Wind of hope for Poland’s Green Deal

by dbereza

Wind of hope for Poland’s Green Deal

by dbereza

by dbereza
By the end of 2020, regulations of key importance to wind power will enter into force, allowing for full development of its potential, both onshore and in the Baltic Sea. They will provide an opportunity for wind to become a strong pillar of the Green Deal for Poland and the country’s transformation towards a low-carbon future.

One of the regulations in question is the amendment to the Wind Turbine Act (the so-called “Distance Act”), coordinated by the Ministry of Development; its key points were presented at the 15th PWEA Conference in Serock. Another piece of legislation, supervised by the Ministry of Climate, is the act on promotion of generation of electricity in offshore wind farms (Offshore Wind Act).  Both regulations will help unleash the potential of the cheapest energy generation technology with benefits to the economy and all offtakers.

Poland cannot afford to continue blocking the increase of capacity in wind. We are at the threshold of energy transition, and its costs will be the lower, the more we invest in the cheapest renewable sourcesJanusz Gajowiecki, President of Polish Wind Energy Association (PWEA), explains.

According to estimates by Enteneo Energy Trading for PWEA, each gigawatt of additional wind power capacity in the Polish system can reduce wholesale energy prices by approx. PLN 20 per megawatt-hour.

The dynamic development of onshore and offshore wind farms will not only be a strong investment stimulus for Poland post-COVID, but will also become a guarantee of our economy’s competitiveness and our energy securityJanusz Gajowiecki explains.

Removing regulatory restrictions for onshore wind power in Poland would create a chance to ultimately build 22-24 GW in capacity, i.e. four times the current total of 6.25 GW (as of August 2020, PWEA data). After the largest auctions in history in 2018 and 2019, there is about 3.25 GW of new wind capacity under construction, but the administrative barriers make it impossible to use last-generation wind turbines.

The potential of onshore wind power will be fully unlocked by the relaxation of the so-called 10H rule under the Wind Turbine Act. Today it does not allow for wind turbines to be located at a distance smaller than 10 times the wind turbine tip height, translating into a minimum distance of 1.5-1.8 km from residential housing. In densely populated Poland this excludes about 99 percent of its territory for wind projects.

In legislation guidelines for the Wind Turbine Act amendment the Ministry of Development indicates that the so-called 10H rule will be maintained in central legislation. Exceptions could be made by municipalities under a planning procedure carried out after environmental impact assessment reports approved by the Regional Director for Environmental Protection. The new wind farms will have to be built under a local zoning plan (rather than less restrictive planning permissions), while maintaining the new strict minimum distance of 500 metres from housing.

– Assuming that investments in onshore wind farms will continuously increase in Poland, it is expected for wind capacity to reach to 35 GW in 2050, and with expected growth in PV and improved efficiency of wind turbines and PV modules it gives reasons to hope for Poland to achieve climate neutrality by 2050Kamil Wyszkowski, representative and Chairman of UN Global Compact Network Poland, and Łukasz Kolano, Executive Director of UN GCNP write in the introduction to the report entitled “Onshore wind power. Reform guidelines and legislative proposals”. The report was developed under a framework agreement with the Ministry of Development, in partnerships with PWEA and in cooperation with WindEurope.

No-one can question the fact that renewables are the most adequate source of energyHanna Uhl, Director of Low-Carbon Economy Department at the Minister of Climate, stressed during the main session. She pointed out that just transition is not about delaying the problem in time, but about developing solutions to mitigate the costs for specific groups of the society.

Hanna Uhl also mentioned that renewables are very important for the municipal and household sector, where coal phase-out is planned by 2040. The main technologies to replace coal in this sector will be PV and heat pumps. In turn, nuclear power, which is expected to appear in the Polish energy mix, will not compete with renewables, but rather complement these sources.

The Ministry of Development announced a revision of the Distance Act so that onshore wind power can develop in line with the interests of local communities. – We do not live in separation from the general public, and development should take place with public acceptance. – Local governments should also take part in the process of selection of sites for wind farmsIreneusz Zyska, Government Plenipotentiary for RES, added. Mr Zyska, who is also Deputy Minister of Climate, assessed that investments in renewables, including onshore and offshore wind power, will soon become a major driver for the Polish economy.

Launching investments in additional 12-14 GW of onshore wind capacity, with a value of PLN 70-80 billion, to reach the level of 22-24 GW (PWEA’s development scenario), will help reduce the gap in renewable energy. Due to the introduction of the 10H rule and delayed start of auctions in Poland we will have 5.7 TWh of green energy less than envisaged in the National Renewable Energy Action Plan]. Such an amount of energy could be generated by approx. 3 GW of wind capacity. We could fulfil the NREAP and get closer to Poland’s binding target of a 15% share of RES in the final energy consumption, if projects with a total of 4.1 GW (including 3.4 GW with connection agreements) were not frozen by the Distance Act.

Lost benefits also apply to Polish local governments and state budget, which lose ca. PLN 200 million per year in property and income taxes, amounting to over PLN 5 billion in the 25-year lifetime of 3.4 GW in wind farms that are not being built. There is also uncertainty in the wind industry. Although half of the value of onshore wind project remains with Polish suppliers and sub-suppliers of components and services, relaxing the regulation would increase that share to ca. 65%.

A strong base around onshore wind will be helpful when building offshore wind power in the Baltic Sea – an industry that could become one of Poland’s most profitable economic specializations, with proper energy policy in place. The foundation for this will be the trilateral agreement between the Polish government, the investors and the industry related to offshore wind power.

The first kilowatt-hour from a Baltic Sea wind farm will be sent to the Polish grid around 2025. Ultimately Poland has a chance to become a leader in installed offshore wind capacity, with a potential for 28 GW in the Baltic Sea. For now, the government’s strategic plans envisage construction of 8-10 GW by 2040, with a value of over PLN 130 billion.

In PWEA’s opinion, the 10 GW included in the government’s strategy should be just the first step in building a strong position of Polish wind in the Baltic Sea. Especially that only in the investment phase (2020-2033) offshore wind projects will add about PLN 53 billion to Polish GDP and bring PLN 16 billion in taxes. In turn, each year of operation of Baltic Sea wind farms will provide direct investments in the range of PLN 20 billion, a PLN 14 billion increase in GDP and PLN 1.3 billion in taxes.

Reaching that moment requires the first step, that is adopting the support scheme for offshore wind. Its framework, described in the Offshore Wind Act, was revealed in mid-January this year. The industry is therefore waiting for the legislative procedure to start. The final adoption of the legislation forming the basis for development of offshore wind farms before the end of 2020 is important from the point of view of keeping the schedules by the investors with most advanced projects.

The development of Polish onshore and offshore wind power sector can drive an innovative, low-carbon economy and a modern industry in the country, and it can also be a significant contribution to the European Union’s efforts to reach climate neutrality by 2050.

Will we seize this opportunity? It depends on the ambitions that we set for ourselves at the beginning of the journey.

The decisions taken today will have a strong impact on the future. That is why we need urgent and decisive actions by the government, to allow for further development of the cheapest energy generation technologyJanusz Gajowiecki adds.