Sea Wind Group invests in renewable energy projects worldwide. Its operating companies, Sea Wind Polska Sp.z o.o. (SWP) and Sea Wind Management GmbH are experts for developing offshore wind projects from early phases. As part of the Sea Wind Group’s expansion into new markets, SWP was founded in 2018 with its office in Gdynia.
Can you please provide a brief overview of the projects you have planned in the Baltic Sea and the milestones achieved to date?
We are currently performing green field project development activities for offshore wind farm (OWF) projects in the Exclusive Economic Zone of the Polish Baltic Sea. For several projects, applications have been prepared and provided to the relevant authorities. Until now the applications have been registered and the next target is to receive area permits for these projects.
Any successful OWF projects will then be continued and developed. The next project milestones will then include to obtain an environmental decision and ultimately to receive a building permit followed by a positive investment decision. Along the OWF project development, environmental investigations, a wind measurements campaign, geotechnical investigations and preparing technical design documentation will be conducted.
We are also establishing a comprehensive overview of the Polish supply chain, the available infrastructure, the relevant ministries and authorities and the regulatory framework in respect of OWF development. The idea is to share our experience from other offshore wind markets.
How do you expect the offshore wind sector to evolve in Poland in the coming 3-5 years?
The Polish government has identified offshore wind energy as one key resource to implement higher levels of renewable energy in the national energy mix, that may also help fulfill requirements coming from the European Union.
The offshore wind market currently sees high activity by Polish and international investors due to the fact that all project developers with advanced projects are seeking for financial partners preferably with in-depth experience in the construction and operation of offshore wind parks.
In spite of this interest, we don’t expect the operation of the first commercial OWF in Polish waters before 2026.
What are the challenges that stand out in your view?
Up to date, the market is waiting for two important regulatory instruments for the development of offshore wind in Poland. First, in January 2020 the Polish Ministry of National Property has published the draft for a legal act for offshore wind energy. The aim of the Act is to set up a support mechanism, describe the local content requirements, issues related to the process of obtaining permits (permitting process) and the connection to the grid.
Secondly, on behalf of the Ministry for Maritime Economy and Inland Navigation, the Maritime Offices in Sczczecin and Gdynia are preparing the final revision for a maritime spatial plan (MSP), which is expected to be published in Q1-2021. For new offshore wind developments that have no area permits so far, it is essential to know which areas could be used for implementing OWFs in Poland.
These two instruments will no doubt give investors comfort. Further key challenges will be grid connection, environmental impacts, military issues and implementing a local content strategy.
Can you expand on the state of infrastructure and what is missing for a smooth integration of offshore wind energy in the national power system?
In general, Poland is facing the same challenges regarding the grid connection and power distribution as Germany. Renewable offshore wind energy, including offshore wind energy produced in the North of Poland, needs to be transferred to the main industrial energy consumers in the Southern part of the state.
The power grid along the coast has sufficient free capacity to accept at least the electric power from a first OWF. However, the grid will have to be improved and expanded in order to carry and distribute the expected capacity of up to 10 GW offshore wind energy. Medium and long-term investments must be made in the electrical infrastructure in order to meet the targets.
We are observing that every project developer, including Sea Wind, is currently planning its own grid connection. From the point of view of the project developer, this is an acceptable way, because it provides control and planning security. However, from an economical and likely from an environmental point of view, this it is not the best solution. One grid connection per single OWF project will create an undesired large number of cable corridors, both offshore and onshore.
Do you already have a sense of how the COVID-19 outbreak will be impacting your business/the energy sector in the short term?
The corona crisis will leave its mark on the energy sector. As a result of falling energy prices and raw material costs, we expect effects on the renewable energy sector. In the meantime, in Poland and other European countries, energy sales have decreased significantly due to reduced energy consumption and energy prices have fallen on the wholesale energy markets. All in all, the situation in the industry is becoming increasingly difficult.
In their economic forecasts the economic research institutes assume a shrinking economy in 2020, but also expect a recovery in the following year. There are great uncertainties about the duration of the recovery process, which will have a strong effect on the recovery of energy consumption.
The recovery of the economy is immensely important for the investment activities and the expansion of renewable energies. A slow or a partial recovery of the economy may jeopardize the desired environmental policy goals.
What first measures did you set in place to manage the crisis?
Since the beginning of this year, the corona virus outbreak has had a firm grip on our world and our daily lives. Much of the global economy is at a standstill and we are asked to stay home, wash our hands, and keep our distance. Most of our colleagues and teams work at home or in different locations, and we adjusted our ways of communications and for doing business.
Other thoughts you would like to share regarding this topic?
Thanks for asking this question. At times of crises it is important to help each other in various ways and individuals can make a difference. For example, in order to buffer the financial burdens to people close to our businesses due to the corona crises, Mr. Kaiser, owner and Chairman of Kaiser Partner and key shareholder for the Sea Wind investments, just recently launched a private aid program called SMILE valued at 1 Million Swiss Francs.
I wish you and your families good health and a few good reasons for a warm smile in times of social distance.