Poland Takes First Steps To Transition To Renewable Sources
According to the World Health Organization, 33 out of 50 most polluted European cities are in Poland, mostly due to coal burning. Currently, the majority of Poland’s electricity (93%) is generated from coal-fired thermal power plants.
The situation is about to change – since Polish government is interested in meeting the EU greenhouse gas emission targets (20% of energy should come from renewable sources by 2020), it established renewable auctions to encourage the sector’s growth.
The biggest share (15%) of the Polish solar energy market has been just acquired by Sun Investment Group together with partners E-Energija and I+D Energias.
Sun Investment Group have purchased projects that have secured 15-year CfD tariffs via official public auctions, with plans to invest a total of around 40 million euros in building the solar plants.
A 42 MWp portfolio of solar projects with a contract for difference was secured under Poland's current support system for renewable energy. Sun Investment Group plan to expand their Polish portfolio up to 250 MWp by the end of 2020.
The company stressed Polish government’s support as one of the crucial factors in their decision to invest in Poland’s solar energy.
“An investor who wins the auction knows the price that will be paid for the energy produced by his plant, and this price will remain stable for 15 years. This support scheme is regulated by the state, which reassures investors and takes away uncertainty and high risk," said Sun Investment Group CEO Deividas Varabauskas. “The state evaluates its financial capabilities and controls the situation, avoiding the bubble of growth. Besides, state-organized auctions allow to measure the interest in the market and determine the right price to be paid to energy producers: if participants of one auction significantly lower the price, the price ceiling of the next auction will be lower."
Managing Partner at Sun Investment Group, Andrius Terskovas, explained that “Poland is still a niche market, but we see it as an opportunity to grow our business from medium-sized to a big player. We see our future in Poland as a long-term investor. It requires a lot of work to create an attractive portfolio, because the market is still quite segmented, but for us, the risk is spread out as we will be taking on the development of many smaller projects."
In Western European countries like France, UK and Germany, the share of solar PV is 2.5%, 3.6% and 6.1% respectively in total energy mix. To reach at least the level of France, i.e. 2.5% share of solar in the energy mix, Poland would need to have 3.5GW of solar energy. As solar energy plays crucial role in the total energy mix, this is a minimum number to be achieved - if not by 2020, then in the upcoming years.