ORLEN Group has made a final investment decision to build Poland’s first Baltic Power wind farm. The investment, which will add nearly 1.2 GW of power to the Polish system in 2026, will be carried out jointly with Canada’s Northland Power. Baltic Power will be able to produce clean, accessible energy that can power 1.5 million households. The investment decision means that the corporation has a set of construction permits and has secured all farm components and financing for the project. As part of the preparation of installation infrastructure for the offshore industry, the corporation has also begun construction of a terminal in Swinoujscie.
– We are at a turning point, both for the ORLEN Group and the entire Polish energy sector. We have launched the largest investment in renewable sources in the country and the entire region. The Baltic Power offshore wind farm is one of only two projects in Europe to reach the implementation phase in the past three years. Despite the challenges posed by the pandemic, supply chains, or conflict across our eastern border, we have consistently operated according to the schedule we set at the outset. Within three years we will launch the first offshore wind farm in Poland, but we want to use our experience and built infrastructure for other projects as well. An example is the just-started construction of an offshore wind farm installation terminal in Swinoujscie, which will be used in the implementation of Baltic Power, but also another five farms planned by ORLEN Group with a total capacity of 5.2 GW – underlines Daniel Obajtek, President of the ORLEN Management Board.
The Baltic Power farm will generate electricity equivalent to 4,000 GWh, or about 3% of Poland’s current electricity production. This will help avoid emissions of about 2.8 million tons of CO2 per year. Installation of the farm’s foundations will begin in 2024, and by 2025 the farm will be home to 76 Vestas wind turbines, with a unit capacity of 15 MW and a height of more than 250 meters. An onshore substation is already under construction to receive energy from the sea. Baltic Power has agreements with major contractors and suppliers that secure the entire supply chain – manufacturing, transportation and installation of all key components of the farm. Among them are the world’s most experienced suppliers in the offshore wind sector, including companies from Poland. The project’s total budget is estimated at around €4.73 billion and includes capital expenditures with insurance of approx. 4.05 billion, as well as financing costs and additional reserve. The project will be financed under the Project Finance formula – in September, Baltic Power’s shareholders signed loan agreements to this effect for a total amount of approx. 4.4 billion with 25 Polish and international financial institutions. This is the largest financing raised for a single investment in Poland’s history and one of the largest offshore transactions of its kind in Europe. The conditions under which the loan agreements were concluded demonstrate the very strong business foundation of the Baltic Power project.
– As Northland, together with our partner ORLEN, we are pleased to start construction of the Baltic Power project. Once operational, Baltic Power will power more than 1.5 million households making a significant contribution to supporting Poland’s energy transition goals. We look forward to reaching more construction milestones in the coming months – emphasized Mike Crawley, CEO of Northland Power.
Preparations for the project included wind measurements, environmental studies and geotechnical investigations, based on which design work was carried out. During the five-and-a-half-year project preparation period, the Baltic Power team obtained seven construction permits, requiring a total of more than 150 administrative approvals, obtained from 40 different institutions. The construction documentation for the farm alone is more than 10,000 pages, and the number of all materials that the Baltic Power team has prepared during this time amounts to nearly 320,000 documents and studies.
In preparation for strategic development in the offshore industry, ORLEN Group is also beginning construction of Poland’s first offshore wind farm installation terminal. The project, being developed by ORLEN Neptun, is being built in the port of Swinoujscie and will be one of the most modern terminals in Europe when completed in 2025. Its wharves and storage yards will allow for the transportation and installation of state-of-the-art wind turbines of 15 MW and larger. The terminal will first serve the Baltic Power project, then support the implementation of other developers’ projects and ORLEN Group’s subsequent investments in the Baltic. In the future, due to its favorable location, the port in Swinoujscie will be able to handle not only Polish investments, but also those carried out in German, Swedish or Danish waters.
The ORLEN Group has recently acquired licenses for the construction of another 5 offshore wind farms with a total capacity of 5.2 GW. Four of the five concessions are located on the Oder Bank, at the level of Kolobrzeg near the ORLEN Neptune terminal under construction. The fifth site is located on the Slupsk Bank and borders the area where the Baltic Power farm is being built. ORLEN Neptun is responsible for their implementation.
Offshore wind energy is one of the main directions of the corporation’s modern energy development. According to the Strategy, by 2030 ORLEN Group will reach 9 GW of installed renewable energy capacity. The implementation of all offshore wind farm projects currently in the ORLEN Group’s portfolio will provide the company with approx. 6.4 GW of capacity and will contribute to the company’s goal of carbon neutrality by 2050.
Source: ORLEN Group