Jozwin Wind Farm
Jozwin Wind Farm

Onshore wind

The Polish corporate PPA trend

22 June 2021

In early 2021, we announced the arrangement of two power purchase agreements (PPA) in the Polish energy market. Renewable energy will be provided to Danone in Poland by our Jozwin onshore wind farm and Air Products has signed a Virtual Power Purchase Agreement (VPPA) with Scieki onshore wind farm.

Key facts

Long term

physical power purchase agreement (PPA)

10 year

virtual power purchase agreement with Air Products (VPPA)

Growing

renewable energy PPA trend in Poland

Opportunity

Poland is the largest electricity market in Central Eastern Europe1, with one of the lowest shares of renewable energy in its electricity generation mix historically2. This however, is changing, with the country’s green transition now underway. By 2050, 52% of the country’s power generation is forecast to come from wind, solar and biomass3.

In late 2020 and early 2021, we increased our activity in Poland with the acquisition of the Jozwin and Scieki onshore wind farms. These transactions highlight the growing importance of Poland’s renewable energy market to GIG, as well as the increased focus on the country’s decarbonization goals.

Within this evolving market, we are seeing an increase of corporates setting emission reduction or renewable energy goals and signing renewable energy PPAs to move towards these goals. In 2020, 167 MW of renewable energy was procured through corporate PPAs in Poland - significant growth when compared to the 45 and 19 MW contracted in 2018 and 2019 respectively4.

Danone and Air Products both have operations in Poland and are looking to achieve ambitious renewable energy targets. Danone was looking for an experienced counterparty to collaborate with in structuring a customized, long-term baseload power solution aligned with its RE100 commitment, to power its Polish operations.

Air Products was looking to source renewable electricity to support it’s "Third by '30' goal", to reduce its CO2 emissions intensity (kg CO2/MM BTU) one-third, by 2030, from a 2015 baseline.

Actions

Leveraging our experience and existing relationships in the Polish market, we were able to create tailored solutions based on client needs.

Danone had specific criteria for the procurement of renewable energy, which GIG met by bringing together an intricate set of contracts, structures and concepts across fields of expertise ranging from infrastructure investment, renewable energy trading and operational asset management. We worked with Axpo, a leading utility and energy trading company, to simultaneously establish a physical route-to-market PPA together with balancing services.

Physical baseload power will be provided to Danone’s seven Polish production plants from GIG’s 25.3 MW Jozwin onshore wind farm.

Air Products, a world-leading industrial gases company, was looking to procure renewable energy to reduce the emission intensity associated with industrial gas generation. This supports Air Products ‘Third by ‘30’ target and reduces the business’s reliance on increasingly expensive carbon credits. Clients of Air Products also benefit from this VPPA, with the decarbonisation of their supply chain, an increasingly important issue being raised by businesses globally.

Unlike a PPA, with a VPPA, as the name suggests, there is no physical exchange of electricity. Scieki onshore wind farm generates electricity which is distributed into the Polish grid. Air Products receives a Guarantee of Origin certificate showing the time and place of creation of the renewable power they are using virtually linking it back to the onshore wind farm.

Schneider Electric acted as a full-service buyers advisor and assisted Air Products in project selection and negotiations.

With these two additional PPAs, we have structured and signed four PPAs in Poland over the past 18 months.

"Poland is becoming an increasingly important market for Green Investment Group. Last year, the country announced plans to set even higher targets to reduce its dependence on conventional energy generation by 2040, and we're seeing corporates in Poland similarly set decarbonisation goals. I believe we can play a role in accelerating this green transition."  

Edward Northam
Head of GIG Europe

Impact

Danone is part of RE100 — a collection of the companies that have committed to using 100% renewable electricity. Danone has committed to reach 100% renewable electricity for business operations by 2030.  At the end of 2020, Danone exceeded its previous target of 50% by 2020, getting 54.3% of its electricity from renewable sources.

The PPA with Jozwin wind farm will deliver c.44 GWh of renewable energy annually to Danone’s Polish operations, helping avoid 42kt CO2e in greenhouse gas emissions every year.

Scieki onshore wind farm consists of 11 Vestas V90 2 MW wind turbines and helps avoid 39 kt CO2e in greenhouse gas emissions on average every year. The wind farm's output will support Air Products in achieving their emissions reduction goal.

The wind farm received a GIG Carbon Score rating of 39 AAA, a measure of a project’s lifecycle greenhouse gas emissions compared to the emissions of the baseline that it displaces.

Footnotes

1. EC quarterly report on European electricity markets, Q2 2019; fig 36.
2. IHSMarkit, European Power Country-Level Balances and Generation Capacity: Monthly, Quarterly, and Annual Historical Data; Poland. 2 Aug 2019
3. https://www.gov.pl/web/energia/draft-energy-policy-of-poland-until-2040
4. IHM Markits


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