Market Status: Poland - Good potential thwarted by lacklustre government

POLAND: New installations in Poland in 2009 totalled 322MW, raising the country's wind capacity to about 866MW, according to provisional figures from Poland's wind energy association.

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The increase in 2009 was more than double the 125MW added in 2008, but complications with conservation-area designations and power grid connections continue to frustrate developers and slow wind expansion.

In January 2010, the Polish wind energy association presented a document that forecast a rise in the total capacity of just 55MW to 921MW in 2010. The outlook for the following two years looks more promising, with the fleet expected to rise to 1.4GW in 2011 and 2.3GW in 2012.

The 2010 forecast may be a little modest, however, since three substantial projects are likely to come online this year, boosting capacity by 108MW, starting with RWE Innogy's 35MW Tychowo project, comprising 15 Siemens 2.3MW machines. GDF Suez's 22MW Jarogniew/Moltowo wind station is likely to be commissioned in the third quarter of 2010. GDF bought the remaining 30% of the project from Polish Energy Partners in October 2009, having bought the initial two thirds in December 2008. The third project in the pipeline is the 51MW Karcino project, which Danish utility Dong Energy bought from Eurotrust-owned company Aktiv Wind in March 2009. Karcino will be Dong's third wind station in Poland.

Eurocape New Energy, too, has two projects on which construction will begin this year, but which may not be completed until 2011. The firm is installing 46 Nordex 2.5MW turbines at Grochowo near Danzig, while its Banie project near Stettin will have 46 turbines split between Enercon 3MW machines and Nordex 2.5MW machines.

Poland's wind association predicts installed onshore wind capacity could grow to 5GW by 2015 and 10.9GW by 2020, with offshore reaching 1.5GW and small turbines contributing another 600MW by 2020. Poland's major energy group, Polska Grupa Energetyczna, alone aims to commission about 2GW of wind energy in Poland by 2020.

The Polish government appears to be dragging its feet in tackling wind issues, however. The former EC renewables directive of 2001 had set a target of around 10% of renewables in both electricity and overall energy supply by 2010, which would require about 2GW of wind energy - more than twice Poland's current turbine fleet.

It remains to be seen whether the government finds the 2009 renewables directive more motivating. This sets a target of 15% of overall energy to be supplied by renewables in 2020, compared with 7.5% in 2005. On November 10, 2009, the Polish government's council of ministers adopted a document titled Energy Policy of Poland until 2030, which said the most important undertaking with regard to renewables would be developing a path towards achieving the goals included in the EU climate package. However, according to the Polish wind energy association, when the government will complete this first step is not at all clear.

Grid connection

Meanwhile, two practical issues continue to thwart wind development. One is Poland's complex process for connecting wind projects to the grid. Connection for wind turbines totalling over 2MW require an expert opinion on the project's likely impact on the national power grid. However, an absence of guidance specifying what detail the opinion should contain and limited access to the information constituting the basis for the expert opinion are creating substantial delays at this stage of wind project execution, consultants TPA Horwarth and legal firm Domanski Zakrzewski Palinka wrote in a report last year.

A further problem is that around 32% of Poland's land area is protected under various conservation regimes, particularly the EU's Natura 2000 nature reserve programme, with an additional 1.6 million hectares being considered for inclusion. Wind developers that have plans to develop projects in these areas are urgently calling for the list of areas under Natura 2000 to be finally fixed, to rule out later modifications that could jeopardise their projects.

But wind stations that have cleared all the hurdles and are now generating power received payment in 2009 similar to the rate per kWh for onshore wind in Germany. Wind energy in Poland is aided by a green certificate mechanism. Wind station operators sell their output for the average wholesale price of electricity and receive extra revenue through the sale of green energy certificates for each MWh of electricity. With the average power wholesale price for 2009 up 20% on 2008 and the average value for a green certificate also up around 5% last year, the overall average price achieved by wind operators was PLN 410/MWh (about EUR101/MWh), according to data supplied by the Poland WEA. The value for 2010 will be set this month.

New installations in 2009
Margonin, Wielkopolskie Gamesa Gamesa 120
Karscino, Zachodniopomorskie Fuhrlander Iberdrola 69
Tychowo, Zachodniopomorskie Nordex RP Global 50
Suwalki, Podlaskie Siemens RWE Innogy 41
Sniatowo, Zachodniopomorskie Vestas Power4all 32
Dukla, Podkarpackie Repower Martifer 10

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