Baltic offshore wind role in Poland’s energy transition

Kamila Pronińska
Professor
University of Warsaw
Poland

Poland’s energy transition policy has been characterized by series of failures for years. Lack of ambitions, lack of political will, even lack of imagination in relation to the security implications of climate change – they all have conditioned a visionless long-term energy and climate policy of the successive governments. One could explain this attitude by acknowledging that there were more urgent energy security challenges, which Polish authorities had to deal with. This was true to some extent. In the framework of EU’s energy policy Poland insisted on giving higher priority to security of supply and focused on such issues as improving the gas system interconnectivity and reducing import dependencies on Russian supplier. Regarding climate and energy goals Poland’s actions has been rather slow and passive. Of course, for the coal-dependent economy, meeting the CO₂ reduction goals and achieving climate neutrality by 2050 requires complete transformation of the energy sector. This is a fundamental challenge.

In this critical decade to address climate insecurity, Poland’s government still sends inconsistent signals about its energy and climate policy. It first did not pledge to EU’s goal of carbon neutrality by 2050, while a few months later formally endorsed the goal in the 2040 energy policy. During last COP26 in Glasgow Polish government signed declaration on coal-phase out but at the same time declared that the phase out will take place in late 2040s. Deeper analysis of sectoral policies especially regarding renewable energy, including onshore wind farms, photovoltaics or prosumerism can be also confusing. In this context Poland’s offshore wind policy seems to be an exceptional case.

Baltic offshore wind power is considered to be one of the most promising renewable energy options for energy transition in Poland. It is a rapidly maturing technology and a scalable industry with huge potential for expansion. Similarly, to the EU’s offshore wind strategy, Poland recognizes that the vast untapped wind power potential of Baltic Sea will play an important role in achieving CO₂ emission reduction targets by 2030 and climate neutrality by 2050. The offshore wind potential in Poland’s Exclusive Economic Zone (EEZ) is estimated at a capacity of 12 GW and net energy production of 43.2 TWh up to 50 TWh by 2050. From the investor’s perspective, it is important that in comparison to other Baltic locations, the South Baltic (EEZ of Germany and Poland) proves to be the most attractive in terms of LCOE. Yet, it is also clear that public policy regulations will be crucial to investment decisions and the wider infrastructural shifts, which could lead to the transformative changes in Poland’s energy supply chain.

So far, Poland has adopted several acts, which provide a legal basis for the development of support mechanisms dedicated to offshore wind energy. They include Energy Policy up to 2040), Offshore Wind Act from 17 December 2020—the first Polish law on offshore wind energy which came into force on 18 February 2021, finally the Maritime Spatial Plan for Polish Sea Areas adopted on 14 April 2021, which indicates the boundaries of the zones in the Polish Baltic for permits for the construction of wind farms and the use of artificial islands, structures, devices, and laying seabed cables. The designed and applied support measures imply high public intervention. Among others they encompass economic regulation tools, such as Contracts for Difference and auctions, grants and loans, local content provisions. It’s been also decided to give the leading role to the biggest Polish energy companies and their Western corporate partners. Thus far the most advanced and the biggest projects belong to three joint ventures: PGE Baltica (PL)/ Ørsted (DK), Polenergia (Pl)/Equinor (NOR), PKN Orlen (PL) /Northland (CAN). Together the offshore wind projects will add up to 5,9 GW of installed capacity to the energy system by 2030.

Today the Baltic Sea is a region of great geostrategic value for energy security. It provides access to oil and gas supplies enabling Poland a wider diversification of suppliers, import routes, and transportation technologies. The critical energy infrastructures such as oil and LNG terminals, storage facilities, refineries, etc., are located in the region. With every new offshore wind installation, the strategic importance of Baltic Sea for both energy transition and energy security of Poland will be increasing even more.  The corporative data show that between 2018–2032 energy companies in Poland plan to decommission approximately 11.8 GW. Hard coal and lignite plants will account for approximately 93.6% of these operations. To what extent offshore wind energy can replace fossil capacities is still under discussion. Yet, it is becoming clear that unlike other sectoral policies of Poland, offshore wind sector has received significant government support. Taking into consideration the applied public policy tools, the planned projects in South Baltic, and the potential of scalability, we can expect that offshore wind energy will become central in the process of energy transition in Poland.

The additional important factor of offshore wind power development in Poland will be international cooperation of the Baltic states. Although the degree of offshore projects advancement varies across the region, we can observe how international cooperation becomes a supportive measure in the sector development. As a new source of clean energy, the Baltic offshore wind installations will contribute to the decarbonization of the energy sector and become an important element of critical energy infrastructure in the integrated EU market.

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