Polish utilities sign offshore wind cooperation agreement

Three of Poland's state-controlled utilities signed a letter of intent Jan. 18 to cooperate in the development of new offshore wind projects in the Baltic Sea.

Under the terms of the cooperation, PGE Polska Grupa Energetyczna SA, Tauron Polska Energia SA and Enea SA will establish a special purpose vehicle to jointly decide the location and financing for future offshore projects, Artur Soboń, Poland's deputy state assets minister, told a news conference.

The cooperation agreement does not include projects already under development, PGE CEO Wojciech Dąbrowski said.

"The letter of intent and the idea of establishing a special purpose vehicle will concern new investments, for which we will apply jointly, for the right to build artificial islands in the Baltic," he said. "Our task is to ensure that Polish companies and the Polish economy benefit as much as possible by implementing these large investments."

The investments will amount to 140 billion zlotys to 150 billion zlotys to help build 11 GW of capacity, Dąbrowski said.

PGE is developing three projects, with combined capacity of 3.5 GW, and is in advanced talks about partnering with Denmark's Ørsted A/S for two of the investments. Last year, Tauron signed a cooperation agreement to develop projects with EDP Renováveis SA and Engie SA. In September, Enea withdrew from exclusive talks with Iberdrola SA but the company's CEO, Paweł Szczeszek, told the news conference that "our goal is to become a completely green generation unit."

Poland's fourth utility, Energa SA, which was bought last year by the country's largest refiner, Polski Koncern Naftowy Orlen SA, is not party to the agreement.

Last week, Poland's parliament wrapped up approval of a new Offshore Wind Act that will award an estimated 32 billion zlotys in support for the construction of 10.9 GW of capacity over the next decade. The first projects are expected to be ready in 2025.

According to the Polish Association of Wind Energy, the Polish area of the Baltic Sea has potential for 28 GW of capacity.

Poland's most advanced projects are led by the privately owned utility Polenergia SA in partnership with Norway's Equinor ASA and those being developed by PGE.

Adam Easton is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.

As of Jan. 18, US$1 was equivalent to 3.75 Polish zlotys.