ORLEN embarks on construction of Central Europe’s largest green energy project
Published by Jessica Casey,
Editor
Energy Global,
The ORLEN Group has reached the final investment decision (FID) to build Baltic Power, Poland’s first offshore wind farm. The project, set to bolster Poland’s energy system through the addition of nearly 1.2 GW in 2026, will be pursued in partnership with Canada’s Northland Power. Baltic Power will deliver sustainable, accessible energy to an estimated 1.5 million households. The FID means that with all the requisite construction permits in place, all key components contracted and financing secured, the project is primed for execution. Moreover, as part of its ongoing efforts to facilitate offshore industry development, the Group has initiated the construction of an installation terminal in Swinoujscie.
“We stand at a pivotal point, both for the ORLEN Group and the broader energy sec-tor in Poland. Our commitment has led us to embark on the most significant project to develop renewable energy in our country and the entire region. Notably, the Baltic Power offshore wind farm represents one of just two such projects in Europe to progress to the implementation phase over the past three years. Despite the formidable challenges posed by the pandemic, supply chain disruptions, and military conflict across our eastern border, we have adhered to the ambitious timeline we set from the outset. Within three years, we will launch the first offshore wind farm in Poland, but our aspiration is to use our experience and newly established infrastructure to implement further projects. A case in point is the ongoing construction of an installation terminal for offshore wind farms in Swinoujscie, which will serve not only the Baltic Power project but will also facilitate the pipeline of five more wind farms slated by the ORLEN Group, with a combined capacity of 5.2 GW,” saud Daniel Obajtek, ORLEN’s CEO and President of the Management Board.
The Baltic Power farm will generate 4000 GWh of electricity, equivalent to approximately 3% of Poland’s current electricity output, helping to avoid an estimated 2.8 million tpy of carbon emissions. The foundation laying is scheduled to commence in 2024, with the farm expected to comprise 76 Vestas wind turbines with a unit capacity of 15 MW, standing at a height of over 250 m, by 2025. An onshore substation project is al-ready under way, designed to evacuate the power generated at sea. Baltic Power has inked agreements with key contractors and suppliers to secure a supply chain spanning the manufacture, transport and installation of all critical farm components. Notably, these partners include globally renowned experts in offshore wind, with a substantial local content.
The overall project budget is estimated at approximately €4.73 billion, encompassing capital expenditures, including insurance (totalling approximately €4.05 billion), as well as financing costs and an additional reserve. The project will be financed under the Project Finance framework – in September, Baltic Power's shareholders signed loan agreements for a total of about €4.4 billion with 25 Polish and international financial institutions. This is the largest financing obtained for a single investment in Poland's history and one of the largest transactions of its kind in the offshore area in Europe. The conditions under which the loan agreements were concluded testify to the very strong business foundations of the Baltic Power project.
“As Northland, in collaboration with our partner ORLEN, we are delighted to commence the construction phase of the Baltic Power project. Upon completion, the wind farm will supply clean energy to over 1.5 million households, marking a substantial stride towards bolstering Poland’s energy transition goals. We look forward to achieving further construction milestones in the coming months,” stressed Mike Crawley, President and CEO of Northland Power.
In preparation for the project, extensive groundwork was laid, including wind measurements, environmental assessments and geotechnical investigations, informing the de-sign work that followed. Over the course of a 5.5-year project preparation period, the Baltic Power team successfully secured seven construction permits, requiring a total of over 150 administrative approvals, obtained from an array of 40 different institutions.
Furthermore, as part of its strategic commitment to advancing the offshore industry, the ORLEN Group is embarking on the construction of Poland's first offshore wind farm installation terminal. Executed by ORLEN Neptun and situated at the Port of Swinoujscie, the terminal is slated for completion in 2025 and is set to be among Europe’s most advanced facilities of its kind. With its wharves and storage yards, it will be capable of handling and installing state-of-the-art 15 MW or larger wind turbines. Initially catering to the Baltic Power project, it will subsequently support the implementation of projects by other developers and facilitate the ORLEN Group’s future ventures in the Baltic Sea. Thanks to its location, the Swinoujscie port will serve not only Polish projects but also ventures undertaken in German, Swedish, or Danish waters.
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Read the article online at: https://www.energyglobal.com/wind/12102023/orlen-embarks-on-construction-of-central-europes-largest-green-energy-project/
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