The Polish Energy Regulatory Office (ERO) has announced the final results of its solar and wind auction for projects above 1 MW and another procurement exercise for renewables up to 1 MW in size. The tenders were held on June 8 and June 11, respectively.
In the first of the two auctions, solar accounted for around 1.2 GW of the assigned capacity. Around 24.7 TWh of power was contracted in total, which is only 68% of the 38.7 TWh that the ERO had expected to assign. Around 300 MW of capacity was set aside for wind power projects.
In the second procurement exercise, all of the contracted capacity – around 1 GW – went to PV projects. The ERO revealed that all 1,264 submitted offers were for solar installations, and that 11.9 TWh was contracted across 1,016 projects, although it had planned to assign 14.7 TWh.
“Photovoltaics are replacing onshore wind farm projects,” the regulator said. “This situation is obviously caused by legal barriers to the development of wind energy.”
It referred to provisions introduced in 2016 that stipulated that wind turbines must be located at distances from communities equal to at least 10 times their height.
The authorities did not provide details about final auction prices.
“The high amount of projects submitted in the auction for smaller projects resulted in a competitive price of energy, which is essentially lower than current market price on the Polish wholesale market,” Piotr Pająk, a renewables reporter for the Gramwzielone website, told pv magazine.
Pająk said it was predictable that wind would lose its share of projects over 1 MW in size.
“We knew there would be less wind projects on the wind market due to prohibitive distance rule, but the disproportion is quite impressive,” he said.
He said that auctions might become less interesting for PV and wind investors due to rising energy prices in the Polish wholesale market.
“It means more investors in the future may resign from the support scheme and try to secure higher returns through PPA or on the spot market, especially for large-scale PV projects,” Pająk explained. “We also notice first business models that include a mix of both auction schemes, which may be important for banks, and sales of energy on the market.”
In the last auction for projects over 1 MW, held in December 2020, solar accounted for roughly 800 MW of the allocated power. Overall, the ERO allocated approximately 1.7 GW of renewable energy power generation capacity in the auction, including about 900 MW of wind power. The lowest auction price bid was PLN 190 ($50.30)/MWh and the highest bid came in at PLN 249.90.
The last procurement exercise for projects not up to 1 MW in size also resulted in PV securing all the allocated capacity of 700 MW.
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