Tuesday, 30 March 2021
According to the Polish TSO, Polski Sieci Elektroenergetyczne (PSE), as of 1 February 2021 the installed capacity in Solar PVs was 4 088.9 MW while a summary done by the Polish Institute for Renewable energy (IEO) revealed that by the end of 2020 the installed capacity of solar PVs was 3 935.74 MW and represented a 200% increase during the year and an almost 4% growth in 2021 thus far. According to the IEO, this places Poland in 5th place in the EU in terms of growth in new PV capacity.
Since the accession of Poland into the EU back in 2004, its renewable energy sector has experienced rapid growth. In 2004, only 2.1% of electric power production in Poland came from renewable sources, mainly hydro and solid biofuels. In 2019, the RES-E share grew to 16% of net generation to 20.4 TWh. The impressive development can be partly attributed to the renewable energy support schemes in Poland. They include preferential grid connection for RES-E, feed-in-tariff (FiT), feed-in-premium (FiP), auction, tradeable green certificates, and more.
As per data from the PSE, in 2020 the share in the types of solar PV installations remained unchanged with 75% being micro-installations <50kW and PV farms making up 21% (842.4 MW) of installations last year.
A breakdown of the 2020 statistics are as follows:
PV micro-installations of <50kW had a total installed capacity of 2 973.7 MW.
Small PV installations (50-500kW) had a total capacity of 67.4 MW
Auto consumer installations (large corporations that self-produce electricity) had a total installed capacity of 124 MW.
PV installations of >500 kW, which were largely created as part of the system of certificates of origin - were estimated to have an installed capacity of 75 MW.
PV installations built as part of the RES auction support system had installed approx. 700 MW- most of which were 1 MW.
According to IEO, the largest increase was witnessed in PV micro-installations meaning there has been rising interest from individuals and corporations which was driven by subsidy schemes like the 'My Current' program within the country. They contributed to the total trade turnover of the industry by nearly PLN 8.4 billion, which accounted for approximately 80% of all turnover on the photovoltaic market in 2020. The second-largest segment according to the share of installed power in Poland was from PV farms.
The IEO forecasted installed power in Poland to 2025 and predict that in 2021 progress in the PV market will continue its upwards trajectory. They estimate that the country will see an increase of 2 GW of new PV installations in 2021. Furthermore, they believe that this growth will be due to prosumers, driven by the national subsidy scheme called My Current program which according to the Ministry of Climate will run till mid-2021.
Meanwhile, they also see major contributions from large PV farms as 2021 is the year of implementation of investments from the 2018 and 2019 Polish RES auctions (the investment deadlines had been extended due to the COVID pandemic). According to the IEO, at the end of 2021, almost 6 GW of photovoltaic installations may already be in operation in Poland.
The IEO has forecasted that in 2022 and 2023 the share of PV farms in the total installed power will be equal to the share of micro-installations. In 2024, they predict that PV power will reach almost 13 GW while in 2025, they believe the total installed PV power could reach 15 GW.
Polish Guarantees of Origin market
The GO market in Poland has grown fast, characterized by a monthly trading volume of about 1.5 TWh, low prices (ca. 26 Eurocent/MWh), and high volatility. In fact, the Polish GO legislation is liberal, with no restriction on subsidized production or imports/exports. The Polish registry has also promoted the GO system by reducing the fees on several occasions. This has made the Polish GO market quite an attractive market over the years.
In 2019, RES-E production was 24 TWh and counted for 16% of Poland’s production mix. Although there are no limitations on eligible RES-E production to receive GOs, 13.6 TWh was cancelled during 2020, counting for almost 60% of the RES-E production in Poland.
Compared to the GO markets among AIB countries, the Polish renewable GO prices were relatively low and volatile. In the last 5 years, the monthly weighted average price ranges from 0.01-1.49 PLN/MWh, i.e. 0.23 to 32 Eurocent/MWh, excluding fees. The monthly transaction volume ranges from 0 to 6 TWh. In January 2021 Polish GO prices fell to a little over 16 Eurocents/MWh.
In a webinar hosted by Energy Post on the role of the EU ETS in decarbonisation to 2030, the Polish government had mentioned plans related to its National Energy Policy to build 40 GW of new renewable sources in the next 20 years. Furthermore, Wanda Buk, VP of the management board at PGE the largest energy utility in Poland also revealed that by 2030 PGE plans on expanding its RE sources by almost 7 GW:
2.5 GW in offshore wind expansion
3 GW in Solar PV installations
Expand onshore windfarms by at least 1 GW
However, both the State and PGE stressed that current EU financing mechanisms were not sufficient enough to reach decarbonisation goals. PGE further emphasized that rising carbon costs do not always translate into increased RE investments but can sometimes hinder RE expansion. According to Wanda, last year alone PGE spent 1.1 billion euros on EUAs which has allegedly hindered their progress.
That said it is clear that Poland is becoming a rising star in the EU and will play a major role not only in the energy transition but even in the GO markets. As RES-E installations continue to increase, Polish GO issuances will likely follow, and with the liberal structure of the country's GO legislation, we can predict that there will be a continued growing demand for Polish GO products.