Polish Power Grid Chief Urges Pause to Costly Offshore Wind Energy Expansion
(Bloomberg) -- Poland should prioritize cheaper land wind energy over offshore projects to stay competitive in the global economy, according to the head of the country’s power grid operator.
The European Union’s most coal-reliant state would be better off putting its ambitious offshore plans on the backburner until the potential of onshore turbines is fully unlocked, Grzegorz Onichimowski, chief executive officer of state power grid PSE, said in an interview.
His comments align Poland with a cooling sentiment in the European offshore industry, following failed auctions in Germany and Denmark within the past year due to rising costs.
“Why hurry? First we need to unlock the onshore wind energy, which will show us how much offshore wind we really need,” he said.
The stark warning comes as Poland is gearing up for a December 17 tender to grant contracts for another 3 gigawatts of offshore capacity. Maximum prices are set between 486 zloty ($134) to 512 zloty a megawatt hour, significantly higher than current exchange levels with taxpayers poised to cover the gap.
“Even if the final prices are below the maximum limits, they will still be much above the market,” he said. “This is not a contract for difference, this is a mechanism of stable subsidies.”
Onichimowski suggested the auction should ideally be postponed, though he acknowledged projects are already at advanced stages.
Across Europe, offshore wind is seen as a crucial part of the continent’s transition away from fossil fuels, but steep price increases for materials like steel as well as higher borrowing costs in recent years have forced governments to ramp up subsidies to ensure the projects are delivered.
Industrial Woes
Poland’s preliminary strategy targets 18 gigawatts of Baltic Sea wind power and 35 gigawatts of onshore wind by 2040 as the nation phases out coal plants that now produce more than half of its electricity. Wind generation accounts for roughly 15% of the total power mix.
However, expansion on land has stalled since 2017 due to restrictive distance regulations. While Prime Minister Donald Tusk has promised to speed up onshore development, necessary regulatory changes are still pending. Tusk came to power two years ago with a pledge to accelerate transition into green energy sources, arguing that affordable power could fuel Poland’s future economic growth.
First movers in the country’s offshore sector, including Orsted AS and Northland Power Inc, are already constructing farms with a total capacity exceeding 4 gigawatts, with operations slated to begin next year.
For Polish industry, the stakes are high. Producers have long appealed for relief from soaring energy prices driven by coal dependency and distribution costs.
PSE’s Onichimowski warned that inefficient spending on grid or generation assets that remain idle will double the financial blow, putting Poland at a disadvantage against developing economies.
“Every zloty we spend unnecessarily, every stranded cost we create by excessive investments, will hit us twice as hard,” the CEO said. “The global competition will be lethal and it’s already visible today.”
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