Interview | Michal Michalski
CEO
Polenergia

24 January 2020

Polenergia was formed in 2014 and stands as the first Polish private group in the power industry made up of vertically integrated companies. Their work includes power generation from conventional and renewable sources, as well as electricity trading and distribution. Together with Equinor, they will be among the very first companies to develop offshore wind farms in Poland.

From a generation perspective your activity is very well diversified, including gas, wind, solar and biomass. Can you explain how the various technologies contribute to the company’s final output?

Our goal is to achieve a generation mix which is consistent with the structural generation we expect to see in the overall market in the future. We focus primarily on three technologies - onshore and offshore wind, and photovoltaics. In addition, because RES cannot emit steam or heat, we are also looking at cleaner than coal solutions which include natural gas and hydrogen installations. What guides us is the assumption that CO2 emissions are damaging and need to be reduced as much as possible.

 

The wind projects you are developing offshore are the most advanced in Poland. What did the company do differently compared to other players in the market, that allowed you to take the lead?  

Polenergia distinguishes itself from other players in the market in that we believe in our vision and are willing to take risks. This approach has allowed to take the lead offshore and advance projects farther than our peers.  We are also lean in terms of our management structure, that is to say we do not have bureaucratic practices in place and our decision making processes are very quick. 

 

Often times companies start operations only after everything is clear and all permits are granted. But this approach puts a company within the wave of everyone else. If you want to take the lead, you have to anticipate what the future holds.

 

What is the current situation of these projects, how advanced are they specifically?

We have three offshore sites in total, two of which are already pretty well advanced. I am referring to Baltyk II and Baltyk III, with a joint capacity of 1,44 GW. 

Specifically, we have signed the connection agreements with the TSO, obtained environmental permits and we have all rights of way for the export cable (both the offshore and onshore section); we also completed wind measurements and an initial geotechnical campaign. Just now we are in the process of preparing the initial wind farms design, which we expect to have ready within the first quarter of 2020.  

2025 is when the first offshore production is expected. Is this a plausible scenario, or are there factors that could delay this term?

If I were to make a top ten list of items that are needed to meet this expectation, eight of them would probably be linked to the offshore law. The good news is that a draft of the law has already been published, and is anticipated to be passed through parliament in Q1 of 2020.  

 

Without a subsidy system we cannot progress as planned - no one globally has done offshore projects using the merchant approach.

 

How do you assess the government’s attitude towards offshore wind, are they open to understand and address the industry’s needs?

Over the past 18 months there has been good evidence that the Polish government is open to collaborate. They listen to issues raised by the industry, and communication has been overwhelmingly productive.

Offshore energy production is completely new for the Polish economy. Are you finding it difficult to identify the necessary workforce and skills?

Indeed, offshore technology is new to us all. This is why we decided very early on to join forces with a partner, Equinor. As a company we understand the Polish market very well, and Equinor has tremendous understanding of offshore technology and how to best apply it. We are extremely satisfied with this partnership so far. 

 

Poland’s economy has gone through uninterrupted growth and everything seems to indicate that this trend will continue for years to come. Upgrading the country’s generation base will no doubt present its set of challenges, but I trust it will also open a wealth of opportunities.

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