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Highlights

Polenergia to build 38 MW Szymankowo project

Asahi Breweries signs PPA with RWE to fund expansion project

Mercedes Benz signed first PPA with existing wind farm last year

Warsaw — Privately-owned Polish utility Polenergia is launching construction of the 38 MW Szymankowo wind farm, the first large renewable energy project in Poland that will not require state subsidies nor a long-term power purchasing agreement, it said late Tuesday.

Polenergia said it has obtained Zloty 107 million ($27.8 million) in bank financing from the EBRD and two private banks, mBank and ING Bank Slaski, for the project in Miloradz, Pomerania, northern Poland, which is scheduled to be ready in 2021.

The company said Siemens Gamesa will supply 3.4 MW turbines for the farm. This would reduce the project's long-term costs, generating more electricity than the 2-2.5 MW turbines that are the norm in Poland.

Polenergia said it is not excluding entering the project in next month's RES auction to secure a 15-year government contract "if it allows maximising the profitability of the project."

If a project produces energy relatively cheaply, as in this case, and wholesale electricity prices look likely to remain high, it is not always in the best interest of investors to conclude long-term contracts with the government, Bartlomej Derski, from industry website Wysokie Napiecie told S&P Global Platts.

Derski said Polenergia would probably bid the highest level possible of Zloty 285/MWh set by the Ministry of Energy for next month's auction.

If it fails to win the auction, the project can still be built without subsidy, and if it wins, it will ensure both a stable and a high price for 15 years, he added.

Poland's year-ahead baseload power contract closed Tuesday at Zloty 265.50/MWh, Polish Power Exchange data show.

Separately, Innogy said Tuesday it had signed a 10-year PPA with Asahi Breweries Europe to supply electricity to three of the company's breweries in southern Poland between 2020 and 2029.

The funds from the PPA will finance the 11 MW expansion of Innogy's 73 MW Nowy Staw wind farm near Gdansk, northern Poland, RWE's renewable power unit said.

The new capacity is due to become available in 2021 and its only source of funding will be the PPA.

"This is the first contract in Poland for purchasing energy from a wind farm, whose expansion will not be subsidised by government financing," it said.

Last year, Mercedes Benz signed the first long-term PPA with an existing RES project in Poland in with VSB Energie's 45 MW Taczalin wind farm to supply the car plant in Jawor.

-- Andreas Franke, andreas.franke@spglobal.com

-- Adam Easton, newsdesk@spglobal.com

-- Edited by James Burgess, newsdesk@spglobal.com