Competitive advantage of production plants in Poland diminish as electricity prices increase. Global companies in the country seek stable and inexpensive power sources to maintain their market position. Renewable energy sources, including wind, are the answer.

“Industry was the first to suffer from the rapid increase in wholesale electricity prices caused by the rises on the coal and CO2 emission allowance markets. Therefore, it seeks alternatives. Some companies want to independently build wind and solar farms, whereas want to other purchase green electricity in long-term contracts. In both cases they may rely that wind energy will permanently rather than on an ad-hoc basis decrease their electricity bills,” explained Janusz Gajowiecki, President of the Polish Wind Energy Association (PWEA).

The price of electricity from new wind farms competitive to market prices may be relied on when the construction of the capacity contracted in the November 2018 auction is completed (average below 200 PLN/MWh). Long-term contracts concluded directly with such farms may become increasingly popular in the future.

The first long-term contract of this type was concluded by the Mercedes-Benz engine plant in Jaworze with VSB Energie Odnawialne. Although its commercial terms and conditions are confidential, experts emphasize the opportunity to decrease bills by several PLN per megawatt-hour. A substantial number of similar contracts is expected in the future, however their conclusion may be delayed due ti the act that is to stop the increase in electricity prices in 2019.

Entrepreneurs seek methods to secure electricity prices in the long term, in particular where it constitutes a substantial part of the company’s total costs. Predictable electricity prices from new wind farms at a level below market prices enable them not only to maintain their position among the European and global competition, but also to limit their environmental impact.

Some companies already announced their ambitious plans to limit environmental impact. This aspect is becoming increasingly important for manufacturers of goods and service providers due to increasing environmental awareness of their clients as well as commitments made during the Paris climate summit (COP21) and maintained during the recent Katowice summit (COP24).

Strategies of banks, which are limiting financing for projects and companies encumbered with “carbon footprint”, as well as the first attempts of EU institutions to mark goods with respect to the type of energy used to produce them are also important.

“In accordance with the global IKEA strategy, which we broadly discussed among others during COP24, our ambition is to reduce greenhouse gas emission by 2030 by more than we are emitting in our entire value chain. We are also striving to achieve 100% use of renewable energy in our operations and by our direct suppliers. In Poland IKEA carbon footprint is entirely neutralised. Wind turbines owned by IKEA produce more electricity than we consume in Poland for our own needs,” said Mariusz Podgórski, Energy and Climate Manager, IKEA Retail Polska.

The voice of particular companies is stronger due to the RE100 group, an association of similar companies, which includes brands widely recognised around the globe, such as Google, Apple, Microsoft, Nestle, Unilever or IKEA, as well as many financial institutions, such as HSBC, Goldman Sachs, Aviva or Swiss Re.

“We see that the costs of electricity production from renewable sources decrease every year. Therefore, it’s normal that the majority of RE100 companies quote the decreases justifying their transition to 100% RES power. The industry and corporations are thus sending a clear message to the energy market that they support RES development. Interestingly, an increasing number of RE100 members also select the stability of guaranteed prices through long-term corporate green energy PPAs. We see that such contracts exhibit a substantial potential also in Poland,” said Aleksandra Mirowicz, RE100 Policy and Projects Manager, The Climate Group.

RE100 is a global initiative of companies managed by The Climate Group in cooperation with CDP. Its founding members include the IKEA Group. RE100 is an organisation of 160 international companies that committed to power their business with renewable energy in 100 percent. The total electricity demand of RE100 companies exceeds the annual electricity consumption in Poland. RE100 companies are currently operating on more than 140 markets, generating total revenue of USD 4.5 trillion. This constitutes a strong message for decision-makers and investors to boost transformation towards zero-emission economy.