POLAND Trends and Developments Contributed by: Tomasz Młodawski, Krzysztof Cichocki, Łukasz Wyszomirski and Krzysztof Fasula, Sołtysiński Kawecki & Szlęzak
Sołtysiński Kawecki & Szlęzak 26 Jasna Street 00-054 Warsaw Poland
Tel: 0048 22 608 70 00 Fax: 0048 22 608 70 01 Email: office@skslegal.pl Web: www.skslegal.pl
Introduction Poland holds a distinctive position in the European energy landscape. For decades, coal underpinned virtually every aspect of the country’s electricity sys- tem and accounted for more than 80% of domestic generation. This deep structural dependence on fos- sil fuels made Poland one of the most carbon-inten- sive economies in the European Union, and exposed Poland to risks arising from decarbonisation policies. That picture is changing fundamentally. Rising car- bon costs under the EU Emissions Trading System (a mechanism that puts a price on carbon dioxide emis- sions) and binding renewable energy targets under the Fit for 55 package (the EU’s plan to cut greenhouse gas emissions by more than half by 2030) have made coal increasingly uneconomical, and clean energy investments more attractive. Russia’s full-scale inva- sion of Ukraine in 2022 acted as a further catalyst: Poland banned Russian coal imports ahead of the EU-wide embargo, completed the Baltic Pipe gas interconnector allowing for gas imports from Norway, expanded LNG import capacity, and announced plans to deploy floating storage regasification units (FSRUs) – together, this positions Poland as a natural gas hub for Central and Eastern Europe, and reinforces the region’s independence from Russian energy supplies. The result is a country undergoing one of the most significant energy transformations in Europe, affecting everything from how electricity is generated to how it is transported, stored and sold.
Power Generation: A Changing Mix Offshore wind
Offshore wind is at the heart of Poland’s clean energy plans. In 2020, Poland passed a dedicated law to support the development of wind farms in the Baltic Sea. The law introduced a contract for difference (CfD) mechanism – a type of long-term financial support under which the government stabilises revenues for electricity produced. When the spot market price falls below that guaranteed level, the state pays the differ- ence. When the market price is higher, the operator returns the difference. This arrangement gives devel- opers the revenue certainty to secure financing for large and expensive projects. The first phase of the programme in the early 2020s allocated support for up to 5.9 GW of offshore wind capacity through individual administrative deci- sions. Several major projects secured support under this phase, developed by Polish energy companies – including Orlen, PGE and Polenergia – alongside international partners such as Ørsted, Northland Pow- er and Equinor. The most advanced of these, Baltic Power (developed by Orlen and Northland Power), began construction in 2024 and is expected to start generating electricity in 2026, making it Poland’s first operational offshore wind farm. The second phase works differently. Developers com- pete in auctions instead of applying for individual decisions. The first auction took place in 2025, and attracted significant market interest because offshore wind had been struggling in other parts of Europe, with projects being cancelled and growth forecasts cut. More auctions are planned in the coming years,
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