Poland appears to have achieved limited success implementing the results of its first solar energy auctions, according to Polish research institute the IEO.
The Photovoltaic Market in Poland 2019 report published by the organization states three renewable energy auctions for projects up to 1 MW in capacity between the end of 2016 and November allocated approximately 870 MW, with 360 MW of capacity awarded in the first two exercises. Of the latter figure, however, only 36% of project capacity is currently online, according to the IEO.
The report’s authors say, of the 73 projects totaling 68.4 MW of capacity which were assigned in the first auction in late 2016, only 55 schemes – 52.5 MW of capacity – were finalized, with the remaining 16 MW unlikely to see the light of day as the deadline for project completion passed at the end of last year.
As for the second auction, held in June 2017 and which allocated around 290 MW, only 94 PV projects with a combined capacity of 75 MW have been finalized, despite a completion deadline at the end of June. That represents a figure of only 26% of total capacity being brought to fruition thus far.
The report’s authors added, projects from the third auction, held in November, have until May 2020 to attain grid connection.
Poland’s third auction for renewable projects up to 1 MW in size resulted in a final price indicating a form of equilibrium. In November’s first mixed wind and solar auction for large-scale projects, all the contracted power went to wind projects.
Access to financing
One of the main issues for the development of auction projects, the IEO reported, is access to financing, although the authors say Polish banks are becoming more accustomed to such applications. “Currently, banks are much more positive about new solar projects, which they believe currently show less risk than two years ago due to the improvement of the rules on granting public aid in the auction system,” stated the report.
Rising confidence in solar is also being helped by falling project costs in Poland. According to IEO analysts, building a 1 MW solar system cost around PNL4 million ($1 million) in 2017. The same system now may cost only PNL3 million, or less.
That would translate into investment of around PNL5 billion for the three auctions held to date plus another planned this year, the report stated. However, streamlined administrative and supply chain business processes would be required to hit that goal, the analysts said.
A year ago, PV association the Polskie Towarzystwo Fotowoltaiki warned a recently introduced system of discounts made the auctions less attractive for investors.
In a previous report, the IEO had predicted Poland would reach 1.2 GW of installed PV capacity by the end of next year as a result of the three auctions. At the end of last year, Poland’s cumulative installed solar capacity had reached 486.5 MW.
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