The European Commission (EC) has approved a €1.2 billion (US$1.32 billion) state aid package for Poland to support the deployment of electricity storage facilities. Contact online >>
The European Commission (EC) has approved a €1.2 billion (US$1.32 billion) state aid package for Poland to support the deployment of electricity storage facilities.
The EC, the administrative and legislative governing body of the European Union (EU), announced the scheme’s approval yesterday (3 October).
It will provide direct grant and loan funding worth up to 65% of the capital cost of ''at least 5.4GWh'' of investments in electricity storage projects across the Eastern European country.
The capacity market was a major topic at the recent Energy Storage Summit Central and Eastern Europe 2024, which our publisher Solar Media hosted in Poland''s capital Warsaw, in late September.
The new scheme falls under the EC''s Temporary Crisis and Transition Framework (TCTF), which was introduced in response to the Russian invasion of Ukraine to enable affected EU Member States to bolster their economies.
TCTF focuses on energy transition efforts, and aid will be available for states to grant until the end of 2025 for measures to support the energy transition in three key areas: accelerating the rollout of renewable energy, facilitating the decarbonisation of industrial processes, and accelerating investments in low-carbon technology manufacturing.
Funding for the scheme in Poland will come from two sources: the EU''s Modernisation Fund, paid out to 13 Member States for modernisation of their energy systems in line with EU targets, and from the EU Recovery and Resilience Facility.
It follows a similar amount of state aid funding being made available for energy-intensive industries in Poland struggling with rising energy costs, approved by the EC around the same time last year.
The electricity storage support scheme aims to facilitate the reduction of fossil fuel use and the increased penetration of renewable energy on the Polish grid.
Systems with 4MWh capacity or higher will be eligible, connected to either transmission or distribution networks at all voltage levels.
Grants and loans combined should not exceed 45% of the cost of each project; however, for medium-sized companies, this could be extended to 55%, and small companies could receive aid worth up to 65% of capital investment costs.
Over the last year or so, the European Union has approved state aid schemes to support energy storage deployments in countries.
These include a €103 million package of direct grants in Romania in March 2023, €150 million for renewables and storage in Slovenia and €1.1 billion for Hungary a couple of months later. In December 2023 a €17.7 billion package in Italy toward the development of more than 9GW/71GWh of storage that the country''s transmission system operator (TSO) TERNA has identified the need for was approved, and earlier this year a €1 billion scheme in Greece to support renewable energy and storage got the go-ahead.
Yesterday, ESN Premium published an interview with Jan Kloczko of independent power producer (IPP) Greenvolt, which won 70% of the recent capacity market awards.
Kloczko spoke about the bidding process and how Greenvolt was able to win out despite participation being an "intensive and costly exercise," the status of the Polish market and how initial excitement around the nascent sector needs to be accompanied by a deep understanding of markets and technology, including battery degradation.
Read more coverage from and related to the Energy Storage Summit Central and Eastern Europe.
Energy storage developer Pacific Green has agreed to acquire two large-scale in-development battery energy storage system (BESS) projects in Poland, Europe.
The acquisition of two 50MW projects totalling 400MWh of capacity marks the developer''s first entry into Poland, which is fast becoming a key market for energy storage in the Central and Eastern Europe region.
Pacific Green has set itself a target of delivering 1GWh of projects in the Polish market, among a global goal of 12GWh across four global markets. The company is incorporated in Delaware, US, with its head offices in London. It recently signed a 1,500MWh BESS supply deal with Trina Storage, the energy storage arm of global solar PV company Trina Solar, and is developing projects in regions including, the UK, Italy where it bought a 500MW six-project portfolio in late 2023, and Australia where it has secured land deals including one for a site in Victoria which could host up to 1GW/2.5GWh of energy storage assets.
Majority stakes in the two projects will be acquired from an undisclosed "international developer present in the Polish market," with the balance of ownership transferring to Pacific Green on the attainment of certain milestones.
One project is located in the region of Warsaw, the nation''s capital city, and the other in the Polish South West, with grid applications lodged for both.
Pacific Green said they are anticipated to take part in the Q4 Polish Capacity Market Auction and could reach ready-to-build status in the final quarter of this year, if successful in the solicitation.
The capacity market is expected to underpin major growth in the Polish energy storage sector. In a sponsored article for Energy-Storage.news published in December 2023, analysts from research firm LCP Delta noted that Poland "looks set to lead battery storage deployments in Eastern Europe."
LCP Delta’s Silvestros Vlachopoulos and Jon Ferris wrote that 9GW of BESS projects had been offered grid connections by transmission system operator (TSO) PSE, while 16GW of projects had been registered for the then-ongoing round of capacity market auctions by that point.
Major reform to balancing markets had encouraged greater participation in the capacity market, and the first such auction held in 2022 had seen contracts awarded to four BESS projects totalling 150MW.
State-owned PGE Group, which is Poland''s largest power producer by sales revenue and net profit, said earlier this month that it will open a tender for contractors to work on the country''s biggest planned BESS project to date.
PGE said 6 June that it was preparing to launch a procurement process for turnkey design and construction of a large-scale BESS facility of 263MW output and at least 900MWh storage capacity.
The plant will be located in Żarnowiec, a village in northern Poland and will be built close to ESP Żarnowiec a pumped hydro energy storage (PHES) facility in PGE Group''s portfolio.
The solicitation will be carried out as an open tender in line with Polish Public Procurement Law, and the company is planning to formally initiate it in the next few days. Conditions for eligibility and entry already published along with other information in the official journal of the European Union (EU), as well as on the PGE group purchasing website.
PGE Group board president Dariusz Marzec said the company is accelerating its investments in battery storage due to the increase in the share of renewable energy on the grid.
The Żarnowiec BESS will provide grid services to the TSO and help balance the output of wind farms both onshore and offshore in the nearby Baltic Sea that PGE wants to build. A grid connection agreement is in place as well as concessionary agreements—thought to be a first for the Polish market—and an application made for capacity market qualification.
PGE said it would apply for funding from the post-pandemic National Recovery and Resilience Fund (KPO), which is worth about €60 billion (US$64 billion) in total including just over €25 billion in EU funding and about €35 billion of concessional loans. Conditions for receiving that funding make it essential that the tendered-for project goes online on schedule, the company said.
Although the capacity market is seen as a major new source of long-term revenue certainty for BESS in Poland, a warning was sounded recently that proposed 57% de-rating factors could dampen the market''s progress (Premium access).
Energy-Storage.news'' publisher Solar Media will host the 2nd annual Energy Storage Summit Central Eastern Europe on 24-25 September 2024 in Warsaw, Poland. This event will bring together the region’s leading investors, policymakers, developers, utilities, energy buyers and service providers all in one place, as the region readies itself for storage to take off. Visit the official site for more info.
The draft parameters for this year''s capacity market auction in Poland could make the rollout of battery energy storage systems (BESS) much more difficult. The document proposes a significant reduction to the BESS derating factor that could be particularly harmful for longer duration storage systems.
Image: UniEnergy Technologies, Wikimedia Commons
Poland''s battery revolution is in the starting blocks, but a newly proposed regulation could hamper it from reaching its full potential.
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