A new version of the draft act on promotion of energy generation in offshore wind farms was published on the Government Legislation Centre website. There are several modifications compared to the draft act of mid-January.
In the most recent wording of the draft Offshore Act there is an increase – from 4.6 GW to 5.9 GW – in the maximum capacity of offshore wind farms in the Baltic Sea set to receive support under a two-sided contract for difference (CfD) between the investor and the regulator. Each decision awarding state aid will be subject to notification to the European Commission.
Awarding support under this formula will be time-limited until the end of June 2021. It should be noted that the period for award of state aid under the first phase was shortened – in the January draft the first phase was planned from 2020 until the end of 2022.
As clarified in the statement of reasons to the draft, it is about the necessity for a precise distinction between the first and second phase due to EU regulations and guidelines on state aid, where the “deadline for issuance by the President of the Energy Regulatory Office of a decision awarding the right to cover the negative balance will be 30 June 2021. After that date receiving the right to cover the negative balance under a non-competitive mechanism will not be possible”.
– Allowing more projects to take part in the first phase has objective reasons. Investors, seeing the government’s involvement in the development of a stable legislative framework for the emerging offshore wind market in Poland, expedited work on their own projects – says Kamila Tarnacka, Vice-President of the Polish Wind Energy Association (PWEA).
According to PWEA’s estimates, the proposed level of 5.9 GW corresponds with the actual potential of advanced projects, i.e. those that already have or within a certain time will be able to sign a connection agreement, allowing for the support negotiation procedure to start.
– More ambitious targets set for the first phase of development of offshore wind power in Poland and the announced sector deal with the Polish government are also strong signals for companies from the supply chain. The Polish wind industry is ready to increase its manufacturing capacity in order to meet the future demand for components and services for wind farms to be built in the Baltic Sea – adds Kamila Tarnacka.
The most recent version of the draft also includes proposed solutions regarding connection of offshore wind farms to the national grid. It is envisaged that investors will be responsible for building and financing the connection between wind farms and the onshore grid. However, Polskie Sieci Elektroenergetyczne (PSE – the Polish TSO) will have the right of pre-emption in case of possible sale by the investor.
– It is an optimal solution from the point of view of the pace of work on the draft and the coordination of the offshore grid construction with the construction of the wind farm itself. It ensures that clean and cheap energy from Baltic Sea wind farms will enter the Polish grid around 2025 – says Janusz Gajowiecki, President of the Polish Wind Energy Association.
In the second phase, auctions are planned – the first in 2025 and the second two years later. Support will be available for projects with a total capacity of 2.5 GW in each of the auctions. Thus, the recent draft does not envisage auctions in 2023 and 2028, as mentioned in the January draft. This is the result of increased volumes planned for the first phase.