The report contains comprehensive and up-to-date information on this part of the RES sector, prepared in a friendly, bilingual (Polish-English) format.
The study was prepared by experts from the Polish Wind Energy Association (PSEW), the team of the consulting firm TPA Poland/ Baker Tilly TPA and the law firm DWF.
“The wind power market is subject to frequent and dynamic changes, and investors here face risks and circumstances unknown in other industries. However, recent months have also brought many positive developments. The energy crisis in Europe has sharply increased demand for renewable energy and has resulted in a recalibration of strategic plans for the future development of the generation mix, also in Poland. The offshore wind energy sector is expected to launch the first energy deliveries from Polish farms in the Baltic Sea in as little as three years, and onshore wind energy has finally seen the liberalization of the so-called 10H rule in favor of a 700-meter distance standard. After 7 years of a practical deadlock, the industry can now complete projects that are covered by zoning plans and meet the new distance criteria, and develop new projects based on the most modern and efficient turbines,” said Dr. Wojciech Sztuba, Managing Partner at TPA Poland and originator of the report.
In this year’s 10th edition of the report, the authors discuss in detail the current legal and business environment and development prospects for onshore and offshore wind energy. This year’s special focus, on the other hand, was dedicated to cPPA private contracts, due to their growing role in the market. In the future, cPPAs will replace the expiring auction contract market in the role of acc revenue stream hedge, which is an important factor in project financing and development of the RES sector as a whole.
Wind farms are the future
The experience of the energy crisis is not the only reason why the accelerated development of wind energy in Poland is necessary. The main and long-term reason is the need to embark on the path of energy transition and decarbonization while ensuring competitive electricity prices for the Polish economy. Renewable energy sources, including wind farms, are the future, but also mean safety, as they are energy generation technologies incomparably more resilient to a number of external threats, especially geopolitical ones.
“Onshore and offshore wind power is also an extremely modern, efficient and long-term engine for the entire economy. Multiplier effects in the form of local supply chains, Polish entrepreneurs joining global supply chains for the sector, as well as professional development opportunities for thousands of employees in the field of cutting-edge technology create value that cannot be overestimated from the point of view of the economy and society. The beneficial effects of the sector’s development will be passed on to future generations – also long after the major generating facilities have been built,” commented Krzysztof Horodko, Managing Partner, Baker Tilly TPA.
Legal changes must also take place with the energy transformation in mind
In order for the wind power sector to have a chance for true growth, changes are required, including those in the law. In the offshore sector, we can already speak of significant, consistent and effective regulatory support for its seamless development. The onshore sector saw the groundbreaking replacement of the 10h rule, in effect since 2016, with a distance standard of 700 meters.
The authors of the report emphasize that onshore wind energy, despite its huge economic advantage over other power generation technologies, has not escaped further threats in recent times. The Act of October 27, 2022 on emergency measures to limit electricity prices and support certain consumers in 2023 introduced solutions to deprive some energy producers of the profits they may have made as a result of the high energy prices recorded since 2022 in Poland and Europe. However, RES producers selling energy covered by auction contracts were to some extent excluded from the regulation.
With a fixed and, in principle, competitive auctioned price for a 15-year supply period, they do not participate in the benefits of price increases on the free market. Unfortunately, the lawmakers failed to recognize that a similar situation is faced by producers who have built their plants based on cPPAs. Despite just as low and also fixed energy sale prices, or equivalent revenues from the settlement of virtual contracts, onshore wind energy producers selling under the cPPA are subject to the restrictions of the that law until the end of 2023.
For this reason, the special focus in this year’s report was devoted specifically to cPPAs. Although they do not have a long history in Poland, they are developing very dynamically. With strong and sustained demand for non-carbon energy on the part if industry, cPPAs are assured of funding the next gigawatts of capacity that will be developed at a rapid pace, especially in sectors such as onshore wind and PV. They are an excellent alternative to the expiring auction support and, with stabilization and a slight improvement in the legal standards governing their operation, can effectively help achieve Poland’s transformation goals more quickly.
In the report, the authors also discuss:
- important aspects of the Polish onshore and offshore wind energy market,
- status of the two subsectors and predictions for their future development,
- details of the investment process and key legal, tax and business issues, including investment barriers.
Enjoy the reading. The report consists of nearly 250 pages of sound, up-to-date and comprehensive knowledge about the wind energy market in Poland and Europe. It has been prepared in a bilingual Polish-English format.
