Poland is a new country for Hive’s renewable energy mission. Currently, the country is lacking in green energy with a heavy reliance on coal and gas. While behind on clean energy, Poland has recently announced a new Transmission Plan that will combat issues with RES development and connection. In line with this 2023-2032 commitment, clean energy is expected to bloom.
Until 2030, the National Power System (NPS) will face huge changes. There will be a need to connect at least:
- 20+ GW of solar sources with a production potential of 21 TWh per year,
- 14+ GW of onshore wind farms with a production potential of 37 TWh per year,
- almost 11 GW of offshore wind farms with a production potential of 40 TWh per year.
Currently, Poland is behind other European countries in terms of renewable energy adoption, but the country has big goals for clean energy adoption.
Last year in Poland exactly 50% of electricity produced came from coal-fired power plants, less than 27% from lignite-fired power plants, and less than 6% from gas power plants. Renewable sources – without system hydroelectric power plants – provided less than 16%. Two-thirds of the energy from these renewables came from wind turbines, with wind alone contributing to almost 10.5% of production.
Monthly reports on the functioning of the system for the period January-December 2022 show that domestic electricity production at that time amounted to over 175 TWh, and consumption to less than 173.5 TWh. Last year, Poland was a net exporter of electricity, the surplus of exports over imports amounted to less than 1.7 TWh, while in the previous year Poland imported more energy than it exported – net imports amounted to over 0.8 TWh.
Public solar PV targets
Poland installed the third-highest amount of new solar power capacity in the European Union last year. As a result, it now has the sixth-most total installed solar capacity in the bloc.
“Poland’s solar performance has been remarkable,” writes industry body SolarPower Europe, who published the data. They show that Poland has installed 4.9 GW of solar capacity last year. That was 12% of the EU’s total and behind only Germany (8.0 GW) and Spain (7.5 GW) while ahead of the Netherlands (4.0 GW) and France (2.7 GW).
Poland’s figure for 2022 is 29% higher than the 3.8 GW it recorded last year (when it also installed the third most new capacity in the EU).
The regulation on the maximum quantities and values of electricity from RES assumes that between the years 2022-2027 there will be 9 GW of new solar capacity stemming from public RES auctions. Auctions are carried out at least once a year by the Energy Regulatory Office (URE), in which projects below 1 MW and above 1 MW are placed in different baskets. The plan seems easily attainable, and the potential of PV in Poland is actually much larger. The national energy regulatory office anticipates 50 GW of RES capacity in 2030, half of which is set to be provided by solar. Poland plans to build almost 6 GW of offshore wind by 2030 and an additional 5 GW by 2040.
Key drivers for the solar market
In addition to the favourable legal framework, the global energy context is providing a boost to solar deployment. The significant increase in energy prices and the lack of raw materials, resulting from Russia’s attack on Ukraine, is driving local governments and enterprises to look toward energy self-sufficiency, resulting in new investments in photovoltaics. The country is also observing an increasing interest in the direct sale of market-based RES energy in the form of corporate Power Purchase Agreements (cPPAs).
Poland is already experiencing a shortage in energy production capacity, and this trend is set to become even stronger. Against this background, PV is currently the only technology that can deliver new energy production capacity within a short timeframe.
RES auctions 2022
Most of the winning tenders are, like the last year, PV installations. Only five onshore wind farms and two hydroelectric plants won the auctions.
The President of URE resolved RES auctions, with only three of the seven auctions held in December having been conclusive. The total volume of electricity from renewable sources offered for sale in this year’s auctions slightly exceeded 34 TWh and was valued at over PLN 14.3 billion but only around 8.5 TWh (25 per cent) were contracted as a result of the auctions for the value just under PLN 2.5 billion (17 per cent).
The current geopolitical situation is not without its impact on the investment decisions of companies in the energy sector. This also applies to renewable energy generators. The instability and high uncertainty of market projections of electricity prices, clear discrepancy of reference prices in individual baskets, as well as the unstable legal environment, undermine the attractiveness of auctions as a RES support scheme. It seems that we can expect a moderate interest in RES auctions in favour of long-term Power Purchase Agreements (PPAs) in the coming years – observes Rafał Gawin, President of URE.
The auction-based support scheme will be operated in Poland until 2027.
The Transmission Network Development Plan
The biggest barrier is still the limited capacity to connect new generation sources. Where the grid develops, photovoltaics will quickly replenish power shortages. The grid requires modernisation not only due to the energy transformation, but also due to its age – most of its components are over 25 years old, and a significant part is over 40 years old.
In recent months, the Polish Grid Operator, Polskie Sieci Elektroenergetyczne (PSE), signed a framework agreement, the Transmission Network Development Plan for 2023-2032 with planned total expenditure exceeding PLN 32 billion. The agreement will support construction and assembly works of energy development in coming years. The plan has been approved by the President of the Energy Regulatory Office in Poland.
PSE operates the Polish transmission system (TSO). The company controls and manages network traffic across the power transmission network. This includes the security and functionality of the system, as well as the operation, maintenance, and expansion. Part of the TSO’s management also includes balancing the demand for power with supplies in order to maintain a successful power system.
The CEO and President of PSE, Eryk Klossowski commented on the new strategy for Poland: “The plan brings the first major technological revolution in line with patterns from highly developed power systems with a large share of RES in the generation mix – it is the construction of an HVDC line connecting two clearly defined areas of Poland – north and south. The purpose of this investment is to enable the transmission required by the industry located in the south of Poland of energy generated in onshore and offshore wind sources accumulated in the north”.
Once in place, the potential of renewable sourced power in the country will grow substantially. Poland will be able to produce over 100 TWh of clean energy per year by 2030, exceeding more than half of the country’s net power demand.
Hive’s Work in Poland
Hive joined the Polish market in 2022 with the appointment of Country Manager, Artur Foksa. This is a new country for us as we grow our reach across the globe. We have only been active in Poland for a short period, but Artur has already managed to start up our first greenfield project with some very promising new leads and is working hard to secure solar developments for coming years.