More chances for solar in Polish large scale renewables auction

The advent of permitting restrictions on wind power projects has opened the door for PV in the pending auction for renewable generation facilities with a capacity of more than 1 MW. Wind power dominates Polish clean energy and no solar projects were successful in last year’s exercise.

When Poland staged a renewable energy auction in November for facilities with a generation capacity of more than 1 MW, wind power projects took all the contracts, for final electricity prices ranging from PLN157.80-216.99/MWh ($39.60-54.46)

To triumph, wind had only to undercut rival renewable solar, as had been predicted in a simulation carried out by the Polish Wind Energy Association, auditors PwC and law firm K&L Gates. The model predicted solar electricity price bids would range from PLN350-411/MWh whereas wind could reach PLN225-350.

It may be a different story this year, though. Most of the 7.46 GW of wind power capacity which has secured grid connection approval, according to the Polish Institute for Renewable Energy (IEO), was allocated in 2016, just before the Polish Renewables Act was revised to stipulate wind turbines be located a distance equal to at least ten times their height from communities. The Polish Wind Energy Association says that measure rules out onshore wind in almost 99% of the country.

Hope for solar

With only 2.5 GW of that 7.46 GW wind capacity figure having secured construction permits, solar developers can see an opportunity to secure at least some of the 15-year power supply deals on offer in the next auction.

With the latest procurement round expected to allocate up to 2.5 GW of new renewables capacity, some of the permitted wind power capacity may now be unviable, or at least may experience difficulty raising finance. By contrast, the IEO says solar is on the rise with 1.4 GW of generation capacity given grid approval and 650 MW of projects holding building permits.

“Perhaps, therefore, such a large contracted capacity for this auction will open up opportunities for large solar projects and give them a chance to compete with wind projects,” stated IEO analysts.

Small scale success

And PV has enjoyed success in the small scale tenders held for projects with a generation capacity no larger than 1 MW. In the three tenders held between 2016 and last year, 990 solar projects with a combined capacity of 900 MW were selected. In the latest auction, in November, 554 solar projects were approved securing 8.169 TWh of power will be sold for PLN2.2 billion ($580 million). The lowest final electricity price, which does not include tax on goods and services, was PLN288.99/MWh and the highest tariff reached PLN364.99.

In the second small scale renewables auction, in June 2017, the Polish government contracted around 4.725 TWh of power. The lowest electricity price bid in that tender was PLN195/MWh and the highest PLN398.97. The first auction was held in late 2016 and saw 84 projects awarded, most of them PV. A ceiling price for PV electricity had been set at PLN465/MWh and the highest solar bid was PLN408 with the lowest PLN253.5.

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