Polish Ministry of Climate has published a new version of the regulation on maximum energy prices at auctions for offshore wind farms. The changes, resulting from an amendment to the so-called Offshore Act, introduce differentiation of support rates under 25-year strike price contracts depending on the location of the wind farms, with the aim of better matching support mechanisms to the costs of project implementation.

Differentiated support limits

The previous limit of PLN 512.32/MWh was to be the same for all investors. The new rules provide that such a rate will only be available for projects located on the Central Shoal (areas 53.E.1 and 60.E.1-4). However, for the farms on the Odra and Słupsk Shoal (areas 14.E.1-4, 43.E.1, 44.E.1, 45.E.1, 46.E.1) the support limit will be 479.10 PLN/MWh.

In practice, the rate of 512.32 PLN/MWh will cover only a few projects, including:

– three developed by PGE in areas 60.E.2-4 (of which one jointly with Enea in 60.E.4),

– a project by Polenergia and Equinor in area 60.E.1.

On the other hand, a lower limit – PLN 479.10/MWh – is to apply to:

– five Orlen farms (Energa OWF 1 and 2 and three Orlen Neptun farms),

– three PGE farms, of which:

– one implemented with Tauron (43.E.1),

– one with Ørsted (45.E.1),

– one on its own (44.E.1).

Why the differentiation of rates?

The Ministry of Climate argues the change is necessary to eliminate the risk of so-called ‘over-support’ for investors who develop projects closer to the coastline, where logistical and infrastructure construction costs are lower. The projects covered by the higher rate (512.32 PLN/MWh) are located about 90 km from the shore, while the others are located about 60 km away.

According to the Regulatory Impact Assessment (RIA), the total estimated costs of the support scheme for offshore wind farms in Phases I and II of offshore development, covering a target of 17.9 GW of installed capacity, will amount to 144.21 billion.

The regulation is expected to enter into force by the end of the year, which will enable the organisation of auctions in 2025 with the new rates.

Source: Polish Ministry of Climate