish energy utilities PGE is a leader in the development of offshore wind energy in Poland having the most extensive knowledge on the implementation of such projects, the two other companies also acknowledge future offshore investments as a part of their strategies.

Worth mentioning, PGE is currently in the process of selecting an experienced industry partner for the Baltica-2 and Baltica-3 wind projects with the total capacity of 2.5 GW. The signed letter of intent between PGE, Enea and Tauron does not affect the process of acquisition of the most advanced projects intended to be developed with the industry partner.

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