336MW solar PPAs highlight Polish market growth potential

LONDON (ICIS)–The announcement of 336MW in solar power purchase agreements (PPA) in Poland this week indicates investment interest in a market with untapped potential.

On 19 January Swiss energy firm Axpo via its subsidiary Axpo Polska, signed one of the largest solar PPAs ever concluded in the Polish energy market with local developer R Power for 300MW solar projects, set to come online in the middle of 2023.

Axpo will buy the full output generated by the solar plants between 2022 and 2026 and will act as the balancing agent for the project portfolio, said the firm in a statement.

Separately, the Norwegian state-owned company Statkraft signed a 10-year PPA for 36MW solar park in Poland with Danish producer Better Energy, said an official statement on 18 January.

The new solar park will bring subsidy-free solar power to Poland from 2023, added Statkraft.

PPAs are an alternative to tenders and subsidy schemes for funding the construction of new renewable capacity. In Poland, this type of agreement has mainly seen corporate involvement, reflecting a market largely driven by foreign investment.

The size of the two recent deals means that future installed capacity covered by Polish PPAs in January 2022 has already exceeded the 2021 total.

According to data on publicly announced deals collected by ICIS, during 2021 Polish PPAs were signed on a total of 223MW generation capacity.

RENEWABLE TARGETS

The Polish government’s energy policy until 2040 sets a renewable energy goal for 2030 of “not less than 32% in electricity consumption.”

The government strategy points to increasing installed offshore wind capacity to 5.9GW and reaching between 5GW and 7GW of solar generation capacity by 2030.

ICIS figures are less conservative with regards to both. Solar generation capacity would reach nearly 15GW in 2030, while offshore wind would reach 6.4GW, according to the Power Horizon 2030 model. This would lift the share of renewable generation within total electricity consumption to over 35%.

Polish electricity generation is currently dominated by fossil fuels with more than 70% of electricity being generated from coal.

Additional reporting by David Battista