Energy storage developer Pacific Green has agreed to acquire two large-scale in-development battery energy storage system (BESS) projects in Poland, Europe.
The acquisition of two 50MW projects totalling 400MWh of capacity marks the developer’s first entry into Poland, which is fast becoming a key market for energy storage in the Central and Eastern Europe region.
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Pacific Green has set itself a target of delivering 1GWh of projects in the Polish market, among a global goal of 12GWh across four global markets. The company is incorporated in Delaware, US, with its head offices in London. It recently signed a 1,500MWh BESS supply deal with Trina Storage, the energy storage arm of global solar PV company Trina Solar, and is developing projects in regions including, the UK, Italy where it bought a 500MW six-project portfolio in late 2023, and Australia where it has secured land deals including one for a site in Victoria which could host up to 1GW/2.5GWh of energy storage assets.
Majority stakes in the two projects will be acquired from an undisclosed “international developer present in the Polish market,” with the balance of ownership transferring to Pacific Green on the attainment of certain milestones.
One project is located in the region of Warsaw, the nation’s capital city, and the other in the Polish South West, with grid applications lodged for both.
Pacific Green said they are anticipated to take part in the Q4 Polish Capacity Market Auction and could reach ready-to-build status in the final quarter of this year, if successful in the solicitation.
The capacity market is expected to underpin major growth in the Polish energy storage sector. In a sponsored article for Energy-Storage.news published in December 2023, analysts from research firm LCP Delta noted that Poland “looks set to lead battery storage deployments in Eastern Europe.”
LCP Delta’s Silvestros Vlachopoulos and Jon Ferris wrote that 9GW of BESS projects had been offered grid connections by transmission system operator (TSO) PSE, while 16GW of projects had been registered for the then-ongoing round of capacity market auctions by that point.
This was despite the country only having around 10MW of battery storage connected to the grid by the end of last year.
Major reform to balancing markets had encouraged greater participation in the capacity market, and the first such auction held in 2022 had seen contracts awarded to four BESS projects totalling 150MW.
Government-owned power producer PGE tenders for 263MW/900MWh project at PHES plant
State-owned PGE Group, which is Poland’s largest power producer by sales revenue and net profit, said earlier this month that it will open a tender for contractors to work on the country’s biggest planned BESS project to date.
PGE said 6 June that it was preparing to launch a procurement process for turnkey design and construction of a large-scale BESS facility of 263MW output and at least 900MWh storage capacity.
The plant will be located in Żarnowiec, a village in northern Poland and will be built close to ESP Żarnowiec a pumped hydro energy storage (PHES) facility in PGE Group’s portfolio.
The solicitation will be carried out as an open tender in line with Polish Public Procurement Law, and the company is planning to formally initiate it in the next few days. Conditions for eligibility and entry already published along with other information in the official journal of the European Union (EU), as well as on the PGE group purchasing website.
PGE Group board president Dariusz Marzec said the company is accelerating its investments in battery storage due to the increase in the share of renewable energy on the grid.
The Żarnowiec BESS will provide grid services to the TSO and help balance the output of wind farms both onshore and offshore in the nearby Baltic Sea that PGE wants to build. A grid connection agreement is in place as well as concessionary agreements—thought to be a first for the Polish market—and an application made for capacity market qualification.
PGE said it would apply for funding from the post-pandemic National Recovery and Resilience Fund (KPO), which is worth about €60 billion (US$64 billion) in total including just over €25 billion in EU funding and about €35 billion of concessional loans. Conditions for receiving that funding make it essential that the tendered-for project goes online on schedule, the company said.
Although the capacity market is seen as a major new source of long-term revenue certainty for BESS in Poland, a warning was sounded recently that proposed 57% de-rating factors could dampen the market’s progress (Premium access).
Energy-Storage.news’ publisher Solar Media will host the 2nd annual Energy Storage Summit Central Eastern Europe on 24-25 September 2024 in Warsaw, Poland. This event will bring together the region’s leading investors, policymakers, developers, utilities, energy buyers and service providers all in one place, as the region readies itself for storage to take off. Visit the official site for more info.
