RWE has moved a major step closer to the realisation of its first offshore wind farm in Poland: The Polish Energy Regulatory Office has awarded a Contract for Difference (CfD) to the
F.E.W. Baltic II offshore wind project, which will have a planned installed capacity of 350 megawatts (MW). This confirms that RWE’s project has been selected for the first phase of Poland’s ambitious offshore wind build-out program. The CfD award is subject to final approval from the European Commission.
Back in December 2020, RWE signed a Grid Connection Agreement for the F.E.W. Baltic II project, which is located north of the Słupsk sand bank in the central Polish Baltic Sea exclusive economic zone. Subject to the final investment decision, construction works could commence as early as 2024. Once fully operational, the wind farm would be capable of producing enough green electricity to supply the equivalent of around 350,000 households.
The CfD mechanism provides green electricity projects with essentially a fixed inflation indexed ‘strike’ price for electricity over the project’s initial 100,000 hours of full load generation over up to 25 years of operation. If the electricity price is lower the state compensates the difference to the fixed bid price. If the electricity price exceeds the bid price, the wind farm operator must transfer the additional revenue to the state. This mechanism results in lower financing costs, which in turn lead to lower electricity costs for consumers.
Poland is one of RWE’s strategic core markets in Europe. The company already has a well-established onshore business in the country with a total installed capacity of approximately 390 MW (accounting view) already in operation, and has further onshore projects under construction and in development. In addition, RWE is continuously diversifying its renewables portfolio in Poland by investing in solar projects. As one of the world´s leading renewable energy companies, RWE targets to invest from 2020 until 2022 €5 billion net in renewable energy and to grow its global renewables portfolio to more than 13 gigawatts of net capacity.