PGE power would need PLN 180 bln outlays for 7 GW of offshore wind farms

If listed power utility PGE was to realise its entire investment portfolio in offshore wind farms, this is 7 GW, outlays in the amount of PLN 180 billion (EUR 42.2 bln) would have to be incurred, PGE's representative Michal Kuzniewski told the parliamentary subcommittee. He reminded that PGE, together with wind power lobby PSEW, has requested an increase in the maximum price in the planned auction for offshore.

During a meeting of the lower house of Polish parliament Sejm's subcommittee on critical infrastructure, mining and energy, the head of PGE's investment analysis department Michal Kuzniewski mentioned the PGE Group's offshore wind farm programme as the flagship investment programme.

"The total capacity of offshore wind farms for which the PGE group has obtained a permit to build artificial islands is estimated at over 7 GW, and the first energy from the Baltica 2 offshore wind farm with a capacity of 1.5 GW will already flow into the grid in 2027," he said.

Kuzniewski added that PGE Group's entire project portfolio of 7 GW would see offshore wind farms generate around 28 terawatt hours of energy per year, reducing the amount of coal needed to be burned by 13 million tonnes if that amount of energy was generated in coal-fired units.

"Investments in offshore wind farms are very capital-intensive investments. If we were to realise the entire investment portfolio of 7 GW of offshore wind farms, an expenditure of PLN 180 billion would be required," he continued.

"In order to finance such large investments, it is necessary to obtain debt financing in the project finance formula - the balance sheet of no company in Poland can currently handle this," PGE's representative added.

As he noted, for such large investments it is necessary to obtain an appropriate level of operational support, this is support in the form of contracts for difference guaranteeing profitability of the investment.

"For this reason, the PGE Group, together with the wind power lobby PSEW, has requested an increase in the maximum price in the planned auction for offshore wind farms so that these investments can be realised and our entire portfolio of investments in offshore wind farms can come to fruition and serve to reduce the demand for fuel for energy production and supply clean energy to the system," Kuzniewski stressed.

The Ministry of Climate and Environment recently proposed a maximum price of PLN 471.83 (EUR 110.69) per MWh for offshore for future Poland's energy market regulator URE auctions. PSEW included a value of PLN 550-600 (EUR 129.03-140.76) per MWh in its analyses.

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