Environmental impact assessment (EIA) is one of the key stages in the development of any offshore wind farm. However, today in Poland, for the 11 projects in phase II, it takes on special significance. It is the environmental decision that is to be one of the 3 key passes to the CfD auction, among the 9 required by the Offshore Act. Polish offshore wind is changing – the entrenched approach to permitting is being strongly revised and new projects are facing challenges unprecedented for the Baltic Sea. This creates risks that require mitigation, but it also provides opportunities to build significant competitive advantages, as pointed out by Michał Kaczerowski, CEO of Ambiens.
Ready!
Applicants for location decisions (permit for erection and use of artificial islands, structures and devices – “PSZW”) are looking more and more impatiently at the ongoing determination procedure in which the beneficiaries of legal titles to the water regions in question are to be selected. The 11 areas planned for wind energy in accordance with the Spatial Development Plan for the Polish Maritime Areas were systematically released in 2021/2022. Applications for the last water regions, according to official deadlines, were received by the Ministry of Infrastructure more than six months ago. And it is the protracted competitive stage, jokingly referred to by many as a “beauty contest,” that raises scheduling concerns. Time is passing, pending projects are not officially taking off, and 2025, along with the announced first auction for half of the 5 GW of total ERO support (the next auction is planned for 2027), is inexorably approaching.
Set!
The Offshore Act does not indicate a specific date for the CfD auction to cover the negative balance. At this stage, we only know that the ERO must organize it in 2025 and 2027. Assuming even the optimistic option, i.e. a late auction (December 2025), the time to obtain an environmental decision shrinks to a critical scenario (taking into account the issue of finality, validity and offshore deviations from the Code of Administrative Procedure). Thus, developers’ “readiness” as described by, among other things, the schedule and draft budget in the PSZW application may become void by lapse of time and result in the need to revise financial assumptions and/or increase risk scoring. In view of option analyses of the schedules of individual water regions, in our opinion, in some projects this could happen as early as the first quarter of 2023.
As we already know, keeping our fingers crossed for a quick settlement of the PSZW proves insufficient. Even riskier today seems to be the speculation that the auction date may eventually be postponed, in view of the industry’s raised voices. Observing the environment and actively communicating with administrative and regulatory stakeholders is certainly essential, but let’s try to look inward to the OWF project. It is worthwhile to focus ahead of time on issues that you can have a real impact on, that you can actively manage. At this point, it should be emphasized that the time competition will not only involve timely completion of successive checkpoints on the timeline of the regulatory framework. The race also includes competition with other developers, and there are limited personnel and fleet resources in the pool, connection conditions or, going forward, access to financing and the cost of money.
Go!
The decisive factor, therefore, will not only be the dynamics, but also the ability to operate “out of the box”, outside of the usual tried-and-true patterns. The most natural move seems to be the pre-emptive launch of offshore research campaigns. They do not require a legal title to a water region and involve only 3–4 additional approvals. This is an approach that is also familiar in onshore wind power, where monitoring is launched while the Local Development Plan and site acquisition works are still underway. Thus, in the case of individual water regions out of the 11 in phase II, there was no waiting for the resolution of location decisions prior to the launch of fragmented scopes of research works. Additionally, in Ambiens for environmental impact assessment we detail 12 components of offshore research and 3–4 independent campaigns, the approach to which may depend on the strategy and detailed SIMOPS.
At this stage, it is the adequate strategy, the pattern of its implementation and execution dependent on the project model and the developer’s human resources that seem to be crucial for permitting dynamics and effective risk management. Rapid mobilization, effective research cruises to collect data, and dynamic post-processing are undoubtedly key components of EIA CAPEX. And despite the fact that data quality is very important, this is not where the mentioned competition plays out.
Beware of false start…
As we know from previous environmental impact assessments for offshore wind farms in Poland, the time it takes to issue an environmental decision calculated from the submission of the EIA Report is up to 26 months. On the one hand, the burden on RDEP Gdańsk and RDEP Szczecin is expected, on the other hand, a detailed comparative analysis of previous scopes and characteristics of calls for additions combined with a modern approach to scooping will mitigate the risk of protracted procedures. At the same time, awareness of cross-border, cumulative, and related impacts is crucial from the outset, which stakeholder management must also cover. Therefore, among the strategic elements of the EIA, we also see effective communication on 7 levels, carried out from the very beginning of the life of the project (after receiving the PSZW), and not limited only to the public consultations required by law.
At the same time, it is very important to link the environmental impact assessment to all parallel processes from the very beginning. Permitting optimization also includes pre-addressing the impact of the environmental decision on all further milestones of subsequent stages. The main ones include avoiding environmental impact re-assessment, preparing the framework for design and building permits, and meeting the environmental and social expectations of financial institutions.
From a project and contractual point of view, we see Ambiens as having 4 basic models for the implementation of an EIA with our participation, ranging from a comprehensive end-to-end one, through a hybrid one with the Client Representatives option, and a selective one, to the one limited to the most sensitive areas including, among others, project management, supervision, strategic consulting, development of the EIAR and carrying out the procedure. In essence, each time it should be a tailor-made solution and depend on the expectations and capabilities of the developer. The needs of Investors with strongly developed teams in phase I will differ from those of concerns just entering Poland. Ultimately, partnerships can also be decisive for the structure of cooperation. As the practice of investments of this scale shows, in addition to strong project teams, competence in sensitive areas will also be needed on the investors’ side. And environmental impact assessment, the foundation of permitting, is undoubtedly one of these.
Michał Kaczerowski, CEO Ambiens
