As a country that is undergoing an energy transformation Poland is an attractive market for investors when it comes to the rate of return and safety of their investments. Legislative changes do not discourage professional players thanks to the growing maturity and experience of the renewable energy sector – says Katarzyna Suchcicka, Country Manager at OX2 in Poland in an interview with BiznesAlert.pl.
BiznesAlert.pl: OX2 signed a sales contract for a wind farm in Żary with MEAG, which manages the assets of Munich RE and ERGO. It’s OX2’s first wind project in Poland. What is the goal of this investment?
Katarzyna Suchcicka: The goal of the investment is to provide a working wind farm that includes seven turbines, each with a 2 MW capacity with the accompanying infrastructure. It’s the first project of this type in Poland for OX2 and MEAG. The investment not only opens the door for both companies to our market, but also proves that the ongoing energy transformation in Poland makes it an attractive market for investors when it comes to the rate of return and investment safety. Legislative changes do not discourage professional players thanks to the growing maturity and experience of the renewable energy (RES) sector. OX2 put a lot of effort into employing the best possible staff. We are impressed by the professionalism and engagement of our team that translates into the general image of the renewables sector, which, without passion and persistence, would not attract so many investments.
This is your first wind farm in Poland. Are you planning any other investments in the Polish market?
Opening a business in a new location is a huge endeavor and a challenge. The experience we will get during our first project will give us a solid foundation to grow further. One of our values is responsible ambition. Naturally, we are planning other projects, both in the area of wind energy and photovoltaics. Still, it should be mentioned that the development of the wind sector depends on the amendments to the so-called wind turbine distance bill. We are also open to other technologies, provided that together with the expected returns they will contribute to the development of the society and our planet in a sustainable way that will respect natural resources.
Why did OX2 decide to invest in Poland’s renewables? How do you want to participate in Poland’s energy transformation?
Wind energy in Poland is going through similar stages to those in other European countries. Green certificates are a great example. In Sweden our flag market faced up to the challenge when the certificates expired, similarly to Finland the support ended quickly and unexpectedly. However, the industry is able to handle the lack of support because the technology has developed so much that it is no longer a benchmark for profitability. What we can learn from other markets is to maximally use the wind’s potential. The Polish law still doesn’t allow to install the latest technologies that are not only cheaper, but also limit the amounts of materials and infrastructure. Additionally, their impact on the environment is also smaller, they are safer and more technologically advanced, which naturally translates into lower CO2 emissions and decreased power generation costs. The development of a wind farm takes years and the turbine producers’ technological cycle lasts from one to two years and is getting shorter. In Poland once you receive a construction permit or win an auction there is not much space for optimization, so this potential is underused. Poland’s construction laws do not go well with these types of investments.
OX2 is also present in other countries including Finland, Germany and Lithuania. What are the challenges wind energy will be facing in Poland and across the world from an international perspective?
Entering the Polish market was a natural step for OX2. The most important fact is that our mission is to develop renewable energy sources. According to last year’s data, about 74% of energy in Poland was produced from coal, which means Poland is at the top of the list when it comes to coal reliance in Europe, which is why the potential for renewables is so huge. Our goal is to make sure that every product that we provide to our customers is constructed in the safest, most eco-friendly and efficient way.
Those who are skeptical about RES, including wind energy, often claim this solution is not good for energy security. Other criticisms include issues with recycling and the need to support the development of wind energy by the state and the costs of investments. Would you like to comment on these charges? Does wind energy have more vices or virtues?
Energy security is not based on one energy source, or on focusing on costs only. The power produced by wind turbines compensates for power shortages when other sources are less efficient. The case of photovoltaics is similar. Additionally, this kind of power generation is distributed and cheaper, which is reflected in the dropping reference prices. The key is to balance things out and not limit market rules. Recycling is and will be a challenge to the industry, so I think this part needs to mature. The available methods of utilization are still relatively expensive. Granulate made from turbine glades sounds promising, because combustion causes too much emissions. However, I believe that producers have not said the final word yet and this may be yet another incentive to lower production costs and CO2 emissions. It would be perfect if we could reuse 100% of the material. There are already companies that are trying to achieve this goal.
Is wind energy an attractive investment in Poland?
Of course. The investors are very interested and their number is growing. This is what happened to our deal with MEAG. I am hoping new agreements of the CPPA type will appear as well. In Poland this is solution is still fledging, but there is room for development. This is also something that we may expect when it comes to photovoltaics in the near future.
Interview by Patrycja Rapacka