Poland looks set to be an energy storage leader

Poland, Europe’s tenth-largest economy, is set to become a hotbed of energy storage project development as the share of renewable energy on its grid soars. The country built out a record 1.2 GW of onshore wind power in 2023, according to industry body WindEurope, bringing its total installed capacity to around 9.4 GW. 

That is enough to supply 13% of the nation’s electricity, a higher level than in France, Turkey or Norway. And the country is just getting started, WindEurope says. 

“In 2023 the general election finally brought an end to the ruling Law and Justice Government, who had been opposed to onshore wind developments,” says the Brussels-based industry group in its 2024 outlook report. 

“They were also responsible for the infamous 10H rule—forbidding the construction of wind turbines at a distance from buildings equal to at least 10 times their tip height. This rule [has] blocked onshore wind development in 98% of Polish territory since 2016.”

With a new, pro-wind government in place, WindEurope has upped its 2023 to 2027 forecast for Polish wind installations from 4.2 GW to 5.3 GW—and expects there to be more than 8 GW of onshore capacity by 2030. 

Meanwhile, WindEurope says: “Offshore wind in Poland is set to take off in earnest from 2025 when the projects awarded in the first auction in 2021 could start coming online. In total we expect 5.2 GW to be connected by 2030, coming up just short of the 2030 offshore target of 5.9 GW.”

Poland is also installing record levels of photovoltaic capacity as well, with wind and solar for the first time generating over a fifth (21%) of the country’s electricity in 2023, up from 16% in 2022, based on figures from consultancy Ember. 

Adding other clean energy sources, such as hydro, “The share of renewables reached 27% in 2023 (up from 21% in 2022), not far from the still-official goal of 32% by 2030 (40% of that coming from yet-to-be deployed offshore wind),” Ember said.

The challenge for renewable energy developers will be to obtain grid connections for all that capacity. Poland’s grid modernization efforts are guided by an out-of-date National Energy and Climate Plan and an under-ambitious energy strategy to 2040.

Ember says these plans fail to account for recent and forecast growth in renewables, resulting in lack of grid investment and growing connection queues for wind and solar projects. 

Massive capacity increases

While battery storage schemes also require grid connections, they can be an effective means of overcoming short-term constraints on the electricity network—and they are set to boom in Poland. 

A capacity auction in December 2023 saw 16 GW of storage capacity being registered, on top of 9 GW that already had grid connection offers, according to LCPDelta research published in Energy Storage News.

That is a massive increase from the 197 MW of capacity, spread across 99 projects, that LCPDelta’s STOREtrack database lists for 2024. All these existing projects are front-of-meter schemes and 95 use lithium-ion battery technology. 

Go back a year, to 2023, and Poland had little more than 10 MW of operational battery capacity, according to LCPDelta’s storage research manager Silvestros Vlachopoulos and head of storage and flexibility research Jon Ferris.

“Poland has made significant progress this year,” they said in December, “with the announcement of major reform to the balancing markets encouraging greater participation of battery storage in the capacity market. Last year’s auction awarded contracts to four storage projects with around 150 MW of capacity.”

Poland’s December capacity market auction, for assets entering service in 2028, saw 7 GW across 111 Polish projects and 48 schemes from neighboring countries achieving a closing price of PLN 244.90/kW (US$61.73) per year, with contracts lasting from one to 17 years. 

Of this, around 1.7 GW of capacity was from energy storage, distributed across 30 or so projects, and 1.2 GW went to a single developer, Greenvolt. The level of energy storage interest registered during the auction was vastly greater than a year previously, when batteries made their first appearance in the contest. 

Forum Energii lists the auction result as having 165 MW of battery capacity, across five schemes. 

Projects that had already got grid connection agreements as of December 2023 included nine schemes co-located with solar, pointing to a trend that is likely to continue as Poland’s renewables build-out continues alongside underinvestment in the grid. 

“Poland’s renewable energy market continues to grow dynamically,” says Krzysztof Cichocki of Warsaw law firm Sołtysiński Kawecki & Szlęzak. 

“The scale of this growth is such that the main problem facing investors in the development process is the shortage of interconnection capacity (grid congestion) and, as a result, difficulties in connecting renewable energy installations to the grid.” 

Grid-scale energy storage is seen as a possible solution to this problem, as well as helping balance the grid, Cichocki says. 

“It could be argued that without energy storage, further development of the renewable energy systems (RES) market in Poland, while maintaining grid stability, will be difficult, especially given the obligation to meet increasing EU targets for the share of RES energy in the national energy mix,” he adds.

Good outlook for developers

Developers wanting to take advantage of the market will need to apply for a grid connection with the distribution or transmission system operator, depending on the size of the project, Cichocki says. For this, they will also need to have a zoning decision relating to the energy storage site. 

The developer will also need to pay a grid connection fee worth 50% of connection-related construction costs. “Currently, the revenues generated by an energy storage facility can be derived from three main sources: capacity market, ancillary services or price arbitrage,” says Cichocki.

This list is not exhaustive, of course, since projects co-located with renewable energy plants could improve production by storing excess power when grid demand is low and then exporting it later. 

Two other things for storage developers to be aware of in Poland are the evolution of the generation mix and changes to the electricity market. On generation, Poland is planning to increase its nuclear power capacity as coal drops out of the mix. 

In time, this could add firm capacity that lessens the need for storage—although nuclear power’s recent track record of budget and schedule overruns means this capacity is unlikely to be a major worry for some time to come. 

The other consideration is whether Poland’s power market, which currently acts as a single entity, moves to zonal pricing. If this happens, detailed knowledge of the country’s electricity network will be helpful to maximize the potential of pricing differences between zones. 

Whatever happens, it seems the short-term outlook for storage in Poland is good—and will only get better as the country moves to address European and national climate goals.