Norwegian companies invest!
In 2021 Equinor bought 100% of the shares in Polish onshore renewables developer Went with a project pipeline of 1,6 GW. Since then one PV farm (58MW) has been built and one (26MW) was recently bought from Swedish owners. Equinor has also made a breakthrough in offshore wind (1,44 GW) and made a long term gas sales contract with PGNiG.
Statkraft is involved in Poland since 2018 and offer renewable power contracts both upstream and downstream.
Some data from 2021 and 2022 explain why Poland need foreign investors to invest in green energy.
Poland is probably the fastest growing market for renewable energy in Europe right now so it’s only natural that Norwegian leading energy companies compete for renewable investments, PPA’s and new business in Poland. The table at the right shows that carbon emissions need to be reduced significantly over the next years.
“We are entering this market with plans to build new wind and solar power plants. We will also collaborate with business partners in development projects, and it may be relevant for Statkraft to look at opportunities for mergers and acquisitions in Poland if this creates value,” says Michal Smyk, who heads the Statkraft operations in Warsaw.
One of the biggest challenges for further renewable growth in Poland is poor capacity in the power grid, just as in many other European countries.
PEP2040
– The Polish government has drawn up a strategy, “Energy Policy of Poland until 2040”, which sets out how the country will reach its ambitious energy and climate goals. New energy must be green, but also reliable. In a 2020 poll, 78 percent of Poles said more renewable power is the best solution to protect the environment and climate. About 73 percent of Poland’s energy consumption today comes from fossil sources, mainly coal and lignite. However, this marks a sharp decline from 2010, when a total of 87 percent of Poland’s power consumption came from fossil energy sources. The government scenarios for RE development by 2040 can be found in the table at the left, and as you can see the PV development is ahead of target.
Diversification – undertaking a technological diversification that includes building up to 9,6 GW of offshore wind and up to 9 GW of nuclear power will also require massive investments by multinational partners. Development of the power grid and energy storage, as well as increased focus on energy efficiency, are also parts of the plan.
So what are the future opportuntities for Norwegian companies?
Gas – Poland has not been as dependent on Russian gas as Germany and certain other European countries, and today gas purchases from Russia are a thing of the past.
Poland has built a new terminal to receive liquefied natural gas (LNG), and the Baltic Pipe pipeline between Norway and Poland is a reality. This means that the country’s need for gas will be met in the years to come, at the same time as much more renewable power production will be developed.
The Baltic Pipe gas pipeline runs from the Norwegian part of the North Sea to Denmark and Poland. The transport system was officially opened in September 2022 and helps secure gas supplies to the two countries. The pipeline system will also be able to transport hydrogen and biogass in the future.
Wind power – For many years, Poland had strong growth in the development of onshore wind power, but in 2016 the government introduced the so-called 10H rule requiring that the distance between wind turbines and residential areas should be at least 10 times the height of the turbine. In practice, given Poland has the most rural population in Europe, this requirement has made it almost impossible to build new onshore wind power in Poland. However, the government has recently passed a new law that could, to some extent, reverse the 10H rule by allowing new wind farms to be laid up to 500 metres from buildings. The prerequisite is that the development is approved by local authorities.
Photovoltaics – If there has been a decline in new wind projects in recent years, the growth of photovoltaic solar energy is strong and sustained.
“Poland is investing heavily in solar energy,” says Michal Smyk. Installed capacity now stands at over 12 GW (2022) and is expected to double by 2025 and triple by 2030.
This development is possible partly thanks to various government support schemes for both producers and consumers. Until now, much of the solar power in Poland has come from decentralized plants, usually solar panels on rooftops. In the future, one expect larger solar parks becoming more common. We have already seen larger plants of 10-50 MW, and there will probably be plants with an output of up to 100 MW in the near future.
Batteries – Almost no energy storage has so far been deployed in Poland. Around 1.7 GW of pumped storage plants exist, most of which were built in the 1970s and 1980s. Battery storage is almost non-existent, with under 5 megawatts (MW) of large-scale units and limited home batteries as well, due to a lack of support schemes. As for other flexibility tools, 1 GW of demand-side response (DSR) is provided by industrial players who are willing to reduce demand for a certain price. The latest capacity auction contracted 1.5 GW of DSR for the year 2026 (Forum Energii 2022), but this is still only 6 percent of the current peak power demand.
This is why grid balancing and management technology arguable will be the best opportunity for Norwegian companies in the green tech cluster.
Carbon capture – Horisont Energi and the energy company PGNiG Upstream Norway (PUN), part of the ORLEN Group, recently signed a Letter of Intent (LoI) whereby PUN aims to enter as partner and operator in the only CO2 licence in the Barents Sea – Polaris. This LoI is an important milestone in line with the ORLEN Group’s strategic decision to enter the CO2 storage business, with the Norwegian Continental Shelf as one of the key markets for its implementation. The Polaris project is thus the ORLEN Group’s first intended CO2 licence anywhere. “Cement, steel and fertilizers producers must find a way to manage carbon dioxide emissions, if they want to continue operating in Poland, or more broadly in the European Union”, says Daniel Obajtek, CEO and President of the ORLEN Management Board.
Partnering with Horisont Energi on the Polaris project will allow ORLEN to effectively implement proven and safe technologies of CO2 storage and prepare a competitive offer of carbon management for Polish industry.
It’s also a great sign for the industrial potential of the CCS business in Norway.
