Northland Power and PKN Orlen have won an initial Contract for Difference (CfD) for the 1200MW Baltic Power offshore wind farm off Poland.
Under the 25-year CfD, awarded by Poland’s Energy Regulatory Office, the project will receive payments covering any negative balance of electricity generated offshore and fed into the grid.
It means that Baltic Power will be compensated for the potential difference between the market price of electricity and the strike price set in the CfD.
The award is part of the Polish government’s commitment, through the Polish Offshore Wind Act, to support an initial phase of 5.9GW of offshore wind.
In March 2021, Northland completed its acquisition of a 49% interest in Baltic Power from PKN Orlen.
The project’s construction activities are expected to start in 2023 and commercial operations are anticipated in 2026.
“We are extremely proud to be developing a significant offshore wind project in Poland, alongside our partner, PKN Orlen to support the country in its decarbonisation objectives,” said Mike Crawley, president and chief executive officer of Northland.
“The CfD is a key milestone that provides the project with revenue certainty to proceed with development and confirms our inclusion in the initial phase of offshore wind development in Poland.
“Full-scale development of Baltic Power will expand our European offshore wind presence and help us to establish an offshore wind hub in the Baltic Sea.”
The initial CfD is awarded at PLN319.60 (€70.01) per megawatt hour for up to 25 years and is adjusted to annual indexation by Poland’s annual average consumer price index, the same of previous CfD announcements in Poland.
The CfD is subject to review and final approval from Polish authorities and the European Commission.