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Polish power company prompts pitches for Baltic wind bids

Fri 07 Dec 2018 by David Foxwell

Polish power company prompts pitches for Baltic wind bids
PGE chief executive Henryk Baranowski said the sites it plans to develop have particularly good conditions

A state-controlled Polish energy company has launched a search for a strategic partner to develop offshore windfarms in the Baltic with a capacity of up to 2.5 GW.

The company, PGE, intends to sell up to a 50% stake in two special-purpose vehicles that will develop the windfarms while operating them with the partner on a joint venture basis.

PGE intends that the first electricity from offshore windfarms will be delivered in 2025.

The company has invited more than a dozen potential business partners with experience in this type of project to hold talks. It said the first stage of its investment in offshore wind envisages constructing 1.5-GW of offshore windfarms in an area covered by a concession held by Elektrownia Wiatrowa Baltica-2 and 1.045 GW in an area controlled by Elektrownia Wiatrowa Baltica-3.

“Offshore windfarms constitute one of PGE’s strategic development options after 2020,” said the company. “The undertaking is currently at the stage where the requisite environmental permits are being secured, wind conditions are being surveyed and work on power offtake and other technical activities are also under-way. Preparations for preliminary geotechnical surveys are being progressed.”

PGE chief executive Henryk Baranowski said “Wind measurements in the Baltic Sea in the area of the planned investment have been ongoing since January 2018. So far, the results confirm very good wind conditions. Estimated wind speeds at our locations could exceed 9 m/s.”

Construction of offshore windfarms is in line with Poland’s Energy Policy 2040, which was recently sent out for consultation. The policy highlighted offshore wind as a key tool that can enable Poland to meet targets for renewable energy.

PGE has begun diversifying away from thermal generation in order to reduce CO2 emissions. It calculated that each 1 GW of offshore wind capacity will reduce CO2 emissions by 4M tonnes a year, that is, approximately 100M tonnes over the 25-year lifetime of a typical offshore windfarm.

Poland’s energy and electricity markets are undergoing major changes. As costs fall in the offshore wind industry, so it is becoming price-competitive with more carbon-intensive forms of energy that have long dominated in the country.

The Polish Government recently announced ambitious plans to develop 8 GW of offshore wind by 2035. It came as Poland opened a 1-GW onshore wind auction on 5 November.

Independent analysts have argued that PGE should accelerate its plans to diversify away from coal and into renewable energy such as offshore wind.

Analysis by experts at the Institute for Energy Economics and Financial Analysis suggested that ongoing investment in and dependence on coal put it at risk of rising European carbon prices and dependence on Poland’s new capacity market.

In May 2018,  Reuters reported that PGE could not fund nuclear projects it had been looking at and was instead looking at offshore wind energy, where costs have fallen steeply.

“PGE cannot afford offshore wind and nuclear. The decision was taken to go for offshore,” a source told Reuters. A government source also said that PGE would focus on offshore wind.

 

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