Green energy investors target Poland as it weans itself off coal
WARSAW/BRUSSELS (Reuters) – Poland’s biggest power producer PGE confirmed a deal on Wednesday to develop offshore wind farms with Denmark’s Orsted in another sign the country reliant on coal is fast becoming a hot destination for renewable energy investors.
Poland was the only EU member not to commit to climate neutrality by 2050 when the bloc set the target in 2019 and the government has long courted political support from interests in coal, which provides more than 70% of the country’s power.
But pressure from Brussels, rising carbon prices and a grassroots push for climate action have driven the government to back investments in renewables projects over the past two years, chiefly in offshore wind and solar power.
Poland has a long coastline but no offshore wind farms as yet. Just across the Baltic Sea, Denmark produces enough electricity from wind to meet half its annual demand and Orsted has become the world’s biggest developer of offshore farms.
“Poland is a very attractive, maybe one of the most attractive, emerging offshore markets in Europe,” said Holger Matthiesen, head of offshore development in Scandinavia, Poland and the Baltic states at German utility RWE Renewables.
It plans to seek Polish government support this year for a 350 megawatt (MW) offshore wind farm, on top of the 2.5 gigawatts (GW) PGE and Orsted intend to start building in the Baltic Sea in two developments.
“Growth in offshore, commitment to reducing coal, a process of consolidation among utilities and the liberalisation of the market makes us look at Poland now with much more appetite than we did five or six years ago,” a source at one international energy company said.
TIPPING POINT
Spain’s Iberdrola, Europe’s second-biggest utility by market value and a leader in renewables, bought a stake in wind farm company Sea Wind in December to develop Polish offshore projects.
Swedish state-owned utility Vattenfall and Polish chemicals company Synthos, meanwhile, signed a memorandum of understanding in October to explore offshore wind.
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Wind industry & Government commit to boosting offshore wind and jobs in Poland
On 15 September 2021 Poland signed its first Offshore Wind Sector Deal. This Government-industry collaboration aims to establish a leading offshore wind industry in Poland. Under the Sector Deal the industry commits to the creation of up to 60,000 direct and indirect jobs in Poland’s wind industry by 2040. The Government in turn reinforces Poland’s ambitions to accelerate the energy transition with renewables by launching a new auction system and carrying out competitive auctions for offshore wind from 2025.
The new Offshore Wind Sector Deal was signed by 200 representatives from the Polish Government, investors, the wind industry, local Governments and higher education in Poland. It acknowledges wind energy as a “key component of Poland’s economic transformation”, creating jobs and bringing wider benefits to the country’s economy.
“This Sector Deal for offshore wind in Poland is a great example of Government-industry collaboration on renewables. And of how effective it is when Governments make clear commitments to expand wind energy. With visibility on future volumes and market growth, the wind industry commits to deliver investments and jobs”, says Giles Dickson, WindEurope CEO.
Offshore wind is essential for the just transition from fossil fuels to renewable energies in Poland. The Sector Deal aims to maximise domestic production, development and installation activities. It aims for a share of at least 20-30% of total value in the preparatory, installation and operation stage of offshore wind projects to be produced in Poland by 2025. This share should then increase to at least 45% by 2030 and at least 50% after 2030. For the employment in Poland’s offshore wind sector this would mean a total of 30,000 direct and indirect jobs by 2030 and a total of 60,000 direct and indirect jobs by 2040 respectively.
Today Poland does not have any offshore wind parks. But the country plans to build 5.9 GW of offshore wind by the end of 2030 and 11 GW by the end of 2040. To make this rapid expansion possible the Government pledges to launch a new auction system and to set aside €22.5bn for offshore wind development over the coming two decades. The Ministry for Climate is tasked to publish the details of the auction design and start the first auction in 2025.
The Sector Deal also aims to upgrade Poland’s port infrastructure to make it fit for the construction and maintenance of offshore wind farms. The installation terminal in the Port of Gdynia will be operational by 2025, additional terminals will be prepared between 2026-2030. The ports of Łeba and Ustka will serve as service ports for offshore wind operations from 2026 onwards.
With regards to human resources and training, the Sector Deal pledges to ensure the training and education of 20,000 and 40,000 offshore wind workers by 2030 and 2040 respectively. A special focus lies on the reskilling and upskilling of former coal miners.
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Source: https://windeurope.org/newsroom/news/poland-adopts-historic-offshore-wind-act/
The Polish Parliament unanimously adopted Poland’s first Offshore Wind Act today paving the way for Poland to develop offshore wind in the Baltic Sea. The Act will enter into force on 1 February after it’s been signed by the President of Poland.
The Act sets out the rules and regulations that will apply to the development of offshore wind. And it defines the volumes Poland intends to develop. In a first phase the regulator will allocate (by 30 June 2021) financial support for 5.9 GW of capacity. Beyond this they will then award Contracts for Difference (CfD) in competitive auctions.
Poland’s targets for offshore wind are ambitious. They have none today. But by 2030 they aim to have installed 3.8 GW. They then want 10 GW by 2040 and 28 GW by 2050. This would make Poland the biggest market for offshore wind in the Baltic. Their first offshore turbines could be operating by 2025.
“This is historic stuff from Poland. They’ve firmly committed to offshore wind, and lots of it. They’ll be the leading player on offshore wind in the Baltic Sea. And it makes complete sense for them. Offshore wind is cheap, and they’ve great potential for it. They already have a strong offshore wind supply chain around their ports and shipyards. Now they can expect lots more jobs, growth and investments. They wind industry looks forward to helping make it all happen.” says Giles Dickson, CEO of WindEurope.
Poland’s electricity mix is still heavily based on fossil fuels. In 2019 they produced over 70% of their electricity from coal and 10% from gas or oil. Wind is the biggest source of renewable energy in Poland with 10% of total electricity production.
Poland now wants to become a low-emission economy. Their National Energy and Climate Plan (NECP) singled out offshore wind as a key technology. It’ll help diversify their power mix and significantly reduce their CO2 emissions.
The Offshore Wind Act will boost the Polish economy and will help drive their post-COVID recovery. The Polish Wind Energy Association (PSEW) estimates that large-scale offshore wind will unlock €29bn of investments, creating tens of thousands of new jobs and strong industrial clusters.
Coastal regions in the north of the country are already active in the wind supply chain, making e.g. foundations, cranes and installation & service vessels. The Act is a big boost for them. And Poland’s ports such as Szczecin, Gdańsk and Gdynia will transform to ‘renewable hubs’ for storage, assembly, transportation and maintenance of offshore wind turbines.
“The Offshore Wind Act is not only a short-term injection of recovery money. It will create lasting tax revenues for Poland’s federal budget and local municipalities. The offshore wind industry will create tens of thousands of new jobs in Poland and build a strong maritime industry around the sector which will help to revitalise Polish shipyards and ports”, says Kamila Tarnacka, Vice President of the Polish Wind Energy Association PSEW.
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Fight the power: why climate activists are suing Europe’s biggest coal plant
It is Europe’s biggest coal plant, with annual CO2 emissions roughly equivalent to those of the whole of New Zealand – but the future of the Bełchatów power station in central Poland has been called into question after a global environmental charity announced a legal challenge designed to eliminate the facility’s carbon footprint by 2035.
ClientEarth, an international NGO that seeks to protect the environment through legal action, announced on Thursday that it was taking PGE GiEK, a subsidiary of Polish state-owned power giant Polska Grupa Energetyczna, to court over emissions at the Bełchatów plant, which is notorious for its burning of highly polluting lignite, or brown coal.
The lawsuit, filed at the district court in the central city of Łódź, demands that the plant’s operators stop burning lignite, or take measures to eliminate the plant’s carbon emissions, by 2035 at the latest.
Marcin Stoczkiewicz, the head of central and eastern Europe at ClientEarth, said: “The Bełchatów power plant has provided Poland with vital power for decades, but times have changed. The largest emitters, like Bełchatów, must shoulder their share of responsibility for the climate crisis. Without a rapid coal phase-out, the climate fight will be futile.”
The Bełchatów plant burns approximately 45m tonnes of coal each year, and has emitted approximately 1bn tonnes of CO2 over the course of its lifetime.
ClientEarth is also challenging the operation of two neighbouring opencast mines, arguing that lignite mining causes significant disturbance to groundwater levels and releases toxic heavy metals into surrounding water and soil.
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