Wind Projects
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Investors' interest in wind projects in Poland versus 10H Act

The latest IEO data indicate that the entry into force of the so-called 10h Act has essentially blocked the development of new wind energy projects in Poland. Since the Wind Power Investments Act, which requires the location of wind turbines at a distance of not less than 10 times their total height, went into effect in 2016 practically no completely new green field wind project has received a building permit. Projects only change their owner, sometimes insignificant changes are made to them, which only statistically confirm that the development activity is continued.

It can be noted that only those wind farm projects that obtained a building permit before the restrictive regulations came into force had a chance to be implemented (from the stage at which they had been in 2016). Only these investors have a chance to develop these projects using 15 years of support from winning RES auctions.

A common question asked by market participants is how many potential wind projects with a valid building permit can be submitted to this year's auction? Has the wind energy market been completely blocked?
Answers to these and other questions can be found in the latest August update of the Wind Projects in Poland database by the Institute of Renewable Energy (IEO).

According to the IEO, there are still 1.4 GW of wind projects on the Polish market with a valid building permit obtained before the entry into force of the 10H Act. This year's auctions are the last call for these projects to obtain financial support and to complete the investment process within the auctions. A large auction for wind and photovoltaic projects above 1 MW is planned for this year, in which 1.5 GW of wind and photovoltaic farm projects will get a chance to receive government support. So far, in two RES auctions (in 2018 and 2019) for large farms, wind projects with a total capacity of about 3365 MW have won, of which over 2 GW of projects are under construction.

The situation is slightly better when it comes to the successful application for connection conditions.  In the Wind Projects in Poland database, wind projects with a total capacity of 7.68 GW have connection conditions issued.

Despite the stagnation in applying for new building permits, the projects are at various stages of progress. Some have already participated in auctions in 2018 and 2019, and those with "old" building permits are likely to participate in this year's auction. However, this is not the case for projects whose owners did not manage to obtain a building permit before 2016. On the Polish market, such projects, which have only grid connection conditions issued, are almost 3.2 GW. In the last three years, developers have been active in obtaining connection conditions. New connection conditions received both - projects with old building permits, as well as new projects. In 2020, 23 projects with a total capacity of 261 MW received connection conditions.

The largest capacity of wind projects is still present in the Pomorskie, Zachodniopomorskie and Wielkopolskie Voivodeships. In these voivodeships there are 57% of wind projects, while in eastern Poland the development activity has practically ceased.

A waste of the industry's potential and capital committed is the lack of developers' efforts to obtain a building permit for some projects with already issued grid connection conditions despite the 10h Act. In this group of projects with the capacity (according to the IEO database) of 1.8 GW you can certainly find those that will meet the 10H rule using the latest technologies. Smaller projects (several MW) consisting of new, efficient turbines, economically still win with photovoltaic projects in auctions. They can be implemented in the PPA formula, or in a self-producer's business model, where they could work better than photovoltaics. The under-use of this potential and the capital already committed is difficult to understand from an economic point of view, even if the industry is waiting for the 10H rule to be unblocked. The most regrettable thing is the time that is escaping, which is objectively the best for developed wind energy technology. -  Grzegorz Wiśniewski, CEO of Institute for Renewable Energy.

We invite you to learn more about the IEO database "Wind projects and RES auction winners Database - August 2020".
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