Poland's eco ministry seeks to amend act on offshore wind auctions

Poland's Ministry of Climate and Environment (MKiS) has proposed to amend the act on offshore wind energy auctions by introducing separate maximum prices instead of a single one for different areas.

So far, the so called Offshore Wind Act provides for indicating a single maximum price in the bids submitted in the auctions expressed in Polish zloty per 1 MWh, which is set by the minister for climate in consultation with the minister of state assets.

Setting different maximum prices will allow for more accurate characteristics of offshore wind farm projects, while minimising costs for end users, the ministry noted in a publication on Monday.

The areas designated for offshore wind farms are diverse in terms of geophysics or distance from the shore, which affects the costs of construction and operation of these facilities, the ministry added.

As the authors of the project point out the function of the maximum price is to limit offshore wind farm projects with excessively high costs while ensuring an adequate supply of projects that will be able to take part in the auction.

If a single maximum price is established for all highly diversified projects, it is "highly probable" that projects from areas with higher costs will not participate in the auction. This may limit the number of projects to be implemented as well as affect the lack of a minimum of three offers within a given auction, the environment ministry added.

The ministry noted that specifying only one maximum price sufficient to cover the costs of offshore wind farm projects, may lead to less cost-intensive projects submitting higher price offers than if the price was adjusted to the areas, and as a result, they will receive unjustified support.

The government is expected to adopt the draft in the fourth quarter of 2024, the ministry added.

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