AKADEMIA GÓRNICZO-HUTNICZA im. Stanisława Staszica w Krakowie WYDZIAŁ PALIW I ENERGII Praca dyplomowa Imię i nazwisko Artur Wyrwa Kierunek studiów TECHNOLOGIA CHEMICZNA Temat pracy dyplomowej: Wind Energy in the Polish Power System Ocena: Opiekun pracy prof. dr hab. inż. Adam Guła Kraków, rok 2001/2002
Trends in / & Contributions of Wind Energy in the Polish Economy.
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
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
6
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
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
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
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
9
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
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
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.