Almost a year after the publication of the draft act on promotion of electricity generation in offshore wind farms (“Offshore Wind Act”), the Senate has passed the bill without amendments. This concludes the legislative procedure in the Polish Parliament. The law will now be submitted for the President’s signature and will come into force in late January or early February.
“It is a historical moment and a law with key importance not only for our energy sector, predominantly coal-based, but for the entire Polish economy. The regulations contained in the so-called Offshore Wind Act, laying a foundation for development of wind farms in the Polish part of the Baltic Sea, will support Poland’s transition towards a low-carbon economy over the coming decades. Launching investment projects worth approximately PLN 130 billion will help mitigate the negative consequences of the slowdown caused by the pandemic. It will not only be a direct cash injection for the economy, but also tax revenues for the central budget and for municipalities, tens of thousands of new jobs and an opportunity to build a strong industry around the sector, including revival of Polish shipyards and ports,” Kamila Tarnacka, Vice-President of the Polish Wind Energy Association (PWEA), said.
The Offshore Wind Act regulates the allocation of state aid to investors interested in construction of offshore wind farms in the Polish exclusive economic zone in the Baltic Sea. In the initial phase of market development, with support envisaged for 5.9 GW of capacity, support will be granted by administrative decisions of the President of the Energy Regulatory Office (ERO). The first wind farms developed under this stage could start generating electricity as early as 2025. The possibility to join this scheme will end on 30 June 2021. In subsequent years the support will be awarded under competitive auctions for wind farms with a total capacity of 5 GW, organized according to the schedule specified in the legislation.
The Offshore Wind Act’s entry into force does not end the efforts for power from the Baltic Sea to be generated in mid-2020s. Apart from the act itself, it is necessary for relevant executive regulations to be issued by responsible ministers. These include: a regulation on the maximum price for electricity generated in offshore wind farms, regulations specifying technical requirements for offshore installations, a regulation on detailed scope of analyses and plans to meet marine safety requirements, on the scope of analyses related to impact assessment of installations on national defence systems, as well as principles for possible purchase of the offshore grid connections by the transmission system operator.
“These regulation should be treated as a priority. In the optimal scenario they should enter into force in February, so that investors can take them into account in their application for support to the ERO,” Kamila Tarnacka recommends.
The submission of applications should end no later than on 31 March 2021, and the ERO’s decision awarding the support should be issued by the end of the first half of 2021. Next steps will include notification of individual state aid to the European Commission and the final verification of support level by the ERO.
It is also necessary for the Ministry of Infrastructure to issue a regulation on the assessment of applications submitted in the location decision procedure, which will be of key importance in the pending procedures to obtain seabed permits (so-called “PSZW”) for new projects. These procedures (currently suspended) should be resumed after the adoption of the maritime spatial plan for Polish maritime areas, expected by the end of March 2021.
By creating regulatory framework for offshore wind, Poland will join the implementation of the European Green Deal, opening the possibilities to obtain funding for transformation under the facilities made available by the EU.
“The power generation potential of the Baltic Sea is enormous, and the conditions in the Polish waters are some of the best for development of such projects. We should use this opportunity. Ultimately it will be possible to connect as much as 28 GW of offshore wind capacity to the Polish grid and thus become a regional leader,” Kamila Tarnacka added.
The power from the Baltic Sea will not generate a significant burden for the energy consumers. The Offshore Wind Act contains a number of mechanisms protecting them from excessive energy price increases resulting from the development of this novel RES technology in the Polish market.