Poland’s Energy Regulatory Office has awarded a contract for difference (CfD) to the Baltic Power offshore wind project promoted by Northland Power and PKN Orlen
Under the 25-year contract, the project will receive payments covering any negative balance of electricity generated offshore and fed into the grid, which means that Baltic Power will be compensated for the potential difference between the market price of electricity and the strike price set in the CfD.
The award is part of the Polish Government’s commitment, through the Polish Offshore Wind Act, to support an initial phase of 5.9 GW of offshore wind.
Northland Power president and chief executive officer Mike Crawley said, “We are extremely proud to be developing a significant offshore wind project in Poland, alongside our partner PKN Orlen.
“The CfD is a key milestone that provides the project with revenue certainty to proceed with development and confirms our inclusion in the initial phase of offshore wind development in Poland. Full-scale development of Baltic Power will expand our European offshore wind presence and help us to establish an offshore wind hub in the Baltic.”
The CfD was awarded at PLN319.60 (US$85.62) per MWh for up to 25 years and is adjusted to annual indexation by Poland’s annual average consumer price index. The CfD is subject to review and final approval from Polish authorities and the European Commission.
In March 2021, Northland completed acquisition of a 49% interest in Baltic Power from PKN Orlen. The project is expected to have a total capacity of up to 1.2 GW. Construction activity is expected to start in 2023 and commercial operations are anticipated in 2026.
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