Poland Gets EU’s Green Light to Prolong Renewable Energy Support Scheme

The European Commission has approved, under EU State aid rules, the prolongation of an existing scheme to support electricity production from renewable sources in Poland.

The measure was initially approved in 2017 with a budget of approximately EUR 9.4 billion (PLN 40 billion), and was set to expire on 30 June 2021. On 17 December 2020, the Commission approved an extension of the duration by six months, until THE end OF 2021.

The Commission has now approved the prolongation of the scheme for the period 2022-2027. Aid is granted in the form of a variable premium on top of the market price, calculated as the difference between bidding price and the wholesale electricity price.

“The Commission assessed the measure under EU State aid rules, in particular the 2014 Guidelines on State aid for environmental protection and energy. The Commission found that the aid is necessary to further develop energy generation from renewable sources and to help Poland meet its environmental targets, set at European and national level”, the European Commission said.

“Poland committed to carry out an ex-post evaluation to assess the features and implementation of the prolonged scheme. The Commission concluded that the prolonged measure remain in line with EU State aid rules, as it will continue to contribute to increase the share of renewable energy in Poland and reduce greenhouse gas emission, in line with the European Green Deal objectives, and without unduly distorting competition in the Single Market”.

In May, the Commission also approved Polish offshore wind Contracts for Difference (CfD) scheme, through which the country plans to support the realisation of offshore wind projects with EUR 22.5 billion.

The offshore wind CfD scheme is being implemented in two phases and will run until 2030.

Up to 5.9 GW of capacity was offered via Contracts for Difference (CfDs) in the first half of 2021 for projects in the most advanced stages of development, some of which could be operational by 2025.

In this first phase, the Polish Energy Regulatory Office (ERO) awarded CfDs to the 1 GW Baltica 3 and 1.5 GW Baltica 2 offshore wind projects, developed by Ørsted and PGE, and to the 350 MW FEW Baltic II offshore wind project, developed by Baltic Trade and Invest Sp. z o. o., a subsidiary of the German energy company RWE, the 370 MW B&C-Wind project developed by Ocean Winds, Equinor and Polenergia’s Bałtyk II and Bałtyk III projects with a combined capacity of 1,440 MW, and the 1.2 GW Baltic Power project developed by PKN Orlen and Northland Power.

The second phase of development will include two CfD auctions, the first in 2025 and the second in 2027, each for 2.5 GW of additional capacity.

The auctions follow Poland’s signing of the Offshore Act into law from February, which regulates the development of offshore wind farms in the Polish Baltic Sea and allows for 10.9 GW of offshore wind capacity to be either operational or under development by 2027.

As part of its offshore wind ambitions, Poland has also recently earmarked a few billions of Euros in its National Reconstruction Plan for offshore wind development and for port upgrades in support of the country’s offshore wind activities.