Polish licenses may be returned to government

Developers weigh up risks before paying for right to proceed

A number of the companies that have been provisionally awarded offshore wind development licenses for projects in Polish waters have yet to pay the government a mandatory fee to secure their licenses, Windpower Offshore can report.

Competition for Polish offshore wind licenses has been fierce, with companies bidding for the right to develop about 50 potential offshore wind projects in the Polish Baltic Sea.

But some of the winners may prove unwilling to complete the process and secure their licenses.

Under the terms of the Polish offshore wind auction, license winners must pay 1% of the projected value of the eventual development. Depending on the site, this fee could amount to more than €3m.

Some companies that have been awarded licenses are concerned they will not be able to meet a legal deadline for the securing of building permits. Failure to do so could mean losing the fees they will have paid and other investments in their project(s).

According to Polish maritime law, license holders must obtain a building permit for their projects within six years. Yet Polish national grid operator, PSE Operator, does not foresee being able to connect more than two offshore projects by 2025 out of the 13 projects granted licenses thus far. As rules currently stand, without a grid connection contract it is impossible to secure a building permit.

Moreover, the licensed development areas have yet to be subject to geophysical, geotechnical and environmental surveys.  With so little information about site conditions, there is a risk that some projects awarded preliminary licenses will not proceed to construction.

The Polish ministry of transport and maritime affairs (MTMA) declined to specify to Windpower Offshore  which of the 13 awarded licenses have already been paid for. It is known that Generpol, owned by Swiss investment firm, Seapower Invest, has been awarded five licenses. Another three have been granted to Polish power company, PGE and two to Kulczyk Investment group, owned by Polish businessman, Jan Kulczyk.

Three companies have been awarded one license each: PKN Orlen, Deme Group and A-Wind. The latter is rumoured to be seeking to sell its license.

Just two offshore wind farms with a total capacity of just over 2.2GW - Kulczyk's 1.2GW  project and PGE EO's 1GW project – have been granted grid connection promises.