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Poland

Poland

Thriving market attracts international investors -- Poland set for boom

With 143 MW of new capacity installed in 2006, including a 40.5 MW wind farm commissioned in January, the Polish wind market is finally up and running and is "one of the most promising of the east European markets," according to Danish company EuroTrust. The country has good coastal wind resources and an established market for trade of green certificates. Work on several hundred megawatt of new wind plant is in process.

EuroTrust is buying the 51 MW Karceno-Serba project being developed by Germany's WKN Windkraft Nord. Located near Kolobrzeg, five kilometres from the Baltic Sea coast, it will comprise Vestas turbines and is due for completion this year. EuroTrust expects to build a Polish project portfolio of 100 MW within three years.

Felix Losada of German turbine manufacturer Nordex agrees with EuroTrust about Poland's future. For the moment the company has just one 225 kW turbine in the country, in operation since 1997, but Losada says he is optimistic about future sales: "It's an important new market for us with very promising potential."

Poland's commercial wind capacity increased from 60 MW at the end of 2005 to nearly 200 MW at the end of 2006. It now has eight commercial wind projects and around 20 additional turbines -- installed by individuals or as demonstration projects by municipal authorities from 1991 to 2000 -- scattered around the country for a total installed capacity of 204 MW. The biggest project to date is the 50 MW Tymien wind farm commissioned last year and developed by EEZ, based in Szczecin.

In January, Iberdrola commissioned the Kisielice 40.5 MW wind station at Warminsko-Mazurskie in northern Poland and reported that work had begun on the Malbork 18 MW station, due for commissioning later this year. Both projects use GE Energy 1.5 MW turbines. Iberdrola entered the Polish market in 2005 by acquiring MVV Eternergy Polska, renaming it Iberdrola Energie Odnawialna. The subsidiary has an 800 MW wind pipeline under development in Poland, says Iberdrola.

A number of other developers have announced long term plans in the country. Denmark's national energy company, Dong Energy, expects to bring its 30.6 MW Lake Ostrowo wind farm on line in the second half of 2007, while Polish Energy Partners expects to commission two wind farms with a combined total of 70 MW in 2008, three projects totalling 212 MW in 2008 and a further 282 MW in 2009. Local firm Elektrownia Wiatrowa Kamiensk (EWK) has contracted Enercon to build a 30 MW project using 2 MW machines at the Belchatow open-cast lignite mine in central Poland and hopes to get all necessary permits for a further 60 MW project in 2007.

Poland's buoyant green certificate market, launched at the end of 2005 and linked to an obligation on electricity retailers to source a specific proportion of their supplies from renewables, is driving the market. Under the latest ordinance, which increased targets and took effect at the end of November, the obligation is 5.1% in 2007, up from 3.6% in 2006, 7% in 2008, 8.7% in 2009 and 10.4% during 2010-2014. Companies can choose to pay a fee, currently PLN 240/MWh (EUR 61.7/MWh), to buy out of their renewables obligation and are subject to a penalty if they neither buy certificates nor pay the fee. At the end of 2006, green certificates were being traded at PLN 238/MWh, close to the fee for non-purchase of certificates.

The strong interest from investors suggests the demand for green certificates is sufficient to drive a market for wind power. In addition, however, wind projects in Poland are also eligible for inclusion in the Kyoto Protocol's Joint Implementation (JI) program, under which they qualify to sell their carbon emission credits. The Tymien wind farm, Dong Energy's Lake Ostrowo, Gamesa Energie Polska's 40 MW Grzywacka-Osiek project planned for south-east Poland and Iberdrola's Kisielice project are all seeking JI status. "We hope our Polish Karceno-Serba station will get authorised as a JI project because the price paid for wind energy in Poland is about the lowest anywhere in Europe," says EuroTrust's Robert Skjoedt.

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