Wind energy development in Poland: history, main influencing factors and future prospects

Transcription

1 Wind energy development in Poland: history, main influencing factors and future prospects Katarzyna Michałowska-Knap Institute for Renewable Energy (EC BREC IEO) Warsaw, Poland

2 The current status of wind energy in Poland 124 MW of installed capacity, including 3 wind farms over 10 MW Approx. 0.08% of technical potential of wind energy already used In % of RES electricity generation 23% 12% 3% 4% 58% Biomass Biogas Wind Hydro Co-firing

3 The history - technology Several small wind turbines rated at 16 kw, 20 kw, 30 kw and 40 kw designed in IBMER, recommended for use on rural areas 160 kw wind turbine designed by NOWOMAG, installed in 11 locations mostly in Southern Poland. Some turbines this range of capacity of foreign producers installed (mostly for technology promotion) First installations of Megawatt Class wind turbines No significant manufacturing of wind turbines (some small-size) Equipment imported mostly from Denmark (most projects designed for Vestas WT s) Production of components (nacelles, tower elements), i.e. for GE Wind

4 The history strategy and policy Polish National Renewable Energy Strategy adopted by parliament; the national target for 2010 defined as 7.5% of primary energy consumption Quota mechanism defined on the level of the regulation of the Ministry of Economy, Lack of implementation programmes for specific RES technologies; Several changes in regulations Joining the EU; national target negotiated with EU as 7.5% of gross electricity consumption Amendment of Energy Law and related regulations, according to directive EC/77/2001 Amendment of Energy Law and related regulations, improvement of market mechanisms for trade of certificates of origin; Adopting of National Energy Policy till 2025; Report on Goals on RES share in Poland energy supply by 2010 Expected new amendment of Energy Law, and regulation of Ministry of Economy, change of quota obligation and balancing issues for wind energy

5 The history support schemes Feedin tariff 2000 Feed in tariffs, obligation for utilities to buy green electricity from sources <5MW, price same as for final consumers INVESTMENT SUPPORT Quota obligation Quota obligation +TGC Quota obligation (7,5% in final sale balance) for electricity suppliers and distribution companies, no strict penalty Obligation to achieve quota (7,5%) and to prove origin of electricity for suppliers and distribution companies, no strict penalty defined Obligation to achieve quota (7,5%) and to prove it (CoO) for electricity suppliers and producers (TPA), penalty defined 30%, introduction of biomass co-firing as eligible RET-E Obligation to achieve quota (7,5%) and to prove it (CoO) for electricity suppliers and producers (TPA), introduction of CoO (TGC) trade; penalty followed by voluntary charge for non-compliance (240 PL/MWh); biomass cofiring as eligible RET-E but demand for increasing of biomass use from energy crops and wastes by 2014; increased quota (from 7,5 do 9% in 2010), distribution companies obliged to buy physical green electricity by the market price of black electricity Increase of the quota obligation from 9% in 2010 to 10,4% (compliance with 2001/77/EC directive).

6 The TGC system in Poland, 2006 Price [PL/MWh] 400,00 350,00 300,00 250,00 200,00 150,00 100,00 50,00 Penalty, 130% of substitute fee Substitute fee, in PL/MWh + = 0,00 Electricity price (yearly mean balancing market price, in PL/MWh) CoO price - market related Total income of RES owner

7 Development of regulation of the Ministry of Economy on obligation of purchase of energy from RES up to 2014 Required % RES-E in electricty supply 10% 8% 6% 4% 2% 0% 2,4% 2,5% 2,65% 2,85% Under fulfillment 2003 (1,3%) Introduction of biomass co-firing with coal since ,1% 6,0% 5,5% 4,5% 5,0% 3,7% 4,2% 3,6% Over fulfillment ,0% 9,0% 9,0% 9,0% 7,5% 7,5% 7,5% 7,5% 7,5% 7,0% Strengthening of the original Decree ,0% Growing role of co-firing, competition between different RES technologies. Over-production of green certificates in 2005/2006 From 2007 plans of change of yearly quota levels (5.1% in 2007)

8 Installed capacity of wind energy, MW Wind farm in Tymie, 50 MW Expected 2006 May ,00 124,00 Under construction: wind farms in Gniedewo (22 MW) and Kisielice (40.5MW) Wind farm in Lisewo (8.4MW) Wind farm in Zagórze, 30 MW Wind farms in Barzowice (5MW) and Cisowo (18 MW) ,74 3,60 2,94 2,91 0,86 0,73 0,25 28,34 27,74 72,00 69,19 58,34 Most of currently installed capacity cumulated in 5 wind farms several problems occured for existing wind farms (balancing and forecasting request) From 2004 development of market for used wind turbines from repowering the refuse of many foreign developers from the Polish market, careful return from 2006

9 Location of main wind turbines

10 Wind projects in Poland, 2004 Source: Institute of Power Engineering, Gdansk GW of projects in different stages of preparation, 4.1 GW being concerned as feasible GW of projects reported by DSO s 2006 intensive activities of investors, developers and brokers on the Polish energy market Most of projects on very early stage of permitting procedure with many problems to solve before completing

11 The opportunity - wind resources Source: Institute of Meteorology and Water Management Resources concentraded on Baltic Sea coast and North-Eastern Poland, some potential on complex terrain on the South

12 Problems economic feasibility Until 2006 all major projects were completed with preferential financial suport (grants, loans), available preferential sources limited Requirements of the financial institutions to reduce the financial risk, no acceptance of TGC system by banks, request of long term contracts for TGC (possible, but prices to 30%-40% lower than stock exchange results) Growing prices of equipment on the EU market, long delivery times Location of the projects on areas with not favourable wind conditions, low production forecast Local tax (yearly to 2% of investment value) Difficulties in reaching the payback level requested by equity capital Lack of financial resources for project preparation phase The economic feasibility is now main factor blocking the implementation of completed projects

13 Problems grid interconnection Weak grids on some areas with significant wind resources, controversy about financing of necessary investment required for wind farms interconnection By current level of installed capacity no technical problems for TSO, but some local problems for DSO s, no more interconnection possibilities on some areas Some specific technical problems, i.e. location of most projects in the northern Poland causes the turning of usual electricity flow Limited possibiliities for transfer of electricity across the borders Requirements for individual investors to prepare the grid impact assessment on very early stage of project Unclear transmission issues, lack of regulations concerning balancing operating in construction with issued interconnection conditions with defined scope of interconnection expertise

14 Problems planning and environment Main wind resources concentrated on areas with high environmental value, with goals to dvelop tourism Lack of local building and development plans in most municipalities (long procedure of change) Public acceptance problems ( black PR cases) stoping permitting procedure Overlapping areas with the concentration of wind projects with Nature2000 areas Lack of public available information about wind resources and exclusion zones

15 The opportunities - National Energy Policy until 2025 and the 2010 target ,2 7,3 7,5% 7% Export-import Others Renewables Nuclear Naural gas Crude oil Brown coal Hard coal GWh of electricity from RES, where GWh is necessary to meet the target In report on Goals on RES share in Poland energy supply by 2010 Ministry of Economy expects in 2010 the 2.3% of gross electricity consuption will be generated by wind (corresponds to 2000 MW installed capacity)

16 Wind energy in Poland potential speed-up factors from 2007 Access to financial resources for the investment directly, as well as for grid development and strategic studies (structural funds - specific priorities in operational programmes ; incomes from penalties and substitute fees dedicated for RES development) Development of TGC market and related financial services, growing interest of banks and equity capital Limiting of competition between different RES technologies (lack of biomass resources for large co-firing development) Growing interest in Polish market by experienced investors (foreign and Polish energy companies, utilities) New quota obligation and development of TPA market growing demand for green certificates, more entities interested in the market Limitation of wind energy balancing problems specific balancing for wind energy allowed Growing experiences from wind farms operation, good practices to implement to avoid planning mistakes and environmental, grid and social problems

17 Wind energy in Poland summary Up to now the development of wind energy in Poland was slow and below expectations 2006 is a year of intensive activities of developers, but wind energy will not yet become business as usual, and there is very small amout of well prepared projects ready to implement For the moment wind energy is not able to compete with other technologies (especially large co-firing) Current support system generates problems for wind farm owners, financial closure of investment is a primary problem The market will change significantly in short-term perspective (refuse of weak developers, reduction of number of non-fesible projects, growing importance of strong developers supported with capital and collecting strong project portfolio) The significant increase of installed capacity may start from The significant influencing factor will be the national policy and attitude to the wind energy (stability of law conditions, public support to the investment, declaration of will to meet the national target)

18 Thank you for your attention More information on Polish RES market data on new EC BREC IEO website (since December 2006)