Wind power has yet again proved its price competitiveness. The lowest bid for generation of electricity from onshore wind farms in this year’s auction, in the basket for wind and PV installations above 1 MW, amounted to approx. 163 PLN/MWh. The highest bid was 233 PLN/MWh.
From among 164 bids submitted on 5 December, the Energy Regulatory Office selected 101 auction winners. As indicated in the ERO announcement, in the aforementioned auction (AZ/6/2019) PLN 16.1bn was awarded, including PLN 16.1bn for large wind power installations, which translates to over 2.2 GW in new capacity. In turn, electricity worth over PLN 129m was contracted for large PV installations.
– Such a low price level in this year’s auction highlights he cost advantage of onshore wind compared to other electricity generation technologies. Another year in a row the average price in submitted bids (208 PLN/MWh) was lower than the wholesale electricity price of 220 PLN/MWh (TGE Base). This indicates that additional megawatts installed in onshore wind farms are an effective tool reducing the costs of energy transition towards low-carbon – comments Janusz Gajowiecki, President of the Polish Wind Energy Association (PWEA).
This year’s auction strengthens yet another trend in the Polish market. As it turns out, wind power investors are increasingly willing to use market mechanisms for securing the construction of wind farms. According to the survey carried out by the PWEA, many of them decided to apply for state support only for a part of electricity generated by the planned installations. They intend to secure the rest by selling the electricity on the market or under PPA contracts.
After the auctions of 2018 and 2019 the total capacity in onshore wind installed in the Polish power system is set to exceed 9.1 GW. – This is not the end of development of the cheapest power generation technology, as auctions for 2020 have already been announced by the decision-makers. We can also see that after this year’s auction there are still many projects left in the market – adds Janusz Gajowiecki.
Only thanks to the 2.2 GW of capacity installed under the 2019 auction, annual CO2 emissions will be reduced by 7m tonnes, and the yearly electricity costs for the entire economy will decrease by over PLN 2.7 bn.
Over the 25-year operation period of wind farms, state and local budgets will receive over PLN 3.5bn in taxes, including approx. PLN 2.2bn in property tax for municipality budgets.