The investment partners involved in the construction of the Baltica offshore wind farm have started individual negotiations with the European Commission, concerning the determination of an individual price in the differential contract for both stages of the project – Baltica 2 and Baltica 3. PGE and Ørsted expect a decision from the European Commission within a year. Determining the individual level of support will be an important element bringing investors closer to making the final investment decision.
PGE and Ørsted have submitted a set of documents required by the so-called “Act on the Public Offering of Financial Instruments”. the Offshore Wind Act. Before they reach the European Commission, they will still undergo verification by the Energy Regulatory Office and the Office of Competition and Consumer Protection, each of which has the right to ask for clarifications or answers to additional questions.
– We are very pleased that we have started the process leading to the final price determination in the differential contract awarded in the spring within the assumed timeframe. It is worth noting that we are the first in the market among investors entitled to individual notification. This is a good sign, allowing us to look into the future with optimism. Our shared priority is to complete the project on schedule. This is of key importance for the Polish power system, in which the depleted coal capacities should be replaced with capacities from other emission-free sources, e.g. the Polish Power Engineering and the Polish Energy Regulatory Office. wind farms in the Baltic Sea. We therefore hope to complete the approval process for the individual notification as soon as possible, says Søren Westergaard Jensen, senior director of the company’s business unit. Project Development Manager, leading the development of the Baltica Offshore Wind Farm on behalf of Ørsted.
The starting point for talks with the European Commission is the maximum price set by the Ministry of Climate and Environment at 319.6 PLN/MWh. The mechanism sewn into the Offshore Act means that during negotiations the final price can only be reduced. Before the price approved by the EC becomes final, it will have to undergo final verification by the Energy Regulatory Office. It is therefore difficult today to set a precise date for the conclusion of the negotiation process.
– Establishing final energy prices with the European Commission in a contract for difference is one of the key elements enabling a final decision to be taken on the construction of the Baltica offshore wind farm. A differential contract will secure a large volume of energy at a fixed price, which is a benefit not only for investors but also for energy consumers. The works are progressing according to the assumed schedule – says Wojciech Dąbrowski, President of the Management Board of PGE Polska Grupa Energetyczna
Determining the final level of support for the Baltica Offshore Wind Farm is one of the key elements for making the final investment decision for the Baltica Offshore Wind Farm. The partners expect to hear the European Commission’s decision no later than next year.
According to the schedule, the commissioning of the first stage of the project, i.e. Baltica 3 with a capacity of approx. 1045 MW is planned for 2026. The next stage, Baltica 2 with a capacity of approx. 1500 MW is expected to be commissioned by 2027. These investments will contribute to accelerating the Polish energy transition.
Both stages of the Baltica OWF have location decisions (PSZW), environmental decisions, transmission grid connection agreements with the operator, and have been granted the right to a Contract for Difference (CfD).
About investors
PGE Baltica was established in January 2019 as the company responsible for the implementation of the Offshore Programme in the PGE Capital Group. The PGE Group’s Offshore Programme assumes construction of the Baltica Offshore Wind Farm by 2030, to be implemented in two phases – Baltica 2 and Baltica 3, with a total installed capacity of up to 2.5 GW. Then, after 2030, the Baltica 1 Wind Power Plant will be added to the Group’s portfolio. According to the strategy of the PGE Group until 2030. with a view to 2040. The PGE Group will hold up to approx. 6.5 GW of power in the Polish part of the Baltic Sea.
Ørsted’s vision is a world based solely on renewable energy sources. The Danish-based company is now present in several markets, ranging from the United States of America, through European countries to Asia. Poland is one of the key markets for Ørsted, where the company has been operating for 10 years and currently employs about 250 people (over 6.6 thousand worldwide). The Baltica offshore wind farm, with a total capacity of up to 2.5GW in the Polish part of the Baltic Sea, is part of Ørsted’s recently updated ambition to reach 30GW of offshore wind power by 2030.
Ørsted, which has 30 years of experience in implementing and developing offshore wind farms, currently has approx. 12 GW of installed capacity with this technology worldwide. In addition to offshore wind farms, the company develops, builds and operates onshore wind farms, solar farms, energy storage and bioelectric power plants, and provides energy products to its customers.
Source: Ørsted
