Polish Minister sets offshore wind price cap

In: Windfarms
31/03/2021
The Polish Minister of Climate and Environment has set the maximum price for electricity generated in an offshore wind farm and fed into the grid in PLN per 1 MWh. The price was set at PLN 319.6 / MWh.

The maximum price originally proposed in the draft regulation, after public consultations and a consensus conference, increased from PLN 301.5 to PLN 319.6 / MWh. This price takes into account investment and operating costs for an offshore wind farm 55 km away from the coast. In addition, it takes into account the use of fixed prices for 2021, higher balancing costs, fees for the extension of the location permit (PSZW) and the property tax on land infrastructure.

The maximum price specified in the regulation for electricity generated in an offshore wind farm and fed into the grid in PLN per 1 MWh is the basis for the settlement of the right to cover the negative balance in phase I of the support system, i.e. the price that may be awarded by decision of the President of the Regulatory Office Energy for the first projects implemented in the Polish exclusive economic zone of the Baltic Sea.

Poland is progressing the development of offshore wind under the Offshore Act, which regulates the method of obtaining public support by investors interested in building offshore wind farms in the Polish exclusive economic zone of the Baltic Sea. Public aid will be granted by way of an administrative decision by the President of the Energy Regulatory Office (ERO).

Poland has opted to proceed via a two-stage Contract for Difference (CfD) model. similar to that used in the UK. The Offshore Wind Act provides up to 5.9 GW allocated by CfD in 2021 and a 2.5 GW CfD auction in 2025 and 2027. Projects will have a 7 year award to generation deadline, meaning 10.9 GW generating power by 2034.

The submission of applications should be completed no later today (March 31, 2021), and the decision of the ERO granting the right to support should be issued by the end of the first half of 2021. Next, individual notifications of the granted state aid will be made to the European Commission and the final verification of the level of support by the ERO.

The government plans to launch further support phases in 2025 and 2027, both 2.5 GW, leading to 11 GW by 2040.


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