Opening the Offshore Wind Poland conference, which took place on November 18 and 19 in Warsaw, the Minister of Climate and Environment, Paulina Hennig-Kloska, said that this year's sector meeting is “groundbreaking” and unique. In fact – the first offshore turbines as part of the Baltic Power farm created jointly by Orlen and Northland Power have already been built (and our editorial team had the opportunity to see them up close), the remaining projects of PGE Baltica from Ørsted and Polenergia from Equinorem will soon enter the implementation phase.
— We are at the point where we count the foundations, towers and windmills that are already standing. History is happening before our eyes – said the minister. In a few weeks, an auction will be held to select further projects with support under bilateral contracts for difference (i.e. guaranteed revenues at an agreed level – the mechanism is considered a necessary condition for the investment's success).
Read also: The offshore industry is calmer before the December auction. The new law is intended to reduce risks
The rest of the text below the video
The industry welcomes the bill
As for this event, the offshore industry recently won the race against time – in October it was possible to adopt an act, signed by the president in November, which improves conditions for auction participants, including by creating a mechanism for an additional intervention auction or introducing conditional prequalification for projects at the final stage of obtaining an environmental decision. The president of the Polish Wind Energy Association, Janusz Gajowiecki, called the preparation of the act “an incredible feat”, for which he thanked the Ministry of Climate and Environment (responsible for preparing the document) and parliamentarians.
– Only 21 ignorant MPs voted against – commented Minister Hennig-Kloska. The act does not meet all the expectations of market players, which was also expressed during the conference – primarily in terms of valorizing support amounts based on the NBP's inflation targets, and not the average annual inflation level, which is what the industry was counting on. Despite this controversial point, in which the legislator wanted to limit future costs incurred by energy consumers, satisfaction with the adoption of the regulations prevailed.
How much will we earn on offshore windmills?
Offshore wind farm projects in the Baltic Sea have long been presented as another in a series of large investments of strategic and developmental importance for the entire Polish economy, which will benefit not only the investors themselves, but also a number of their contractors from various industries and services, employees gaining attractive employment and the state budget. “Local content”, “repolonization” or “industrial policy” are constantly recurring slogans in the context of offshore, which are increasingly often mentioned not only by representatives of the industry, but also of the administration.
Janusz Gajowiecki convinced conference participants about this type of advantages of offshore windmills. — Our offshore potential may reach up to 33 GW by 2050. This is the scale of the construction and implementation of three CPK projects, together with the railway. We are talking about numbers that move us at least two places in the ranking of the richest countries in the world, he said.
What numbers are these? According to Gajowiecki, the value of the investment in 9.9 GW offshore (within the first phase, 5.9 GW of power is to be added to the system by 2030, so there are also volumes from the second phase, which will already be covered by the auction support system) is PLN 260 billion. The added value to the economy would be in this case PLN 54.3 billion and PLN 15.5 billion budget revenues (of which PLN 5.3 billion from corporate income tax and PLN 4.2 billion from PIT and social security contributions).
In the variant of building a total of 18 GW of power in offshore wind farms, the investments would cost PLN 474 billionand would bring benefits to the economy PLN 123 billion added value. The budget would benefit from this PLN 29.1 billion — including PLN 9.6 billion from CIT and PLN 8.7 billion from PIT and contributions. The most “superpower” option of fully exploiting the offshore potential of the Polish part of the Baltic Sea, i.e. building 33 GW of offshore wind farms, is already PLN 869 billion spent on investments at PLN 284 billion added value i PLN 55.3 billion budget revenues (PLN 17.6 billion from CIT and PLN 18 billion from PIT and contributions).
Less gas, more deterrence
The course of the conference showed the multiple meanings of offshore wind energy, to which subsequent threads and aspects are assigned. Perhaps the most important of them is broadly understood security. As Małgosia Bartosik, deputy head of Wind Europe, said, a few years ago the offshore industry was mainly talked about in the context of finding ways to effectively fight the climate crisis, but today the focus has moved towards energy independence and strengthening economic competitiveness. Offshore windmills are intended to increase independence from the import of fossil fuels – meanwhile, in Bartosik's opinion, after abandoning gas imports from Russia, Europe is at risk of another dead end in the form of dependence on suppliers such as the USA or Saudi Arabia.
Read also: The EU is moving away from gas from Russia. What about imports from the USA? “It's the lesser evil”
The next issue is military security – offshore windmills are indicated as critical infrastructure, particularly sensitive in times of Russia's increasingly aggressive provocations, also directly in the Baltic Sea. Agata Staniewska-Bolesta from Ørsted talked about the company's cooperation with the ministries responsible for defense in all countries where projects are implemented, including Poland. Julian Wieczorkiewicz from NATO Headquarters drew attention to the increased activity of the Alliance's forces in the Baltic Sea – NATO remains in constant contact with the operators of underwater infrastructure, collects information on suspicious movements and phenomena, shortens the response time to incidents and increases deterrence capabilities.
— We deploy probes and drones in the Baltic Sea, which provide live information then aggregated by AI, which allows us to respond to threats in real time, e.g. by sending aircraft. We use NATO as a forum for coordinating the forms of response by allies, as seen, for example, in the interception of ships from the Russian shadow fleet. Deterrence works; the number of incidents has decreased, he reported. Windmills can also be objects on which monitoring devices are installed.
“Countries with the most available energy win”
Who will benefit from offshore energy? Expanding on this topic, Małgosia Bartosik stated that offshore wind energy can play a key role in the electrification of European industry, and energy-intensive sectors will be happy to conclude PPA agreements with farm owners for electricity supplies. States will also have room to show off and support both sides here.
— Today's prices for energy from offshore wind energy are unacceptable to the industry. The European Commission recognizes this problem and proposes concluding tripartite agreements. Governments are to act to reduce the risk of investment in offshore and industrial electrification by lowering the costs of operations so that both parties can agree on prices under PPAs. These agreements will only be effective with long-term and significant public sector action and public support approved as State aid. The Commission is working on these solutions – perhaps the first such contracts will be signed by the end of the year, Bartosik predicted.
Not only the electrifying manufacturing industry, but also the data center and artificial intelligence sectors see hope in power supply from offshore. Deputy Minister of Digital Affairs Dariusz Standerski presented himself as a representative of this part of the demand side at the conference, talking about private and public investments in this sector, e.g. in state-co-financed AI factories in Krakow and Poznań.
— We know well from the history of every technological revolution that it is the countries with the most available energy that win. It's the same today. Investments in data centers, supercomputers and computing power show a specific share of energy use – today it is globally 1-2 percent. entire use of electricity, and by 2030 this share will increase globally by 165%. In Poland, over the next five years, the demand for energy in new sectors will increase by up to 250%. – he listed.
“We are in a better position”
One of the discussion panels during the conference was entitled Poland as “the hottest offshore wind market in Europe“. The situation in our country is expected to stand out positively from others, where investors have recently experienced several stumbles that have an impact on the assessment of the condition of the entire industry. In addition to the problems in the USA, whose current authorities are openly hostile towards offshore wind energy, we are talking primarily about failed auctions in Germany, Denmark and the Netherlands. According to the president of PGE Baltica, Bartosz Fedurek, their failure is “very good news” for Poland, as it will allow us to redirect production potential and resources to our field (which will be all the more beneficial since bottlenecks in supply chains have been a long-diagnosed problem in the offshore industry).
Read also: Offshore windmills are costing Poland more and more. Experts answer what's next
The events in Western Europe were considered by the discussion participants to be a correction resulting from a different stage of development or the lack of support instruments such as contracts for difference. — These markets are in a completely different place than ours – they started much earlier, and projects have been operating there for many years. We cannot compare ourselves with them; we are in a completely different, better situation. We learn from the experiences of other markets. Since the development of offshore in Poland is later, we can use more mature technologies. Today we are installing not 3, but 15 MW turbines. We have been waiting for offshore wind energy for a very long time, but today we have come to the perfect moment for its practical development – summed up Kacper Kostrzewa, managing director in Poland at Ocean Winds, the company implementing the BC-Wind farm project.
