Wind Energy in Polish Power System
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Transcript of Wind Energy in Polish Power System
AKADEMIA GÓRNICZO-HUTNICZAim. Stanisława Staszica w Krakowie
WYDZIAŁ PALIW I ENERGII
Praca dyplomowa
Imię i nazwisko Artur Wyrwa
Kierunek studiów TECHNOLOGIA CHEMICZNATemat pracy dyplomowej:Wind Energy in the Polish Power System
Ocena:
Opiekun pracy
prof. dr hab. inż. Adam Guła
Kraków, rok 2001/2002
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AKADEMIA GÓRNICZO - HUTNICZAim. Stanisława Staszica w KrakowieWYDZIAŁ PALIW I ENERGIIKierunek studiów: TECHNOLOGIA CHEMICZNA
TEMATYKA PRACY I PRAKTYKI DYPLOMOWEJdla studenta V roku studiów dziennych
Specjalność: Paliwa i EnergiaKierunek Dyplomowania: Gospodarka Paliwami i Energią
Artur Wyrwa
TEMAT PRACY DYPLOMOWEJ: Wind Energy in the Polish Power System
Opiekun pracy: prof. dr hab. inż. Adam Guła
Recenzent pracy: dr inż. Mariusz Filipowicz
Miejsce praktykidyplomowej:
Centrum Badawcze ABB - Kraków
PROGRAM PRACY I PRAKTYKI DYPLOMOWEJ1. Zapoznanie się z literaturą dotyczącą energetyki wiatrowej.2. Udział w II konferencji ”Rozwój Energetyki Wiatrowej w Polsce - Konieczność
czy Idealizm”.3. Zapoznanie się z materiałami wewnętrznymi Centrum Badawczego ABB w
Krakowie.4. Zapoznanie się ze standardami światowymi w projektowaniu farm wiatrowych w
Mannheim/Niemcy, ABB New Ventures oraz analiza możliwości uczestnictwaABB w rozwoju energetyki wiatrowej w Polsce.
5. Perspektywy rozwoju energetyki wiatrowej w Polsce.
[email protected] (Looking for a job)Brody 13a34-130 Kalwaria ZebrzydowskaMałopolskaPOLAND
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AcknowledgementsI would like to express my gratitude to professor Adam Gula for his advise and
support.I also thank Mr. Piotr Ciechanowski and Dr Volker Biewendt, both from ABB, for
fruitful conversations.
8
CONTENTS
FOREWORD..................................................................................................................10
1. INTRODUCTION........................................................................................................11
2. WIND RESOURCES ..................................................................................................15
2.1. WIND ENERGY AS A COMPONENT OF SUSTAINABLE ENERGY DEVELOPMENT ..............152.2. HARNESSING WIND ENERGY....................................................................................162.3. WORLD USE OF WIND ENERGY................................................................................172.4. THE POWER OF WIND .............................................................................................192.5. WIND RESOURCES EVALUATION ..............................................................................22
3. POLISH WIND CONDITIONS. ...................................................................................24
4. POLISH POWER MARKET .......................................................................................27
4.1. POLISH POWER SYSTEM .........................................................................................274.2. MARKET DESCRIPTION-GENERAL REMARKS.............................................................274.3. MARKET PARTICIPANTS ..........................................................................................29
4.3.1. Regulation of the electric energy market ........................................................294.3.2. Generation......................................................................................................304.3.3. Transmission ..................................................................................................334.3.4. Distribution .....................................................................................................35
5. WIND ENERGY IN THE POLISH POWER SYSTEM ................................................37
5.1. MARKET ASPECTS ..................................................................................................375.2.TECHNICAL ASPECT.................................................................................................37
5.2.1. Grid constrains ...............................................................................................375.2.2. Power quality constrains.................................................................................38
5.3. FORMAL PROCEDURES OF ESTABLISHING A WIND FARM .............................................39
6. LEGISLATION ...........................................................................................................42
6.1. INTERNATIONAL FRAMEWORK ..................................................................................426.2. POLISH LEGAL FRAMEWORK ...................................................................................43
6.2.1. Development Strategy of Renewable Energy Sector......................................436.2.2. Polish Energy Act ...........................................................................................436.2.3. Ordinance of the Minister of Economy on Electricity Purchase Obligation .....456.2.4. Power Purchase Obligation – Meeting the Target ..........................................47
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6.2.5. Ordinance of Minister of Economy Concerning Detailed Principles of SettingEnergy Tariffs ................................................................................................49
7. FINANCING OF WIND ENERGY...............................................................................51
7.1. FOREIGN FOUNDING SOURCES ................................................................................517.1.1. Flexible Kyoto Mechanisms............................................................................517.1.2. World Bank.....................................................................................................537.1.3. The Global Environment Facility.....................................................................537.1.4. PHARE – European Union Assistance Program ............................................547.1.5. Instruments for Structural Policies for Pre-Accession.(ISPA) .........................547.1.6. The Altener Program ......................................................................................547.1.7. Bilateral Programmes .....................................................................................55
7.2. POLISH FOUNDING SOURCES...................................................................................567.2.1 Foundation EKOFUNDUSZ (ECOFUND)........................................................567.2.2 The National Found for Environmental Protection and Water Management....56
7.3. COMMERCIAL SOURCES ..........................................................................................587.3.1 The Bank of Environmental Protection ............................................................597.3.2 The Bank of Export Development....................................................................59
8. MAJOR WIND FARM PROJECTS IN POLAND........................................................60
8.1. PROJECTS COMPLETED ..........................................................................................608.2. PROJECTS IN THE DEVELOPMENT PHASE..................................................................618.3 JOINT IMPLEMENTATION PROJECT: SKROBOTOWO WINDPARK....................................62
9. SUMMARY.................................................................................................................65
ANNEX I. MICROSITING...............................................................................................68
ANNEX II. LIST OF ANNEX I COUNTRIES...................................................................70
REFERENCES...............................................................................................................71
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FOREWORD
Energy is fundamental to economic and social development. Yet, at the dawn of
the 21st century, we are confronted with the unacceptable fact that there are 2 billion
people without access to basic energy services. At the same time, we are facing the
greatest threat to our collective survival because of our unsustainable use of energy.
There is no doubt that we can and must use it more efficiently but there is equally no
doubt that the developing world will need more energy to address very pressing needs.
The challenge, which faces all of us, is how to meet this growing demand for energy
while at the same time addressing the equally urgent threat of climate change.
This study highlights the significant role that wind energy can play in that
challenge. As technology advances wind energy becomes competitive in increasingly
large areas and is therefore growing rapidly but still faces an uphill struggle against the
well established dominant electricity supply technologies - coal and gas.
The study makes an overview through the Polish wind energy market to bring it
closer to the potential investor. In the process, a number of technical, economic and
resource implications have had to be examined. The main inputs to this study have
been:
• an assessment of Polish wind resource and its geographical distribution.
• the level of electricity output required and whether this can be accommodated in the
grid system.
• the current status of the wind energy market and its potential growth rate.
• analysis of wind energy technology and its cost profile.
There is no doubt that wind energy can play a significant role in Polish energy
supply. This is not just something to look forward to with hope for the future - it is here
today as sound and growing businesses all over the world.
11
1. Introduction
We witness that energy is becoming an increasing concern worldwide. This has both
its local and global meaning:
locally, it relates to energy affordability and environmental destruction caused by
energy production processes, while
globally it relates to
• depletion of the traditional fossil fuel resources on one hand and
• climate change which seems to be more and more recognised as global
environmental threat for the humankind.
Limited resources.
The estimates of the available resources of the fossil fuels vary considerably. However,
the experts increasingly agree that oil will start becoming a scarce resource already
before the middle, and natural gas by the end of this century. Very recent estimates
show that oil consumption will peak already in about 2010 and decline afterwards due to
depletion of this resource. Coal, is an abundant resource, it may suffice for 300 -500
years more, but despite that it is so plentiful - is not an optimistic long-term solution. This
is explained by the numbers in Table 1, which show CO2 emissions per one kilogram of
burned fuel.
Emission [kg] Ratio to Natural Gas
Natural Gas 0,2 1.00
Oil 0,26 1. 3
Coal 0,33 1.65
Table 1. CO2 emissions per one kilogram of burned fuel. [1]
As one can see, burning coal leads to CO2 emissions nearly two times higher than those
for natural gas. Oil is somewhat better as the corresponding factor is 1,3. One can
conclude that - from the global environmental point of view - gas is the most
environmentally friendly fossil fuel. However, it should be remembered that burning
natural gas leads also to greenhouse gas emissions.
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Fossil fuels (gas, oil and coal) are better or worse; still their resources are limited and
using them for energy production leads to antropogenic climate change.
Climate change.
Greenhouse Gases (GHGs), primarily carbon dioxide (CO2), methane (CH4) and nitrous
oxide (N2O) are naturally occurring in the Earth’s lower atmosphere. They trap heat
keeping the planet warm and helping to support life. Largely due to human activity, in
particular the burning of fossil fuels and deforestation, atmospheric concentrations of
GHGs have been rising. The evidence that there is a significant climate change effect
caused by human activity is growing. No doubt, the concentration of greenhouse gases,
notably of CO2, in the atmosphere is sharply increasing as illustrated in Fig. 1.
Fig 1. Increase of the concentration of CO2 in the atmosphere [EPA]
The physical picture is then quite obvious: once greenhouse gases absorb infrared
radiation, more (heat) energy that would be emitted back to the space by Earth’s surface
is trapped in the atmosphere, whereby the average temperature in our biosphere should
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13
increase. Intuitively, the results of such change are quite frightening: melting of Polar ice
and glaciers, rise of sea levels, desertification of vast areas of fertile land, and - foremost
- increase of the strength of the climatic phenomena (floods, hurricanes, El Ninio).
Indeed, the more energy is accumulated in the biosphere, the more energy is available
for such phenomena. Of course, such simple pictures can be challenged, and they are
challenged indeed.
Considering both fossil fuel depletion and climate change, the present patterns of
energy production and use may limit access to energy services for future generations
and - at the same time - may have a negative permanent impact on the environment.
To counteract such a scenario a significant effort has been made to find the ways of
achieving a sustainable energy development.
It is obvious that a given energy service can be obtained by using greater or smaller
amount of energy (e.g. better insulated building or more efficient lighting), in other
words, using energy more or less efficiently. It is easier to achieve common
understanding of sustainable energy and know what we practically mean by, when we
refer to this notion, if we define it in more operational terms. In this case, most often, one
understands two things:
• increasing energy efficiency
• increasing the use of renewable energy sources,
From the point of view of energy development renewable energies address two
problems caused by the reliance on fossil fuels:
• they are inexhaustible,
• their use for energy production does not have adverse environmental impacts
In order to summarize how the particular energy sources discussed above fulfil the
sustainability criteria we should examine the table below. Table 2 shows a picture, which
is to some extent arbitrary, nevertheless, rather widely accepted.
14
Energy Source Depletion Environmental Impacts
Gas exhaustible climate change (moderate)Oil exhaustible (quickly) climate changeFossil fuelsCoal exhaustible (long-term) climate change (strong)
natural 235 U exhaustible (quickly) reactor safety, nuclear waste
Fissionartificial239Pu hardly exhaustible as above, plus easy weapons’
proliferationNuclearenergy
Fusion practically inexhaustible rather minor radiation hazards
Geothermalenergy practically inexhaustible possibly wildlife in some areas
endangered
Wind inexhaustible landscape(?), noise(?), birds(?)
Hydro inexhaustiblemethane from biomass decay,microclimate, landscape, fish migration,cultural heritage
Biomassinexhaustible, but only ifharvested in asustainable way
conversion of wild areas intoagricultural land
Direct solar heating inexhaustible landscape(?) recycling of materials
So
lar d
eriv
ativ
es.
Direct electricity inexhaustible landscape(?) recycling of materials
Energy NOTused(energyefficiency)
exhaustible (a fraction ofenergy actually used)in this sense it can beconsidered inexhaustible
none
Table 2. Depletion and Impacts
Wind energy is largely free of environmental impacts which have long-term, inter-
generational or serious ecological effect. Furthermore, the negative impacts, if any, of
well-located wind farms are temporary and reversible. Unlike the fossil fuel and nuclear
fuel cycles there is no potential conflict with sustainable development. Once sustainable
development has been defined as "meeting the needs of present generations, without
compromising the ability of future generations to meet their own needs", wind energy
should be consider as completely sustainable, unlike conventional energy technologies,
since we will never run out of wind.
15
2. Wind Resources2.1. Wind Energy as a Component of Sustainable Energy Development
The winds are caused by pressure differences across the earth's surface. They
are a good energy resource because they are distributed over large areas of the Globe.
The origin of wind is the energy of solar radiation absorbed by the Earth. For this reason
wind energy is a renewable source, i.e. its resources are not depleted with time.
The Earth is absorbing energy from the solar flux of about 175000 TW. More then 30%
of this energy is reflected back to the space and nearly 70% is absorbed by the Earth..
The relevant numbers are given in Table 3.
Solar Radiation Intercepted by the Earth 175 000Solar Radiation Absorbed by the Earth 110 000
“theoretical”potential of
Solar Energy Involved in Evaporation hydro energy 40 000Solar Energy: Atmospheric Pressure wind energy 1 800Solar Energy Involved in direct Heating direct heat 68 000Solar Energy Utilised in Photosynthesis biomass energy 100Man’s Rate of Energy Use, 1980 10
Table 3. Solar Energy Fluxes (TW). [2]
One can see that the ratio of the present man’s rate of energy use to the total flux of
solar energy absorbed by the Earth is only 10-4. As seen in Table 3, it is estimated that
about 1% of the Sun energy received by the Earth is converted into kinetic energy of air
masses. The total physical potential of wind energy exceeds by a factor of about 180 the
present global energy needs. Of course only a small fraction of this potential can be
used in practice. The biggest share of solar radiation is converted into hydro energy
while relatively small amount into biomass. Still, wind energy constitutes a considerable
potential in the effort to achieve the global energy sustainability.
16
2.2. Harnessing Wind Energy
Humans have harnessed the energy of winds for over 2000 years. Until the
industrial revolution, windmills were used extensively to provide power for many
purposes such as pumping water or grinding grain. Nowadays, with new technology and
new materials, modern wind turbines have been developed to generate clean electricity
that we all need for lighting, heating, refrigerators and other appliances. Wind turbines
produce no pollutants, no waste products and no radioactivity. There are no harmful
effects to populations elsewhere in the world, or to future generations. Wind energy is
clean energy.
The main environmental concerns about the use of wind energy are impacts on land use
and landscape, noise, effects on wildlife, killing birds and disruption of radio
transmissions. Wind turbines can however be placed in areas used for grazing of
animals, or land of marginal value. Birds occasionally collide with wind turbines, as they
do with all other tall structures such as buildings. Overhead power lines present a far
greater threat to birds than the wind turbines. However, areas that are commonly used
by threatened or endangered species should be regarded as unsuitable for wind
development. Visual impacts can be minimized through careful design and location of a
wind power plant. Noise was an issue with some early wind turbine designs, but it has
been largely eliminated through improved engineering and appropriate distance from
nearby residences. To put this into perspective, a wind turbine 250 meters from a
residence is no noisier than a kitchen refrigerator. Potential interference to
telecommunications systems can be easily overcome by careful siting and minor
technical adjustments. All forms of energy production have an environmental impact, but
with wind energy the impacts are small, local, and manageable.
Governments all over the world are trying to reduce pollution. Wind energy will play an
important role in creating a cleaner and sustainable future. Along with other renewable
technologies and energy efficiency, it will be crucial in reducing global climate change,
acid rain and other environmental problems.
17
2.3. World Use of Wind Energy
Since the recession time in 1973 thousands of installations to utilize wind to
produce electric energy come into being. With an average growth rate of 30% annually
over the past five years, wind energy is the world’s fastest-growing energy source,
although it still accounts for a small portion of world electricity supply. Some 6,500
megawatts (MW) of new wind energy generating capacity were installed worldwide in
2001. This is the largest increase ever in global wind energy installations, well above the
capacity added in 2000 (3,800 MW) and 1999 (3,900 MW). The world’s wind energy
generating in 2001 stood at about 24,000 MW. Global wind energy market continues to
be dominated by the “big five” countries with over 1,000 MW of generating capacity
each:
2000
Additions
2000 Year End
Total
2001
Additions
2001 Year End
Total
Germany 1669 6113 2659 8750
United States 53 2566 1695 4261
Spain 713 2502 835 3337
Denmark 552 2300 117 2417
India 90 1167 240 1407
Table 4 Top Wind Energy Markets (by installed capacity, in MW)
Germany alone set a world and national record of more than 2,600 MW of new
generating capacity installed during the year. Germany, Denmark, and Spain are
demonstrating that wind can reliably provide 10% to 25% and more of a region or
country’s electricity supply [3]. In the United States, the wind energy industry left
previous national records in the dust with a blow-out year in 2001, installing nearly 1,700
megawatts (MW) or $1.7 billion worth of new generating equipment. The new
installations account for close to a third of the world wind energy generating capacity
added in 2001. Europe currently accounts for over 70% of the world’s wind power.
European countries made up two-thirds of the 2001 additions.
18
Fig 2. The world’s wind energy generating capacity in MW
Market growth in 2002 is likely to be in the 6,000 MW range, with a temporary slowdown
in the US market (due to the delay in extending the federal wind energy production tax
credit) offset by continued growth in several dynamic markets. The global industry could
therefore reach the 30,000-MW mark by the end of 2002.
19
2.4. The Power of Wind
A wind turbine can be placed almost anywhere in a reasonably open ground.
However establishing a wind farm is a commercial development and one has to optimise
all relevant parameters. This is important not only for the returns during the life time of
the farm, but also for raising capital to develop the site initially.
Wind speed data are the most important indicator of a site’s wind energy resource.
Multiple measurement are required for determining a site’s wind shear characteristics,
conducting turbine performance simulations at several turbine hub heights, and for
backup. Heights typical of recent wind measurement programs are 40 m. 25 m, and 10
m [4].
• 40 m: This height represents the approximate hub height of most utility-
scale wind turbines. Actual hub heights are usually in the 50 m to 65 m
range.
• 25 m: This level approximates the minimum height reached by the blade
tip portion of a rotating turbine rotor and will help define the wind regime
encountered by a typical turbine rotor over its swept area.
• 10 m: This is the universally standard meteorological measurement
height. However, in locations where the interference of local vegetation
(e.g., forest) at this height is unavoidable, an alternative low-level height
of 10 m above the forest canopy may need to be used.
When comparing data with other stations, all wind speed data should be extrapolated to
a common reference height (e.g.,30 m or 40 m). Wind speeds can be adjusted to
another height using the following form of the power law equation :α
=
00 h
hVVh
where
V - the unknown speed at height h
V0 - the known wind speed at the measurement height h0
α - the wind shear exponent.
20
As a first approximation, the wind shear exponent is often assigned a value of 0.143,
known as the 1/7th power law, to predict wind profiles in a well-mixed atmosphere over
flat, open terrain. However, higher exponent values are normally observed over
vegetated surfaces and when wind speeds are light or moderate (i.e., under 7 m/s or 16
mph).
A steady flow of reasonably strong winds is a necessary requirement for utilising the
power in the wind. The power available to a wind turbine is the kinetic energy passing
per unit time in a column of air with the same cross sectional area A as the wind turbine
rotor, travelling with a wind speed V. Thus the available power is proportional to the
cube of the wind speed [5].
3
21 AVPj ⋅= ρ
We can see that power is strongly dependent on wind speed. Doubling the wind speed
increases the power eightfold but doubling the turbine area only doubles the power.
Wind direction frequency information is important for identifying preferred terrain shapes
and orientations as well as for optimising the layout of wind turbines within a wind farm.
Therefore, choosing a site with the strongest and most persistent winds can significantly
increase the profitability of the venture. The density of the air will also have an effect on
the total power available. The air is generally less dense in warmer climates and also
decreases with height. Air density can range from around 0.9 kg/m3 to 1.4kg/m3. This
effect is small in comparison to the variation of wind speed.
As the wind power generated depends upon the cube of the wind velocity its accurate
estimate is a critical factor. This problem is dealt with by describing the wind speed
probability distribution over a year. The use of statistical tools is difficult as choices on
the length of sample can impact on the results. The data would be more useful if it could
21
be described by a mathematical expression. Various statistical distributions have been
suggested to describe the wind climate. The two parameter Weibull distribution has
been found to fit wind data with acceptable accuracy.
γ
βγ
ββγ
−−
⋅
⋅=
V
eVVf)1(
)(
where:
V is the wind speed
β is the scale parameter with units of speed
γ is a dimensionless shape parameter
For γ =2 the distribution reduces to a Rayleigh distribution and for γ =1 an exponential
distribution is obtained. These are special cases of the Weibull distribution. The scale
factor β is related to the mean wind speed for the site!
−Γ
=
γ
β11
V
where: Γ is the complete gamma function
The two Weibull parameters γ and β may be derived from the fits of the site data. The
mathematical description of wind frequency allows us to match it with the turbine power
curve. In thus way a measure of the average total power capture in a year is achieved.
Additionally, turbine cut in and furling speed may be adjusted to maximise the total
energy capture.
As it is seen assessment of wind potential is rather complicated task. The lack of such
estimates or inaccurate data may lead to wrong investment decisions.
22
2.5. Wind Resources Evaluation
It is only recently, that we observe an integrated, modern approach to the
measurement of wind potential. The consecutive steps of wind resource evaluation are
described below.
Preliminary Area Identification
Fig. 3. Average annual wind speed.
The first step in the development of a windfarm is the evaluation of business
opportunities by using world-, country-, wind-maps. Locations that are expected to have
an adequate wind regime can initially be identified then. This provides a broad picture of
the wind energy resource. Fig 3 illustrates the world wind potential, the darker are the
areas the higher are the annual averages of wind speed. The accuracy of any wind
resource estimate is obviously greatly affected by the accuracy of the wind data. Most of
the initial studies have had little access to measurements performed specifically for wind
23
energy estimation; then have rather relied on general meteorological data. However,
meteorological station sites are chosen for other reasons that measuring wind speed
(particularly agriculture, forecasting the weather and aviation). In general, wind is not the
most important measurement unless it is strong enough to be likely to cause destruction.
The measurement sites are thus not best suited to measure the unobstructed wind and
are rarely placed in the sites of highest mean wind speeds.
Area Wind Resource Evaluation
The next step is evaluation of wind recourse area. Visits to potential sites can often
reveal information about the strength and direction of prevailing winds. This stage
applies to wind measurement programs to characterize the wind resource in a defined
area or set of areas where wind power development is considered. The most common
objectives of this scale of wind measurement are to:
• Determine or verify whether sufficient wind resources exist within the area to justify
further site-specific investigations,
• Compare areas to distinguish relative development potential
• Obtain representative data for estimating the performance and/or the economic
viability of selected wind turbines,
• Screen for potential wind turbine installation sites.
Micrositing
The smallest scale, or third stage, of wind resource assessment is micrositing.
Its main objective is to quantify the small-scale variability of the wind resource over the
terrain of interest, like: wind speed distribution, extreme wind speed, turbulence, in-flow
angle, wind shear, temperature range [6]. Ultimately, micrositing is used to position one
or more wind turbines on a parcel of land to maximize the overall energy output of the
wind plant. More information is given in the Annex I.
24
3. Polish wind conditions.
The Polish wind potential is comparable to the wind potential of the “world wind
farms giant”- Germany. It also compares favourably with countries where a significant
share of energy is obtained from wind, such as Denmark or Sweden, which is illustrated
in the table below.
PolandAccording to “Law andeconomy aspects of usethe energy from renewa-ble sources use””(EC BREC,2000 )
DenmarkAccording toDansk EnergyManagement (1999)
SwedenAccording to EnergyManagement (1999)
Energy sources
[PJ/year ] [PJ/year] [PJ/year]Biomas 895 216 638Hydro energy 43 0,3 266Geothermalenergy
200 100 0
Wind energy 36 97 209Solar reflection 1340 84 194Total 2514 498,3 1307
Table 5. Polish technical potential of the renewable energy sources compared
with the technical potential of Denmark and Sweden [7].
According to the Institute of Meteorology and Water Management (IMWM) about 30% of
the Polish territory i.e. 60 000 km2 have the average wind speed over 4 m/s. Out of that
area, 30 000 km2 is described as accessible for location of wind farms. Assuming that it
is possible to install wind turbines of 4 MW capicity per one square kilometre, a
significant proportion of the Poland's electricity demands could be met by the wind
power generation. Moreover, it is expected that this potential can be even bigger.
Poland has never regarded wind energy as an energy source and therefore it is
inaccurate to assess the Polish wind potential on the basis of the existing wind data.
A preliminary estimate of the available resource is presented in Fig 4 as a map of wind
energy in watts/m2 at 10m above the ground. The figure shows the data from the state
25
network of meteorological stations. Not all areas of high wind speed potential are
highlighted, some because they cover too small areas, some because there is little data
and some because of local effects which are not fully recognised. The presentation of
the data does not take into account any constraints on the landuse, consequently no
estimate of the accessible resource is given.
Color Wind Conditions
GREEN FAVOURABLE
YELLOW GOOD
ORANGE SUFFICIENT
RED INSUFFICIENT
BROWN BAD
BLACK EXCLUDED
Fig 4. Wind potential of Poland [8].
The map in Fig 4 shows that the North of Poland particularly experiences high wind
speeds for a significant fraction of the year. The most favourable wind conditions are on
the Uznam Island, lane of the Baltic Coast from Swinouscie to Gdansk , Kaszubskie
Coast and in the North-Eastern part of Poland (Suwalszczyzna). In those regions the
average wind 30 metres above the ground speed exceeded 4,5 m/s. Estimates of IMWM
suggest that the experienced wind potential 20 metres above the ground ranges from
1250 to 2250 kWh/m2. Such yearly average winds may provide a positive return from
wind power generation. Good wind conditions exist also in the Mazowiecka Lowland,
central part of Wielkopolska. The map suggests that wind conditions in the other parts of
Poland are not sufficient to build wind farms. However, it is not necessarily to be true.
26
There are many factors influencing the wind speed, like local topography complexity,
orography factors. For instance favourable wind condition are in areas of Beskid Slaski
and Żywiecki, Bieszczady, Dynowskie Foothills and the east part of Sandomiesrka
Valley with the mean speed exceeding 4 m/s.
A few Polish commercial companies offer complete wind databases characterising wind
resources in different areas. The example of areas with accessible wind resource data is
presented below.
Fig 5. The example of areas with accessible wind resource data.
Even in regions with high average wind speed there are places less favourable for wind
farm location. The less favourable locations can be eliminated if the long term wind
speed measurements are carried out.
27
4. Polish Power Market
4.1. Polish Power System
The Polish power system is the largest in Central and Eastern Europe. As of
December 31, 1999 the installed capacity of the system was 34,208 MW, of which
31,407 MW in system plants and 2,801 MW in industrial plants. The newly
commissioned capacity was 230 MW in all the system plants.
Recently, total primary energy consumption of 3500 kWh/person per year ranked Poland
as number one among Central European countries. Poland has an energy consumption
of one third of the total of all these countries. However, Poland is an inefficient energy
consumer. It is estimated that up to 20 percent of energy generated is wasted but this
number is decreasing. E.g. in ZE Kraków (local distributor) only up to 11% of the energy
is lost. Poland uses about 70% of the EU’s average energy consumption per capita.
4.2. Market Description-General Remarks
The strategic importance of energy sectors led to their monopolisation after World
War II in all developed countries all over the world. The monopolisation as well as
specific character of electricity as a commodity are the main reasons for difficulties in
introducing market mechanisms into the energy sector. The centrally controlled energy
sector and government price control led to financial inefficiency. As a consequence one
witnessed economically unjustified cost increases which led to electricity price increases
and to lack of well defined development perspectives. It is expected to change once the
energy starts to operate on a free market basis. The pre-requisite for a free energy
market is free energy trade between generators and users.
In 1991 the Polish government decided to follow the example of Great Britain and other
countries by doing away with the single buyer market and replacing it with a pool pricing
and free market system under a new regulatory system. However, because of
commitments made by the single buyer (Polish Power Grid Company, PPGC), Poland
has now an uncomfortable hybrid market in transition with much higher risks that anyone
seemed to anticipate at first. Beside the new deregulated market there is still a player
who dominates and sets conditions.
28
At present the Polish power market is in transition to an open, free market. The Energy
Regulatory Authority (URA) is set up and operating, PPGC is no longer entering long
term contracts with producers, and an electricity trading exchange has been set up. In
theory, electricity producers sell, and major consumers buy electricity on the basis of
freely negotiated contracts.
The energy sector will be fully liberalised only when all participant have access to the
energy network on equal rights. The right to choose energy provider is the basic
principle of a competitive market. This rule is called Third Party Access (TPA).
Basic rules of functioning of energy market in Poland are included in the Energy Act and
its secondary legislation. They establish a framework for competition in sub-sector of
generation and supply and supervision by independent regulatory offices over
transmission and distribution.
29
The timetable of opening the market for the customers who get the right to choose their
supplier is the following:
• August 1998 for customers buying more than 500 GWh/a
• 1 January 1999 for customers buying more than 100 GWh/a
• 1 January 2000 for customers buying more than 40 GWh/a
• 1 January 2002 for customers buying more than 10 GWh/a
• 1 January 2004 for customers buying more than 1 GWh/a
• 5 December 2005 for all customers
4.3. Market Participants
There are following participants of the Polish Energy Market [9]:
regulatory function is performed by ERA,
generation function is performed by about 15 of power companies,
transmission function is performed by PPGC,
distribution function is performed by 33 joint-stock companies,
power exchange function is performed be the Energy Exchange.
4.3.1. Regulation of the electric energy market As the activity consisting in energy transmission has a character of a natural monopoly,
where market mechanisms are limited, a regulatory body has been established: Urząd
Regulacji Energetyki (Energy Regulatory Authority, ERA) with the aim to stimulate the
business efficiency in the energy sector.
In accordance with The Power Law nomenclature, state interference into power system
take place through the so-called regulations basis on The Power Law.
Tasks in the scope of regulation of the energy economy regulation and development of
competition shall be implemented by the Chairman of the Energy Regulatory Authority
hereinafter referred to as "the Chairman of ERA". The Chairman of "ERA", is a central
government administration organ appointed for 5 years by the Chairman of the Council
of Ministers.
30
The main tasks of regulations are:
safety of the natonal energy system,
promotion of competition,
nature protection,
balance of entrepreneur and consumer interests,
economically justified schedule of costs,
safeguarding public interest,
control of consumer's service quality standards
To fulfil these tasks ERA is authorised to:
issue licences to energy utilities,
approve and control energy tariffs,
resolution of conflicts,
approve projects of energy market development,
impose penalties for breaking the Power Law.
4.3.2. Generation
With installed electric capacity of 34,208 MW (as of December 1999) of which 31,407
MW is installed in system plants and 2,801 MW in industrial units and electric generation
of 135 TWh, the Polish generation sector is the largest in Central and Eastern Europe.
Still the Polish demand is expected to grow by over 50% by 2020.
Below several most important pieces of information are given [10]:
• Installed capacity in power plants by types:
installedcapacity
[MW]
electricitygeneration
[GWh]Coal power plants 20.355 83.107
Brown coal power plants 8.396 49.671
Hydro power plants 2.105 3.984
Industrial power plants 2.801 7.65534.552 144.417
31
• Electricity generation by various sources:
Coal power plants 57,5 %
Brown coal power plants 34,4 %
Hydro power plants 2,8 %
Industrial power plants 5,3 %
• The largest cogeneration and fossil fuel power plants in Poland are shown in Table 6
and 7, respectively:
Power PlantElectricalCapacity(MWe)
ThermalCapacity(MWth)
PrimaryFuel
Bedzin 55 496 coalBialystok 173 557 coal
Bielsko-Biala 163 758 coalBydgoszcz 204 1,007 coal
Bytom 126 321 coalChorzów 94 471 coalGorzów 73 350 coal
Jaworzno I & II 266 364 hard coalKalisz 8 137 coal
Kraków-Leg 460 1,457 hard coalLódz 599 2,932 hard coal
Poznan 250 1,022 coalTorun 3 314 coalTychy 40 350 coal
Warszawa 934 5,494 coalWroclaw 387 1,415 hard coal
Wybrzeze(Gdansk/Gdynia) 353 1,478 coal
Zabrze 97 554 coalZielona Góra 23 238 coal
Table 6. Poland's 'EC' Cogeneration Power Plantsnote: capacities shown are 'nameplate' capacities; MWth = thermal megawatts
Source: Poland Ministry of Finance
32
Power Station Installed Capacity(MWe)
PrimaryFuel
Belchatów 4,320 brown coalKozienice 2,720 hard coal
Turów 2,120 * brown coalTadeusz Kosciusco 1,800 * hard coal
Rybnik 1,760 hard coalDolna Odra 1,720 hard coal
Opole 1,490 * hard coal1,200 brown coalPatnów 400 oil
Polaniec 1,490 hard coalJawórzno III 1,290 hard coal
Laziska 1,040 hard coalLagisza 840 hard coalSiersza 740 * hard coal
572 * hard coalSiekierki 50 hard coalAdamów 600 brown coal
626 hard coalOlstroleka 67 * hard coalSkawina 590 hard coal
395 brown coalKonin 93 * brown coal275 hard coalStalowa Wola 110 * hard coal220 hard coalBlanchównia 61 * hard coal
Plock 275 * oil235 * hard coalZeran 15 hard coal
Table 7. Largest Fossil Fuel Electricity Generating Plants in Poland* - also generates commercial thermal energy. Source: Utility Data Institute
Fig 6. Electricity power demand by months:
33
4.3.3. Transmission
4.3.3.1. Transboundary connections
The Polish power grid is interconnected with grids of the neighboring countries by the
high voltage inter-ties and is part of the CENTREL system, which links the Czech
Republic, Slovakia and Hungary. In 1995, the CENTREL system was connected with
Western Europe's system. Poland also has connections with Ukraine and Belarus.
Currently, both north-south and east-west connections are being expanded, as part of
the EU's Trans-European Energy Network project. Poland produces more electricity
than it consumes and the excess is exported as shown in Fig 7.
Fig 7. Energy foreign exchange of electricityin TWh.
4.3.3.2. Domestic Transmission
The Polish Power Grid Company performs the function of managing transmission.
PPGC was originally a state enterprise and was transformed into a joint stock company
in 1990. It owns 13 000 kilometers of high-voltage transmission lines of 220, 400 and
750 kV, 89 transformer stations of a total power of 113260 MW and a majority stake in
the joint stock company the Pumped Storage Power Plants.
34
Fig 8. Polish power grid.
PPGC’s key responsibilities are: programming and planning the development of the
whole power industry system, exercising of the role of its operator and the co-ordination
of co-operation with the power grids of other countries. PPGC purchases power for
resale to the distribution companies. The Company's responsibility is to secure cost
effective operation of the national power system on an open and competitive market.
The Company is also involved in the following related activities:
construction and operation of the grid and pumped-storage power stations,
35
technical and organizational support to the co-operation between Polish and other
national power systems,
financing and managing the power sector data base,
monitoring fuel reserves in the power stations,
protecting the natural environment against any adverse impact of power production.
As an energy utility PPGC is obliged to buy electricity and heat from unconventional or
renewable sources as stipulated by the Ordinance on electricity purchase obligation.
4.3.4. Distribution
The distribution function is performed by 33 distribution companies, which in 1993
were transformed into the joint-stock companies.
Fig 9. Service areas of distribution companies
36
The mission of the distribution companies is:
• distribution of electricity (and some power and heat generation),
• maintenance and expansion of power distribution networks in their service areas,
• consultation, engineering and other services.
Distributors are also obliged to buy electricity and heat from unconventional or
renewable sources as required by the aforementioned Ordinance of the Minister of
Economy of 15 December 2000 on electricity purchase obligation. Distributors are also
allowed to purchase electricity directly from industrial power generators. This segment of
the market is outside of the PPGC’s control. The generators have been granted the
possibility to sell electricity directly to the service enterprises without participation of
distribution company network and to large industrial users located close to the power
plant, supplied by 110 kV lines if the technical and metering conditions meet the
required conditions.
37
5. Wind Energy in the Polish Power System
5.1. Market Aspects
Wind Energy is a specific kind of energy because one can never be sure how
much energy will be produced. Apart from the case when the producer sells the
electricity directly to the local distribution utility, the trade must be done on the balance
market. It is worth to mention that the balance market is a temporary solution in the
Polish energy market and it is possible that the situation may change soon. Thus the
success depends on goodwill of three following market participants: electricity producer,
local distribution utility and a buyer (another distribution utility). Due to the fact that it is
difficult to set the hourly graphic considering production of the electricity, the local
distributor offers the electricity on the balance market. Simultaneously the buyer
(another distribution utility) to balance the trade sells an equal amount of energy back to
the local distributor. It is a virtual (accounting) operation without a real physical flow of
electricity called the ”trade ”over the grid” where the physical electricity flow is balanced
by contracts. Recently, the PPGC which operates the balance market decided to set the
prices so that the price of purchase and sale are equal.
5.2.Technical Aspect
5.2.1. Grid constrains Majority of wind farms are planned to be situated in the Northern part of Poland.
According to Fig 8. it seen that the high voltage lines are poorly developed in that region.
Moreover, the existing power grid is strongly overloaded in peak Additionally, there are
no big energy consumers that would use the produced energy. Therefore, the problem is
how without increasing demand for electricity and limited possibilities of transmission,
balance the electricity produced in the planned wind farms? In the service territory of the
main power distribution utilities in Northern Poland (ESSA, ZEKSA, ZESSA) the reported
total capicity of planned wind farm projects is 1500 MW for off-shore wind farms and
1000 MW for on-shore wind farms[11].
38
Fig 10. ESSA electricity system with planned wind farms as of September 2001.
According to researches from the Technical University of Szczecin there is no possibility
of connecting of all planned wind farms to the grid on ESSA territory without
modernisation of the HV grid. On the other hand, a quick development of the HV
electricity grid is difficult because of poor financial situation of the distribution utilities.
Resolution of this impasse may take some time.
5.2.2. Power quality constrains
Polish wind power market does not exist yet, however questions and problems about
their impact on power quality are widely discussed. According to the Polish Energy Law,
before receiving the grid connection conditions, the investor should make a technical
survey of the influence of a newly connected turbine on the grid (Dz. U. Nr 85 poz. 957
39
dated 13.10.2000). The shortage of experience with wind power generation leads
controversial opinions among the Polish utility experts [12].
It is well known that the operation of wind turbines has an impact on the power quality in
the grid. Depending on the grid configuration and the type of wind turbine used, different
power quality problems may arise.
Wind power production varies following the natural variations of the wind. If the wind
turbine is operating at fixed-speed, the tower shadow and wind speed gradients will
result in fluctuating power. The power fluctuations caused by the turbine may cause
flicker disturbances. In order to evaluate the significance of the flicker, disturbance
measurements and subsequent flicker calculations must be performed. In the case of
variable-speed wind turbines, one of the drawbacks is the injection of higher harmonics
into the grid. Depending on the type of inverter used, different orders of harmonics are
produced.
However, as experience shows, those problems can be solved. Indeed, wind turbines
have caused no major power quality problems in the EU-countries, which is the result of
compliance with the guidelines described in IEC 61400-21 and DEFU report KR 111-E
5.3. Formal procedures of establishing a wind farm
Below the consecutive steps of the formal procedures required to establish a wind
farm are briefly described.
License.
Wind farms usually have the total output power over 5 MW thus the investor should
apply to the Energy Regulatory Authority for the appropriate license to produce
electricity. The license is granted for 10 to 50 years. According to The Power Energy Act
applicant has to:
• live in Poland(residence) or possess a base in Poland,
• have sufficient technical and financial resources,
• employ only specialists ( the staff dealing with the electricity grid and other
equipment is obliged to posses appropriate certificates issued by commission of
certification according to Art. 54 of Energy Act),
40
• have the land development decision,
• have the building decision,
• have property right by purchasing or leasing the area.
The building decision.
The building decision, is issued by the Administrator of the Municipality on the basis of
the decision of the Municipal Building Supervision and Land Development Department
Regulation (L.B. no 15 point 138, 1999). The decision should be taken within 30 days.
The Municipal Building Supervision and Land Development Department, before decision
may apply for additional opinion of:
• the governor and Provincial Branch of the Sanitary State Inspectorate,
• minister of health and social welfare (location near the health resort),
• Environment Protection and Building Supervision (establishing e.g. the level of
allowed noise emissions by wind power plants 40 dB night – B.L no 66 point 436,
1998),
• Regional Nature Protection Inspectorate (regarding investments in recreational
regions),
• Department, State Inspectorate of Civil Air Force (depending on the tower height
Polish norm- PN-65/L 48002, if higher than 100 m. than appropriate signalling and
marking on navigation maps is needed ),
• Main Headquarters of Civil Defence, Headquarters of State Air Force, etc.
When the investment is in conflict with plans of the local Development, or the investor
does not obtain all of necessary permissions, the Municipal Building Supervision and
Land Development Department Regulation may refuse the building decision.
The amount of permissions needed depends on the Municipal Building Supervision and
Land Development Department
The land development decision.
In most cases lands with good wind potential are agricultural lands thus the investor
should apply to the Municipal Building Supervision and Land Development Department
for the decision allowing to change the development of the land. The related fees to the
41
decision should be covered by the municipality (L.B. no 89 point. 415 1994), but in
reality the investor must pay for them.
Connection to the grid.
The local distributor is obliged to connect the generator to the grid if the relevant
requirements are fulfilled (Law Bulletin no. 85 2000). In most cases the new connection
lines are needed (a few hundred meters) and almost always the investor must pay for
the connection. Only when power lines are planned in the land development plans the
investor pays only 25% of a total connection cost.
The first step made by the investor should be an application to the local distribution
utility for connection conditions. The investor should present following the documents:
land property right, technical parameters of the wind farm, technical expertise about the
influence of the new connected turbines on the grid (L.B. no 85 point 957 dated
13.10.2000). The conditions should be defined within 3 months. After that period the
investor has 2 years to sign a connection agreement [13].
The farm can be connected to the grid after fulfilling all of the detailed requirements of
the local distribution utility. (L.B.. no 85 point 957). The investor is allowed to start the
building process only having signed the connection agreement.
Building permits.
The are no specific normative legal regulations regarding stationary wind energy
construction in Poland. Therefore, it necessary to follow the general regulations (L.B. no
89 point 414 1994) that may apply to the specific farm.
42
6. Legislation
The development of the Polish wind power market must be considered within the
legal framework at both the national and international level. The appropriate legal acts
are briefly described below.
6.1. International framework
Poland signed United Nation Framework Convention on Climate Change (UNFCCC) in
1992 and ratified it on 28 of July 1994 becoming party to the convention. According to
UNFCCC the countries agreed to undertake efforts to mitigate the climate change.
The climate change as a result of human industrial activity is a growing threat for
humankind. CO2 emissions from industrial activities are considered as the main gasses,
which create the greenhouse gas effect, or global warming. During the Climate
Conference in Kyoto this threat and the need for action has been recognized by a large
number of politicians and policy makers worldwide. The international community has
made commitments to halt the growing CO2 emissions. The Kyoto protocol specifies
quantitative limits of GHG emissions and commitments of UNFCCC countries of their
individual emission reductions. Parties to the Convention are obliged to reduce GHG
emissions (mainly: CO2, CH4, N2O and so-cold industrial gases: HFCs, PFCs and SF6)
by at least 5% relative to the 1990 level (for Poland the base-year is 1988) till 2008 -
2012 [14 ].
Polish commitments are the following
• to stabilise the Greenhouse Gases (GHG) emissions in year 2000 at the 1988 base-
line (UNFCCC Art.4.a and 4.b.)
• according to the Kyoto Protocol Poland declared to reduce the GHG emissions by
6% compared to the 1988 level in the first clearing period:2008-2012.
This 6% reduction will become binding once Poland has ratified the Kyoto protocol.
The Kyoto Protocol has also set a basis for the so-called flexible mechanisms: Emission
Trading (ET), Joint Implementation (JI), Clean Development Mechanism (CDM) [15].
Those flexible mechanism are wider described in the chapter dealing with financial
issues.
43
6.2. Polish Legal Framework
6.2.1. Development Strategy of Renewable Energy Sector.
The strategy makes the political background for development of renewables. The main
aim of the Strategy is to increase the share of energy from renewable sources in
Poland’s primary energy balance up to 7.5% in 2010 and 14% in 2020 respectively [7].
In accordance with the existing prognosis it is possible that Poland may not reach the
target in 2010.
But the aim of the document has also political meaning to encourage further action for
sustainable energy development and to emphasise importance of renewable energy
sources.
6.2.2. Polish Energy Act
The Polish Energy Act was accepted by the Polish Parliament in August1997 and
entered into force in January 1998 [9]. Since then it has been amended several times.
The Act defines the principles for developing a national energy policy, for the supply and
use of energy, and for the operation of energy enterprises. It also defines the agencies,
which have jurisdiction over the issues of fuel and energy economy. The purpose of the
Act is to create conditions to provide energy security, rational use of energy, and the
development of competition. Competition is considered to be an important factor for
environmental protection, decreasing costs and safeguarding customer interests [16].
The energy law defines the conditions of conducting economic activities in the energy
sector, imposes certain obligations on economic entities, and guarantees certain rights
for them. The key provisions of the law include:
• the establishment of a solid legal framework to define the rights and duties of
producers, distributors, and users of energy and to establish licensing procedures;
• the foundation of an independent regulatory authority to ensure competition within
the energy sector;
• the guarantee of Third Party Access (TPA) of enterprises to energy distribution grids
or pipelines, provided that the third parties produce energy domestically and have
met contractual and governmental obligations.
44
The major task of the new law is to introduce a competitive market in the electricity and
gas industries
Several articles of the Act deal with renewable energies.
• Article 3 item 20 – defines unconventional power sources as those which do not use
organic fossil fuels ,
• Article 3 item 21 – defines renewable energies –as those which use accumulated
solar energy in different forms especially hydro energy, wind energy, biomas,
photovoltaic energy.
It should be noted that in the subsequent amendment presently discussed, the notion of
unconventional energy source has been eliminated and only renewable energy sources
are taken into account.
• Article 9 item 3 –stipulates that the minister, responsible for economic affairs, may
oblige, in form of a decree, the energy utilities to buy electricity from unconventional
or renewable sources or electricity co-generated with heat, also heat from
unconventional or renewable sources and precisely determines their range of
responsibility.
• Article 15 item 7 – states that the principles of the energy policy should promote
development of the unconventional and renewable energies ,
• Article 16 Item 1-states that energy utilities are obliged to develop plans to secure
present and future demands for gas fuels, electricity or heat, taking into account
modernisation, extension and construction of new unconventional and renewable
energy sources (Item 3.2).
• Article 32 Item 1–states that when producing electricity with the total power over
5 MW the appropriate licence is needed
• Article 56 Item 1a- states that those who do not obey the law imposed in art. 9 item 3
will be penalised accordingly,
• Article 56 Item 3 defines Penalties for breaking the power purchase obligation The
amount of penalty can not exceed 15 % of income of the punished entity in the
previous year.
45
6.2.3. Ordinance of the Minister of Economy on Electricity PurchaseObligation
The government of Poland tries to stimulate the generation of renewable energies by a
new ordinance to the Energy Law that came into effect as of December 15th 2000 [17].
The Ordinance stipulates that power utilities had to purchase 2.4% of the electricity from
renewable sources in 2001. This percentage will be gradually increased up to 7.5% in
2010. Although the current Polish government is surprisingly sceptical whether these
levels will be reached, penalties have been imposed on energy utilities that did not meet
these targets. However, the penalties were rather symbolic. Therefore energy utilities
are waiting to see what will happen because the Ordinance to the Law is new and
although some penalties for “breaking” the Law have been imposed, there are still some
ambiguities. It is worth to note that the obligation is not specifically concern the wind
energy, and it will face competition from much cheaper renewables such as.
hydropower.
According to the Article 1 Item 1 of the ordinance energy utilities are obliged to buy
electricity and heat from unconventional or renewable sources connected to the
common grid regardless of the installed particularly electricity and heat from:
♦ hydro plants,
♦ wind plants,
♦ biogas , especially obtain from :
- waste water treatment plants,
- municipal waste disposal sites,
- agricultural waste processing,
♦ biomass,
♦ biofuels,
♦ solar photovoltaic cell,
♦ solar heat generation collectors,
♦ geothermal heat.
46
Item 3 characterises the common network mentioned in Article 1 Item 1 as the
electromagnetic grid on the national territory and a heat network connected with a
relevant heat source.
Article 2 stipulates that the obligation mentioned in Article 1 Item 1 shall be deemed
fulfilled if:
the share of electricity in the actual total annual sales of electric from unconventional or
renewable sources is at least: 2,4% in 2001, 2,5% in 2002, 2,65% in 2003, 2,85% in
2004, 3,1% in 2005, 3,6% in 2006, 4,2% in 2007, 5,0% in 2008, 6,0% in 2009, 7,5% in
2010 and subsequent years. This is illustrated in Fig. 11 where the yellow parts
represent the increase over the target for 2001.
Fig 11. Obligation of energy utilities to purchase energy from unconventional and
renewable sources.
0
2
4
6
8
Tota
l sha
re o
f ren
ewab
le e
nerg
ies
in
ener
gy b
alan
ce, [
%]
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Years
47
Article 3 states that the obligation considered in Article 1 Item 1, does not apply to:
• electricity or heat generated outside the territory of the Republic of Poland
• electricity co-generated with heat, with the total gross efficiency of fuel chemical
energy into electricity and heat not less than 65%, calculated as an average figure in
a calendar year in which the electricity purchase is effected
• electricity produced by pumped water in pump-storage power plants
• electricity or heat from nuclear fission
Article 4 Item 1 stipulates that the justified (reasonable) costs of electricity purchase,
incurred in connection with meeting the obligation of Article 1 Item, can be included in
the calculation of tariffs of the energy company making the purchases. It is assumed that
the cost burden on each electric energy unit sold is the same for all customers.
6.2.4. Power Purchase Obligation – Meeting the Target
After one year of functioning of the Ordinance of the Minister of Economy of 15
December 2000 on electricity purchase obligation, energy utilities were asked to prepare
reports about electricity purchases from renewable sources. The questions concerned
the amount, kind and price of traded renewable energy in 2000. The results were
surprising. Three of the energy utilities, i.e. STOEN S.A., GZE S.A. oraz ZE Tarnów
S.A., did not purchase any electricity from renewable sources apparently there are no
green energy producers in their service area. The share of electricity from renewable
sources varied from 0,001% in ZE Kalisz S.A. up to 27,33% in ZE Toruń S.A. However
ZE Totuń S.A. is the owner of the big hydroplant where it has purchased most the of
required green energy. Only 8 of 33 energy utilities fulfilled the purchasing in 2000 and
in 2001 there was no a great difference. Additionally, penalties for breaking the law have
been imposed (Art. 56 point 1a of Energy Act). However, as mentioned above they were
rather symbolic.
The situation of other energy utilities in 2000 is presented below in the table.
48
The name ofenergy utility
Theestimated
performanceof renewable
energypurchasingobligation
Beskidzka En S.A. 2,51%Będziński ZE S.A. 0,01%Elbląskie ZE S.A. 1,07%ENERGA 1,50%En Kaliska S.A. 0,001%En Poznańska S.A. 0,59%En Szczecińska S.A. 0,81%Lubelskie ZE S.A. 0,02%Łódzki ZE S.A. 0,01%Rzeszowski ZE S.A. 0,68%ZE Białystok S.A. 0,28%ZE Bydgoszcz S.A. 3,26%ZE Częstochowa S.A. 0,22%ZE Gorzów S.A. 0,15%ZE Jelenia Góra S.A. 6,35%ZE Koszalin S.A. 1,50%ZE Kraków S.A. 6,08%ZE Legnica S.A. 0,03%ZE Łódź-Teren S.A. 1,06%ZE Opole S.A. 1,48%ZE Płock S.A. 0,39%ZE S.A. w Olsztynie 1,65%ZE Słupsk S.A. 5,26%ZE Toruń S.A.-ogółem 27,33%ZE Toruń S.A.-bez EWWłocławek 0,27%
ZE Wałbrzych S.A. 0,47%ZE Warszawa-Teren S.A. 1,991%ZE Wrocław S.A. 2,93%Zamojska KE S.A. 0,18%ZEORK S.A. 0,13%Zielonogórskie ZE S.A. 0,13% Th
e m
inim
al sh
are
of e
lect
ricity
from
rene
wab
le so
urce
s in
the
tota
l sal
e of
ener
gy u
tiliti
es in
200
0 –
2,4%
49
6.2.5. Ordinance of Minister of Economy Concerning Detailed Principles ofSetting Energy Tariffs
In accordance with the Polish Energy Act, Energy utilities are obliged to submit
calculation of their tariffs to the Energy Regulatory Authority in order to have them
approved [18].
The mechanism for setting prices is based mainly on the calculation of the so-called
justified (reasonable) costs. At the moment it is hard to define the meaning of such
reasonable cost. If one assumes that reasonable costs are costs that guarantee income
one can consider this costs as expenses in order to get a profit. In this aspect
reasonable costs of running wind power plants are: the depreciation, taxes and local
fees, insurance costs, financial costs, administrative costs, maintenance costs, salaries,
etc.
Additionally, there are also some specific factors that influence the price fixing. These
factors cause that the price of the wind energy in individual countries or regions is
different. Wind energy is strictly connected with the average annual wind speed.
However, even more important is the schedule of wind speed. Obviously the higher is
annual wind speed the lower are energy prices. According to International Energy
Agency (IEA), prices of wind energy are comparable to prices of energy from
conventional sources if the average wind speed is higher then 6.5 m/s. One should
consider the influence of the interest rate on energy prices especially when talking about
high cost technologies like wind turbines. The lower is the interest rate the lower are
energy prices. The repayment period has a crucial influence. The shorter is repayment
period the higher is its cost, what directly affects the energy prices from the expensive
energy sources. Giving a loan, banks and other financial institutions take financial risk
into consideration. The higher is the risk the higher is the discount rate. Wind turbines
are characterised as the medium risk investment and this risk has a tendency to
decrease. One should also consider costs of wind turbines. It is predicted that the
installed power of wind turbines will double every three years and the cost of wind
turbines should decrease about 15% in the same time.
50
In Chapter I Ordinance describes detailed principles of setting the tariffs, defines the
production unit as a separated complex of equipments belonging to an energy utility
designed for the electricity production, described by the technical and trade data.
In Chapter II Article 3 the Ordinance states that energy utilities set tariffs in way
assuring:
• covering reasonable costs,
• protection of consumers interests against the unjustifiable prices level,
• elimination of “hidden” subsidies.
Article 4 states that energy utilities set tariffs adequately to the economy of electricity
delivery, types and character of consumers and their demand.
Article 6 dictated that the tariff is established for 12 months.
Article 7 stipulates that the energy utilities dealing with electricity production should
clearly specify in their tariff:
• the electricity prices,
• fees for reserve powercapacity,
• fees for system services,
• rebates for failing to meet quality standards of offered services,
• financial penalties for an illegal electricity consumption.
Article 10 of Chapter 3 states that reasonable production costs should include:
• planned costs of annual activity of energy utility including financial costs,
• planed annual cost of modernisation, development and investments in the area of
environmental protection.
51
7. Financing of Wind Energy
The development of wind energy projects is facing financial problems. Wind
farms belong to technologies in which cost of the electricity production is relatively high.
However, in a number of cases wind energy can be competitive if financing of wind
turbines takes advantages of available soft credits or subsidies [19]. Experiences show
that the most important sources that facilitate financing of wind ventures are Polish
sources such as ECOFUNDUSZ or the National Found for Environmental Protection and
Water Management. These institutions give preferential loans and grants, which
usually do not exceed 50% of the project cost. Notwithstanding the funds
available in Poland, the possibilities of utilising foreign financial sources are
growing. It is possible to apply to the international institutions such as World Bankor the Global Environment Facility. It is worth to note, that there are some additional
possibilities of financing resulting from The Kyoto Protocol so called Flexible
Mechanism. The foreign and national founding sources are presented below
respectively.
7.1. Foreign Founding Sources
7.1.1. Flexible Kyoto Mechanisms
Emission Trading Kyoto Protocol allows transferring both reduced emission reductions and emission
quotas between UNFCCC Anex I countries. Industrialised countries can finance GHG
emission reduction abroad in order to obtain so-called “emission reduction units” Those
units can be accounted for as fulfilling the commitment of the “donor” country. Poland is
included in the list of countries where the emission transfer can take place.
The main arguments for Emission trading are:
• trading the emission reduction units(ERU) leads to more efficient use of the available
resources,
• commitments of industrialised countries to reduce theirs emission, oblige them to find
out the cheapest way to obtain it,
52
• emission reduction costs are relatively high in industrialised countries while in non-
OECD countries are relatively low.
Joint Implementation
The developed countries have already taken advanced technologically steps that have
led to GHG emissions reduction. Further reduction would then means significant
expenses. However in the global perspective it does not matter where the GHG are
being reduced. There may exist a significant potential for low-cost options in countries
with economies in transition and in developing countries. As a consequence, the
developed countries take interest in Joint Implementation and are willing to reduce the
GHG emission in countries where unit prices of GHG reduction are much lower. The
general idea is that one country (the "donor" country) might seek "credit" towards its own
target reductions by investing in greenhouse gas reductions in another country (the
"host" country).
The international co-operation mechanism within the confines of UNFCCC - Joint
Implementation offers significant benefits for participating countries, for instance:
• increase of GHG emissions reduction,
• technology and know-how transfer ,
• foreign investments,
• job creation.
Poland, can participate in JI projects both as the financing party or a beneficiary. The
relatively low cost of the reduction of greenhouse gas emissions, as well as a well-
developed institutional background to support the implementation of investment projects
result in that Poland is perceived mainly as a host country. The possible projects
concern co-operation between foreign and Polish private companies, local governments,
and state-owned companies. However fulfilling the UNFCCC commitments is the
responsibility of the national governments rather then companies or local
administrations. The JI projects implemented in Poland are handled by the JI
Secretariat, established in December, 1995, currently operating within the structures of
the Executive Office of the Climate Convention, located within the National Fund for
Environmental Protection and Water Management (NFOSiGW).
53
Clean Development Mechanism
Clean Development Mechanism refers to GHG reduction projects between the
developed and developing countries, which do have reduction commitments. The CDM
does not apply to Poland and is briefly described only for completeness. The CDM
allows only officially confirmed emission reduction transfers. The main aim of CDM is to
gradually involve the Third World countries in the international climate policy.
Additionally this mechanism should contribute to transfer of technology and know-how to
developing countries.
7.1.2. World Bank
Poland rejoined the World Bank in 1986 and Bank lending to Poland started in 1990.
Since then the Bank has committed over US$ 5.0 billion for 33 operations. About US$
2.9 billion of this amount has been disbursed and US$ 712 million repaid (as of
September 1999).
Although the World Bank lends for fossil fuel projects it also continues to support
projects with global environmental benefits. Synergies with local environmental
objectives and the additional costs required to secure these global benefits must be fully
funded by international sources of financing such as the Global Environment Facility.
This is consistent with the Bank's commitment to support international conventions on
global issues, such as the United Nations Framework Convention on Climate Change,
and to assist borrower countries to meet their obligations under such conventions.
7.1.3. The Global Environment Facility
The Global Environmental Facility is a financial mechanism that provides grant and
concessional funds to help finance projects to protect the global environment and to
promote environmentally sound and sustainable economic development. The GEF was
established to forge international co-operation and finance actions to address four
critical threats to the global environment: biodiversity loss, climate change, degradation
of international waters, and ozone depletion. Related work to stem the pervasive
problem of land degradation is also eligible for GEF funding.
Engaging the Private Sector
54
It is clear that global environmental problems like climate change and biodiversity can
be solved only if the private sector participates in its vast technical, managerial and
financial resources and expertise.
The private sector is recognized as an important stakeholder in GEF activities and has a
critical role to play in addressing the global environmental challenges in partnership with
the GEF. The GEF encourages the private sector to seek opportunities to collaboratively
engage in the identification of project concepts and objectives as well as in the
financing, and monitoring and evaluation of GEF projects.
7.1.4. PHARE – European Union Assistance Program
The PHARE program has been in place in Poland since 1990. The program was
created on European Union’s own initiative in order to support the countries of Central
Europe in the process of economic transformation and strengthening of democracy to
the stage where they are ready to assume the obligations of EU membership. The main
priorities for Phare funding are common to all countries, although every one is at a
different stage of transformation. The key areas include restructuring of state enterprises
including development of energy and environment safety.
7.1.5. Instruments for Structural Policies for Pre-Accession.(ISPA)
The ISPA found is designed for accession countries to facilitate financing of ventures
in the field of environmental protection and transportation, and help them to adapt to the
European Union standards and requirements. As noted in Agenda 2000, the applicant
countries generally face much greater environmental problems than the present Member
States, particularly with regard to water pollution, waste management and air pollution.
Major efforts will therefore be needed, involving considerable amounts of technical and
financial aid from the Union. Over the period from 2000 to 2006, a total of EUR 1 040
million a year (at 1999 prices) has been made available for infrastructure projects in the
field of environment and transport.
7.1.6. The Altener ProgramThe Altener program was set up by the European Commission to promote renewable
energy use in the European Union. The aim was to reduce annual EU CO2 emission
55
levels by 180 million tonnes by 2005. One of the targets of the Altener program was to
treble electricity production from renewable sources, excluding large hydro sources,
from 25 Terawatt hours in 1991 to 80 TWh in 2005. The goal for wind energy was 8,000
Megawatts of installed capacity, which should provide 20 Terawatt hours of electricity
per year, i.e. 25% of the contribution of the new renewables. The program was also
opened for accession countries to help them to develop and promote the utilization of
renewable energy.
7.1.7. Bilateral Programmes
Bilateral assistance has been realised in Poland since 1990 and it has been provided
on the basis of bilateral agreements. In over 70 % is earmarked for investment projects.
Countries taking part in this effort are: Belgium, Denmark, Finland, Holland, Japan,
Norway, Germany, Switzerland, Sweden, USA and Great Britain.
56
7.2. Polish Founding Sources
7.2.1 Foundation EKOFUNDUSZ (ECOFUND)
Ecofund is Polish financial institution which manages the Debt for Nature swap (eco-
conversion) funds. The idea is to use part of Polish debt to the “Paris Club” in
environmental protection investments in Poland. The following countries agreed to
convert part of their debt: USA, France, Switzerland, Sweden, Italy and Norway. In total
the funds at stakes are over 570 million dollars [20].
Wind energy which contributes to GHG emission reduction is one of priorities of the
Ecofund is assistance. The financial aid is given in form of non-returnable subsidies or
soft loans .The size of subsidy depends on the nature of the investment. For renewable
energy undertakeings the subsidy can reach up to 50% of total investment cost. An
important element of EcoFund’s strategy is thorough monitoring of the use of the
awarded money during the project execution. To this end, every project is divided into a
number of stages finished with technical and financial acceptance inspections.
7.2.2 The National Found for Environmental Protection and WaterManagement The National Found for Environmental Protection and Water Management is Poland’s
largest institution for the development of the environmental sector. The National Found
was created in 1989 in order to improve the state of the natural environment in Poland.
The National Fund is responsible for adapting policy and regulations to the rules
applicable within the European Union. The aim of the National Fund is to finance
projects, whose implementation will be the most beneficial to the environment. The
applicant, who submits an application for such a project, may receive financial
assistance from the National Fund. The applicant also makes choice of appropriate
technology and contractor in accordance with the Public Tender Law. The main sources
of financial assistance are loans and subsides. Preferences in grating loans are based
on applying lower interest rates in relation to commercial credits, a possibility of partial
remissions and on grace. Depending on the character and scale of undertaking, as well
as on the financial and economic condition of the borrower, the interest rates are applied
in relation to the official rediscount rate i.e. the rate at which the Polish National Bank
57
lends money to banks. In case of loans for renewable energy ventures the loan interest
rate is 0,5 of the rediscount rate. The loan may be partially remitted after fulfilling all
stipulated conditions, especially timely completion, full compliance with all the conditions
of the agreement and achieving the planned environmental effect of the investment.
Subsides are extended mainly for projects with high levels of risk (pilot projects, the
development of new technologies) or of an experimental nature. Another forms of
financing projects in the field of environmental protection by the National Fund are
supplements to commercial credits. This compensates for the difference in interest rates
of commercial bank credits and the preferential rates used by the National Fund.
Supplements to credits allow preferential financing of environmental projects from the
financial resources of commercial banks. National Fund also supplies debt financing to
projects that benefit the environment. National Fund is also interested to take an equity
share in such projects.
Fig 12. Forms of Environmental Protection Funding by the National Fund (MPLN)
58
7.3. Commercial Sources
Financing investments of wind power plants is one of the most complicated issuses
because is connected with number of risks. The most important of them are:
• correctness of the business plan and market analysis, economic conditions in trade
and whole market , etc.,
• technical complexity of process,
• building permits, licences, etc.
Additionally the pay back time is quite long. It is worth to underline that all these risks
could be significantly reduced [21].
For a long time investing in wind turbines in Poland was perceived as a hobby rather
than a financial venture. Recently, as a result of huge development of wind turbines
efficiency, decreasing costs of wind turbines and obligations of energy utilities to
purchase electricity from renewable sources, investing in wind energy has become a
serious challenge for commercial investors. The investor can now easier sell produced
electricity because of the law regulations. Moreover, there is a chance to enter a long-
term agreement of electricity delivery with power utilities which secure a stable long-term
income. The risk connected with technological complexity can now be considered as
moderate. Although there are still risks connected with turbine location it is worth to
emphasis that turbines themselves are mass-produced and have a guarantee period.
Considering the size of engaged funds, possibility of long-term income protection,
investing in wind turbines is comparable to investing in property.
There are some issues that should be considered before investing in wind power plants,
mainly:
• choice of the suitable location in order to optimise project efficiency
• the correct financial structure: on the one hand ensuring sufficient level of investment
protection and on the other, to make the most of available financial sources
• appropriate income negotiated with energy companies
• choice of a suitable turbine supplier ,assuring high quality and efficiency of wind
turbines
It is commonly known that investments in wind turbines requires huge financial
resources. This mean necessity of looking for different potential investors. Obviously,
59
there is a possibility to access the preferential funds such as NFEPGW or Ekofundusz.
Nevertheless, these sources (although are very important to decrease the total cost of
investment) providy only a basis for proper financing. Thus is worth to underline that a
commercial venture requires commercial financial sources. The main methods to
finance investments using external sources are:
• leasing
• securities emission
• investment credits
7.3.1 The Bank of Environmental Protection In the area of wind energy The Bank of Environmental Protection worked out the
programme supporting small wind turbines (up to 0,75 MW) on following conditions:
• maximum amount of loan -1 million zlotych. Loan will cover less then 50 % of total
investment cost,
• maximum period for realisation - 6 months since the loan has become available for,
investor
• credit interest rate -0,4 of the rediscount rate.
7.3.2 The Bank of Export Development
• offers long-term financing period (up to 15 years) for potential investors,
• amount of own engaged capital: 25% of total financial package,
• variable interest rate in zlotych of 19,5%-21,5% for 3 months,
• fixed interest rate in zlotych of 13%-15%,
• foreign exchange, variable interest rate of 6,3%-8,3% for 3 months,
• foreign exchange, fixed interest rate credit of 6,5%- 8,8%.
60
8. Major Wind Farm Projects in Poland
8.1. Projects Completed
Presently, there are only two professional wind farms in Poland: in Barzowice and
Cisowo. There iare also several individual wind turbines which cannot be considered as
wind farms. The major of completed projects are listed below in the table and the biggest
ones are briefly described.
Location Power [MW]
Lisewo 150
Swarzewo 95
Zawoja 160
Wrocki 160
Kwilcz 160
Slup 160
Rembertow 250
Starbiewo 250
Swarzewo 1200
Rytro 160
Cisowo 660
Rymanow 320
Nowogard 255
Barzowice 5000
Cisowo 18000
Table 8. Completed wind power projects.
Barzowice Wind Farm the first Polish 4,99 MW wind farm is located in Barzowice in the
Darłowo Municipaity. The wind farm consists of 6 turbines of 833 kW each. The capacity
of wind turbines, which is below 5 MW allows producing electricity without licence as
otherwise would be required by Polish Law. Soon after it has been opened the Koszalin
Energy Utility refused buying the electricity produced by the Barzowice Wind Power
61
Plants SA. Finally the new price of purchase of the electricity was set i.e. 10 gr for 1
kWh, the price that is equal to the price of the electricity produced in lignite power plants
Cisowo Wind Farm is the biggest wind farm in Poland consisting of 9 wind turbines
[Vestas] with total power of 18 MW. The farm is located on the ground belonging to
Koszalin distribution utility, which lease the site. The investor has a long term power
purchase agreement with Koszalin Utility. There are additional 4 wind farms expected to
be added to existing farm with the total capacity about 28 MW.
8.2. Projects in the Development Phase
Despite of the existing barriers the wind energy sector is still developing. Additionally,
the approach of distribution utilities to wind energy is changing for better and it is
possible that they will not oppose the development of wind energy sector any longer. As
an example, several different projects of wind farms in the Koszalin distribution utility
service area are presented below. Tables show the plans of wind for different stages of
completion [22].
Location Power [MW]
Barzowice 3
Barzowice 4,5
Drozdowo 9
Cisowo-Zakrzewo 10
Cisowo 2
Stramnica 4
Table 9. Farms that received the connection conditions in Darlowo Commune
Location Power [MW]
Place Commune
Budzistowo Kolobrzeg 12
Karscino Karlino 60
Moltowo Goscino 20
Wartkowo Goscino 30
Table 10. Farms that submitted the necessary documents to the distribution utility
62
Location Power [MW]
Place Commune
Karcino Kolobrzeg 60
Poblocie Wielkie Karlino 30
Tymien Ustronie Morskie 50
Paszecin Rabino 40
Grzmiaca Grzmiaca 40
Rzepkowo Sianow 100
Swierszczewo Bialy Bor 50
Table 11. Farms that are expected to be connected to the grid.
8.3 Joint Implementation Project: Skrobotowo Windpark
This is an example of the first Polish Joint Implementation Project in framework of the
Dutch-Polish Memorandum of Understanding. The project concerns a 60 MW wind farm
located in the Northwestern part of Poland in the Karnice Municipality, financed partly by
Dutch government in exchange for Emission Reduction Units, ERUs. The wind farm will
consist of 30 wind turbines of 2 MW each. Nuon International Projects, based in
Arnhem, and Epa, based in Szczecin, Poland, jointly collaborate in the development and
operation of this wind farm. Nuon, one of the largest multi-utility companies in The
Netherlands will be the main shareholder in the Special Purpose Company (SPC) to be
founded for realisation and exploitation of the plant. EPA will primarily develop the
project depending on acquisition of the necessary permits. The main turnkey contractor
will be Vestas, realizing the project up to the start of operations. Moreover, Vestas will
support the operations and maintenance by providing warranties to the project, and train
EPA staff to perform maintenance. Also the National Fund for Environmental Protection
and Water Management is interested to take an equity share in the project.
The wind farm is expected to generate 125,000 MWh per year, and has an assumed
operation lifetime of 20 years. Without implementation of this project the electricity
demands of 125,000 MWh would be satisfied by coal and gas fired plants. Furthermore,
63
through implementation of this project know-how of wind energy will be transferred to
Poland. It can pave the way for follow-up projects. The project is expected to be
operational as of January 1st 2003 [23].
Wind Resource Assessment
The project is split up in two parts, Skrobotowo village (36 MW) and Drozdowo (24MW).
A wind study has been carried out for the envisaged wind farms in the neighbourhood of
Skrobotowo and Drozdowo. Basis on measurements at Wrzosowo executed during the
period of September 1999 – December 2000 it has been derived that the mean wind
speed are:
at 40 meters 6.4 m/s
at 30 meters 5.6 m/s
at 20 meters 4.7 m/s
Accurate monitoring of the mean wind speed is essential in order to be able to
determine the final amounts of ERU’s.
The accessibility to the two sites should be no problem. It is expected that a new
substation 110/20kV or 110/10 kV needs to be constructed for this project. If a new
station is to be built it will be located near or under the 110 kV grid line running north of
the Drozdowo site.
Guidelines for JI projets
The validation of the project was performed in accordance with the ERU-PT Guidelines
for JI projects, version 1.0, issued by the Dutch Ministry of Environmental Affairs in May
2000. This validation report focuses on the validation of the baseline study and the
monitoring plan. Applicable guidelines are set out in volume 2A (Baseline studies,
monitoring, reporting Guidelines for JI-projects’, Ministry of Environmental Affairs, May
2000), chapters 2 and 3.
The essential articles of the baseline study are:
-Project information (articles 2.1 and 2.2)
-Greenhouse gas sources and system boundaries (article 2.3)
-Description of the current delivery system (article 2.4)
-Key factors influencing the baseline and the project (article 2.5)
64
-Selection of the most likely baseline (article 2.6)
-Estimation of project emissions (article 2.7)
-Estimation of the baseline emissions (article 2.8)
-Crediting time (articles 2.9)
-Estimation of emission reduction (articles 2.10)
-Evaluation of additionality (article 2.11)
All the necessary criteria and methodologies for control of operations, recording,
monitoring, measurement, reporting and calculations of emission reductions or removals
are included in the monitoring plan, including factors that have influence on baseline
validity.
Projected ERUs
The amount of avoided Green House Gases, GHG emission will be calculated on the
basis of coal consumption needed, in the theoretical power plant, to produce the same
amount of electricity that wind farm will do (baseline). The amount of ERU's (Emission
Reduction Units), transfer to the Dutch side will result from the amount of net electrical
power production, sold to Polish Power Grid Companies, during the commitment period.
During the years 2008 - 2012, the Dutch side will receive over 580 of ERUs as
recompense of financing the project.
In the project, scenario ”Continuation of the current situation” was selected as the most
likely baseline to be used for this study. According to EUROPROG 26th 1998, the
average electricity produced in Poland in 2008-2012 amounts to 188.70 TWh/year. In
the same time CO2 equivalent emissions will be at the 178,600 kton/year level. NOx and
SO2 emissions are estimated adequately at 290 and 600 kton. It follows that the average
emission factor used to calculate the total CO2 emission is 0.94648 kton/TWh for the
budget period.
As mentioned above the farm is expected to generate approximately 125.078
GWh/year. The own electricity use of the project will be 1.787 GWh/year. Thus, the net
output of the project is calculated at 123.291 GWh/year and the annual emission
reduction 116.7 kton per year (116,700 ERUs) or 583.5 kton CO2 for the budget period
(583,500 ERUs). Assuming that the price per ERU will be 9 Euro, the total ERU’s will
amount to 5,251,500 Euro in the budget period.
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9. Summary
One of the most important elements of sustainable energy development is
utilization of energy from renewable sources. By the beginning of 2002, global wind
power installations have reached 25,000 MW [24]. This provides enough power to
satisfy the needs of around 14 million households, more than 35 million people.
Recently in Poland there is almost 30% electricity overproduction. With almost
60% share of energy generated from coal in state energy balance the Polish coal lobby
tries to restrain the development of any new energy sources. The long-term policy of
coal utilisation and subsidies to energy system in the past lead to difficulties in the
development of renewable energy sources. The conventional energy sources still not
pay their full external costs, and are distortedly subsidised.
Wind energy is a modern approach in the Polish energy system. In The European Union
the system supporting utilisation of energy from renewable sources has been functioning
for 15 years. In Poland it exist only for short a time and for this reason it will be very
difficult to obtain the required share of the renewable energy in energy balance in 2010.
The development of wind energy offers opportunities for the local and regional societies
development, energy independence, diversification and decentralisation of energy
sources, jobs creation and environmentally oriented modernisation of the energy sector.
Estimates indicate that realisation of Development Strategy of the Renewable Energy
Sector will contribute to 30-40 thousands jobs, and what is very important, to reduction
of GHG emission of 18 million ton.
The Northern part of Poland is the best for wind farm location. Unfortunately it has
a very poorly developed transmission grid. The possibility of electricity transmission to
the other parts of Poland seems to be limited. To make matters worse there are still
unclear procedures of power purchase agreements. The local distribution utilities are not
willing to purchase “expensive” electricity from wind farms. Although the cost of wind
power from efficient wind farms has declined significantly, it is still almost two times
“higher” then electricity from the conventional sources. It is worth to mention that big
system hydro power plants are included into renewables in Poland.
66
The foreign investors are very interested in developing wind market because in Poland
because it is good business for them. There is lack of producers of professional wind
turbines who can compete with foreign technology. It is very important to oblige the
foreign companies to produce as many components of wind turbines as possible here in
Poland.
There are two significant financial sources that provide support to wind energy:
EKOFUNDUSZ (ECOFUND) and The National Found for Environmental Protection and
Water Management (NFOSiGW). All existing wind farms in Poland would not have been
built without the financial help of these institutions. The most popular form of financial
assistance is soft loan with preferential interest rate. There is a chance for additional
financing. Poland as a party to United Nation Frame Convention on Climate Change
(UNFCCC) is obliged to stabilise its GHG emissions and according to the Kyoto Protocol
to decrease them by 6% by 2008-2010. Poland as an Annex 1 country is also allowed to
participate in the flexible mechanism ventures.
As with any new market entrant, policy plays a huge role in helping to overcome market
barriers. The government of Poland tries to stimulate the generation of renewable
energies i.a. by a new ordinance to the Energy Act that has entered into effect on
December 15th 2000. The Ordinance stipulates that power utilities are obliged to
purchase 2.4% of the electricity they sell from renewable sources in 2001. This
percentage will gradually increased up to 7.5% in 2010. The government of Poland has
also accepted the Development Strategy of Renewable Energy Sector. The main goal is
to obtain 7,5% share of renewable energies in the state energy balance in 2010 (almost
half of the European Union’s target). The undertaken actions should lead also to obtain
14% share of renewable energy in 2020. In fact only 8 of 33 energy utilities fulfilled the
renewable energy purchase obligation in 2000 and in 2001 there was no a big
difference. Merely symbolic penalties have been imposed on the others. Consequently,
energy utilities have assumed a “waiting position” because the Ordinance to the Law is
new and there are still some ambiguities whether the penalties will be applied or not.
The future of wind energy will most likely depend on a combination of prices and political
support. Government should be aware of the need for provisions to encourage
renewable energy as they restructure and privatise the power market and grasp the
67
opportunity offered by wind energy to provide both a secure power supply and to combat
Global climate change. In the light of EU accession and taking into consideration that
Poland has good conditions to develop wind energy market one should expect that the
market become the real market in next few years.
68
Annex I. Micrositing
Turbulence is the variability of the wind at the specific site, mathematically:
where:
σ -deviation during a time period (10 min. - 1 hour)
u -average value during a time period (10 min. - 1 hour)
The value of turbulence generated from obstacles and other wind turbines should be
less than 20%.
The turbines should not be placed closer than length of 3 rotor diameters.
Sites should not be only classified by the mean wind speed but also by the extreme
winds. If the investor does not determine the extreme wind speeds it can lead even to a
catastrophe.
uTI
σ=
<Other
69
The most profitable angle of wind flow on rotor disc is 0 deg. It is worth to mention that
sometimes it is better to place the wind turbine behind a top. Even though the highest
wind speed is right on the top, that can be a more favourable location.
Air temperature is an important descriptor of a wind farm’s operating environment and is
normally measured either near ground level (2 to 3 m), or near hub height. In most
locations the average near ground level air temperature will be within 1oC of the average
at hub height. It is also used to calculate air density, a variable required to estimate the
wind power density and a wind turbine's power output.
Ultimately, micrositing is used to position one or more wind turbines on a parcel of land
to maximize the overall energy output of the wind plant.
0 1000 2000 3000 4000
13001400150016001700
Ter
rain
[m]
Horizontal distance [m]
0 1000 2000 3000 4000
Spe
ed
0 1000 2000 3000 4000-30-20-10
010203040
Flow slope
Terrain slopeTurbine positions
Flo
w a
ngle
[deg
]
70
Annex II. List of Annex I countries
Australia
Austria
Belarus a/
Belgium
Bulgaria a/
Canada
Czechoslovakia a/
Denmark
European Economic
Community
Estonia a/
Finland
France
Germany
Greece
Hungary a/
Iceland
Ireland
Italy Japan
Latvia a/
Lithuania a/
Luxembourg
Netherlands
New Zealand
Norway
Poland a/
Portugal
Romania a/
Russian Federation a/
Spain
Sweden
Switzerland
Turkey
Ukraine a/
United Kingdom of Great
Britain and Northern Ireland
United States of America
a/ Countries that are undergoing the process of transition to a market economy.
71
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