The Baltic East project achieved success in the recent offshore wind auction, offering a highly competitive price of PLN 476.88/MWh. About the background of cost optimization, the strategic proximity to Baltic Power, and the project timeline that assumes first power generation as early as 2032, I speak with Janusz Bil, President of the Management Board of ORLEN Neptun.
Krzysztof Bulski: The price of PLN 476.88/MWh secured by the Baltic East project is very competitive given current market conditions. What factors made such cost optimization possible for this investment?
Janusz Bil: The competitive price offered by the Baltic East project in the offshore auction is the result of consistent cost optimisation across all stages of project preparation. Key factors included the team’s experience gained during the implementation of the Baltic Power project, which translated into reduced technical and cost risks already at the design stage of the wind farm. In addition, the project’s favorable location had a positive impact on the overall cost of energy.
An important factor was also the early engagement in discussions with technology suppliers and contractors, who were given sufficient advance notice to prepare for securing the project’s supply chain.
All of these aspects made it possible to offer a competitive price even in a challenging market environment.
The Baltic East project is located directly adjacent to Baltic Power. To what extent will this geographical proximity translate into operational synergies, particularly in terms of logistics and future operation and maintenance (O&M) costs?
The proximity to another offshore wind farm project already being developed in this area is a significant advantage. The close location of both wind farms creates substantial potential for optimization during the operation and maintenance (O&M) phase, which is playing an increasingly important role in the overall value of offshore projects. Effective O&M management is critical to the success of such investments, and access to proven processes or infrastructure facilitates the implementation of competitive solutions, both through the development of internal capabilities and through strategically sourced external competencies. This approach not only helps reduce future operating costs but also enables the presentation of attractive business models, ensures favorable returns, and ultimately delivers a competitive advantage. Moreover, the experience gained from the development of the Baltic Power wind farm reduces project risks and increases the efficiency of work planning.
Baltic East is expected to benefit from funding under Poland’s National Recovery Plan (KPO). What does the project’s financial structure look like today, and is the planned commissioning date in 2032 secure?
The Baltic East project has been granted debt financing on preferential terms from the National Recovery Plan (KPO) for the offshore part of the development. Agreements signed by ORLEN and Bank Gospodarstwa Krajowego provide the Group with financing of approximately PLN 3.5 billion. Of this amount, PLN 900 million will be allocated to the Baltic Power offshore wind farm, with the remaining funds earmarked for the Baltic East project. In addition, winning the auction means that the project will be covered by a support scheme in the form of a two-way contract for difference, which will ensure a predictable revenue stream and stable investment conditions for up to 25 years. In line with the schedule, the first electricity from the Baltic East wind farm is expected to be generated in 2032.
The ORLEN Group’s strategy places strong emphasis on partnerships. Following the auction success, do you plan to accelerate the search for a strategic partner specifically for the Baltic East project?
We confirm our intention to develop the Baltic East project within a strategic partnership framework. However, given that the selection of a partner is a multi-stage and confidential process, any information regarding its outcomes will be communicated at the appropriate time through the official communication channels of the ORLEN Group, with full respect for disclosure obligations and the interests of all parties involved.
Thank you.
