Poland Defies Europe’s Offshore Wind Malaise With First Auction

Article content(Bloomberg) — Poland will on Wednesday kickstart its first offshore wind auction, pressing ahead with plans to ramp up green energy production amid a fast-approaching exit from coal and tender cancellations elsewhere in Europe.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe nation has emerged as an outlier on the continent in developing offshore wind in recent years. Poland awarded early projects outside the auction procedure and continued development with the help of foreign partners such as Orsted AS and Northland Power Inc. Some tenders in Europe have been canceled due to spiraling costs, supply chain bottlenecks and limited visibility over future revenues.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentProjects in Poland are currently competing to win so-called contracts-for-difference, which provide a top up when wholesale power prices dip below the agreed contract level. Polenergia SA with Norway’s Equinor SA, as well as state utilities PGE SA and Orlen SA are set to bid with a total of about 3.5 gigawatts.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article content“We are now at the best moment in a decade,” Janusz Gajowiecki, head of the Polish Wind Energy Association PSEW, told Bloomberg News. “Poland may become the most important offshore hub in the Baltic Sea region.”Article contentIf the country keeps the pace, there is “a real chance” of building 18 gigawatts in offshore capacity by 2040 and even more than 30 gigawatts after 2040, he added. Article contentCost WoesArticle contentThe industry group estimates that the offshore wind push may spur 869 billion zloty ($242 billion) in investments, create a completely new driver of the Polish economy and eventually halve power prices.Article contentThe maximum prices in the inaugural auction were set in a range of 486 zloty to 512 zloty per megawatt hour, above current market levels. Final prices at similar tenders for other renewables have historically been “significantly” below the maximum, PSEW’s Gajowiecki said.Article contentArticle contentThe issue of costs for end consumers and the future competitiveness of the local economy lies at the heart of deliberations about the energy mix among policymakers in Poland.Article contentLast month, the head of the national power grid urged a pause in offshore investments in favor of focusing on cheaper onshore wind expansion as excessive spending may cause an increase in energy bills. Article contentPSEW dismissed those concerns, arguing that offshore costs have been steadily falling and will continue to drop.Article content“Facts are clear: offshore reduces energy prices for the entire market,” Gajowiecki said, noting that production is stable and matches high demand periods. Article contentBullish OutlookArticle contentPoland is one of the most attractive markets thanks to “generous auction price caps and long 25-year CfDs that reduce revenue risk, making it easier for developers to secure financing,” according to Bloomberg New Energy Finance’s 2H Offshore Wind Market Outlook.Article contentBNEF has cut its global cumulative offshore wind capacity forecast to 2035 by 19%, yet raised its estimate for Poland by 8% citing a “flurry of permits” ahead of the auction.Article content“We had previously assumed that the auction would be unsuccessful but given this project progress we now expect the 2025 auction to proceed as planned,” BNEF said in the Dec. 16 report.Article contentThe Polish regulator is expected to announce auction results by year-end.Article content“The success of the first offshore wind auction would send a strong signal to the world,” according to PSEW’s chairman.Article contentTrending The Federal Reserve’s rate cut was a clear signal to investors Investor Expect 'dramatically higher' oil prices in 2026, says Eric Nuttall Oil & Gas Bank of Canada wants to make stablecoins 'good money,' Macklem says Finance Garry Marr: How raiding your TFSA before the end of year could save you thousands Personal Finance McKinsey plots thousands of layoffs in consulting slowdown Work Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.

The Federal Reserve’s rate cut was a clear signal to investors Investor Expect 'dramatically higher' oil prices in 2026, says Eric Nuttall Oil & Gas Bank of Canada wants to make stablecoins 'good money,' Macklem says Finance Garry Marr: How raiding your TFSA before the end of year could save you thousands Personal Finance McKinsey plots thousands of layoffs in consulting slowdown Work