Poland prepares new renewables law -- Driven by the EU directive

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The Polish parliament is soon to debate a draft law that will lay a broad strategy for national renewable energy development. With a new legal framework, Poland has the potential to become a top market for wind, enthuses Markus Kurdziel of the Deutsche Energie Agentur (Dena) in neighbouring Germany.

Under the EU's renewables directive, Poland is committed to raising the proportion of green power in its electricity supply to 7.5% by 2010, compared with about 2.65% in 2003 and 2.85% in 2004. These targets are already written into a Polish ordinance that took effect in May 2003, but are largely being ignored, say critics, because there is no strict penalty system for non-achievement. When Poland joins the EU in May, and the new law is passed, the hope is that electricity companies may find they have to start taking the targets seriously.

Currently, power purchase contracts for wind are negotiated directly with electricity companies. "Generally, the best rate achievable is about EUR 0.06/kWh for ten years, insufficient to finance wind projects," says Heike Kröger of Germany's Projekt Ökovest, active in Poland.

Dena's new export handbook for wind in Poland says 23 German companies are actively developing projects there, 17 of which have Polish subsidiaries. Alongside the numerous Polish developers, utilities Elsam of Denmark, Dutch Nuon and Spain's EHN have a foot in the door.

With so much pent up drive to develop Polish wind, 2003 was a disappointment, with no new projects beyond the 58 MW now operating. The largest is a 30 MW plant of Vestas 2 MW turbines, commissioned in late 2002 by Elsam's Polish subsidiary, Wolin North Spolka, in partnership with Polish wind developer EPA of Stettin.

Further big projects may soon start to move forward, however. Germany's Energy Consult Projekt (ECP) and sister company WKN have been busy since 2001, in co-operation with Polish engineers. "We have leased 2000 hectares of agriculture land for wind energy and made wind generation forecasts for five wind stations," says ECP's Stefan Ebeling. The first 62 MW will be in two stations and probably use Vestas 2 MW machines, he adds.

Projekt Ökovest and its subsidiary Ekovest Polska is well advanced with gaining permits for a 22 MW station in the Koszalin region. It has secured about 640 hectares of land for wind development on the Baltic Sea coast in anticipation of a legal framework that will make investment secure once Poland joins the EU.

A bankable PPA

Eternegy Polska, the Polish wind development arm of a German municipal utility, MVV Energie, has clinched a 20 year power purchase agreement (PPA) with Danzig-based utility Energa for up to 300 MW spread over ten wind stations along the Baltic Sea coast between Stettin and Danzig. Negotiations were "long and difficult" says the company, but drew on MVV's ten years of energy project experience in Poland.

The PPA "makes the projects bankable," says Eternegy, although the deal has yet to be authorised by the Polish government supervisory authority URE. Eternegy will proceed with the projects when it has found buyers and operators. While Energa seems undecided about its approach to wind power, interest has been shown by large foreign utilities and pension fund and insurance companies looking for a secure and steady annual return on investment for a 20 year period. Polish industrial companies also have their eye on the potential for trading green electricity.

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