Green Genius invests in Polish solar amid coal phaseout plans

– Green Genius to develop 154MW of solar PV farms in Poland by 2022

– Solar capacity in Poland expected to rise to 10GW by 2030

– Government plans for coal plant closures expected to accelerate

LONDON (ICIS)–Renewable energy company Green Genius has announced plans to develop 154MW of new solar projects in Poland by mid-2022 worth €100m.

According to a recent blog post by the company, 122MW were secured under the 2020 and 2019 renewable auctions through 15-year subsidised production contracts. The remaining 32MW are to be sold at market conditions, likely through bilateral PPAs.

While the amount of capacity added is not expected to make a major dent in the market, it highlights a larger growth trend tied to government subsidies and PPAs taking hold in Poland.

According to the Polish regulator URE, 800MW of photovoltaic installations are expected to be built in Poland as a result of the auctions conducted in 2020 alone.

WIDER MARKET TRENDS

Green Genius’s announcement comes shortly after the Polish government released a strategy for increasing the amount of solar capacity in the country’s generation mix to between 5 and 7GW by 2030.

According to ICIS figures, solar PV capacity amounted to 1.73GW in 2020, while ICIS’s Power Horizon forecasts expect solar generation to reach over 10GW in 2030.

This comes at a crucial point in the development of the Polish power sector, as the government’s strategy explains that the pace of coal plant shutdowns is likely to increase both due to a policy push and because of increasing costs of emission allowances. This is likely to leave a significant gap in the Polish supply balance that the emerging solar sector may be able to take advantage of.

Data from ICIS forecasts predict coal’s share in the electricity mix is to fall from current levels above 74% to roughly 38% by 2030 in line with the new Energy Strategy. According to local media reports, the coal mining industry extended losses €15m in 2019 to 2020’s €857m, amid a significant drop in demand caused by coronavirus lockdowns.

But coal has historically been a politically charged commodity in Poland and phasing out its production is not likely to be a smooth process. Coal mining unions have announced plans for industrial action in recent weeks prior to the release of the government strategy. The government and coal unions are expected to agree to a “social contract” within the first half of 2021 clarifying any new changes to the mining sector.

POLISH SOLAR DEVELOPMENTS

When added to the 86MW Green Genius sold to the Scottish fund Aberdeen Standard Investment and to the 2.2MW developed for the company Ferrero’s manufacturing plant in Poland, Green Genius’s plants are expected to make up 242.2MW or more than 8% of total solar PV capacity in Poland in 2022, according to ICIS’ estimates.

Green Genius plans to implement not only the projects won at auctions, but also to develop solar power parks and to sell electricity to businesses or the power exchange under market conditions, according to CEO Ruslan Sklepovic “Many large companies operating in Poland are already interested in the possibility of buying green energy from such parks. We intend to pay more and more attention to this area,” Sklepovic said. The company has also developed a solar portfolio in other CEE/SEE countries, with 450MW planned in Hungary and Romania.

In a parallel development, Green Investment Group fund owned by Macquarie has also recently announced its intention to develop solar power plants in Poland. A new entity will be created called Cero Generation to develop photovoltaic farms with a total capacity of 8GW across the UK, Spain, Italy, France, the Netherlands and Poland, though exact capacity amounts are not yet known.