Without doubt, wind energy becomes the answer to both climate and economic crisis. However, investments in new wind farms face substantial challenges related to the energy industry. Wind provides an opportunity both for a profitable business and decreased electricity production costs, hence lower prices. More information about wind energy development in Poland can be found in the “Wind energy in Poland 4.0” report, launched during the 2022 PWEA Conference in Serock. 

DOWNLOAD REPORT “Wind energy in Poland 4.0”

The most striking effect of inefficient energy sector are continuously rising electricity prices. Price increase affects not only the industry, but also many households. In April the average price of a megawatt-hour at the Polish Power Exchange reached 466.60 PLN/MWh, almost 100% higher than the average price a year ago. 

“The reason for continuously increasing costs lies in insufficient share of renewable energy sources in the energy mix of our country. Poland continues to be dependent on fossil fuels, responsible for 70 to 75% of produced energy. Today, the most substantial hindrance to the increase in wind energy capacity is the 10 h rule, which precludes construction of new installations. Elimination of this barrier could help to slow down the rise in electricity prices,” said Janusz Gajowiecki, President of the Polish Wind Energy Association.

The latest report by PWEA, TPA Poland/Baker Tilly TPA and DWF, entitled “Wind energy in Poland 4.0”, discusses the current issues within the onshore wind energy sector, its legal and business determinants and outlook for further development, and presents the opinion of RES industry experts.

“The slowdown in the onshore wind sector apparent in the recent years is reflected in the results of the auctions for the sale of electricity from renewable sources held to date. Last year’s auctions did not result in the activation of large wind farms in the system, last noted in 2019, or an equilibrium between wind and PV, apparent in 2020. What we see is unprecedented expansion and — for the first time — substantial domination of PV over wind in the auction bundle’s capacity structure. The trend results from the so-called Distance Act, the key barrier whose elimination may provide the opportunity for wind projects to return to growth path,” said Katarzyna Szwed-Lipińska, Director, RES Department, Energy Regulatory Office. 

As emphasized by the authors of the “Wind energy in Poland 4.0” report, an alternative, increasingly popular method of investing in onshore wind is the purchase of a project under the M&A procedure. It brings many benefits, including no need to engage in development, market entry opportunities for foreign investors not knowledgeable in the local market or the possibility to secure cash flows through PPAs/cPPAs or participation in auctions. There were several dozen such transactions in the market within the last 6 years.

“Foreign investors often choose an investment model based on the purchase of shares in an SPV at a more or less advanced stage of wind farm development. Such a formula mitigates the risk related to project failure, typical for early investment development or planning phases. In the report, we present many interesting parameters of transactions held in Poland within the last few years, including related to prices per 1 MW of project capacity,” concludes dr Wojciech Sztuba, Managing Partners, TPA Poland/Baker Tilly TPA.

This year’s report includes a special part dedicated to offshore wind energy. Poland may become the leader in offshore wind development in the Baltic Sea region and in Europe — we only need to properly estimate and subsequently harness the potential of the Baltic Sea. The 11 GW currently assumed is being increased by the government in the Energy Policy of Poland until 2040. The industry estimates the potential of the Polish Baltic Sea areas to be much higher, reaching 28 GW. Efficient planning and full use of the potential of local suppliers may entail as much as 65% of local content. This is a plain opportunity for a growth impulse for the entire economy. 

“There is a reason to dedicate the addendum to the report to offshore wind. A good wind blows for the sector, and we are already preparing to settle the competition for subsequent sites in the Polish Baltic Sea — the so-called Phase II Round 2. The interest of Polish and foreign investors, both from the sector and financial investors, is only increasing,” Karol Lasocki, Partner, Head of Renewables, DWF, summarised RES investments in Poland. 

The increasing share of RES in the Polish energy mix is key to global transition to clean energy and establishment of a green alternative to fossil fuels. Understanding the role of renewables, in particular wind energy, we welcome you to read the “Wind energy in Poland 4.0” report. Key challenges and opportunities faced by the Polish wind energy industry, both onshore and offshore, were broadly discussed during the annual PWEA Conference, an event attracting representatives of the entire industry in the heart of green Serock.