On 27 November 2024, a small, yet significant amendment to the Act on promoting offshore wind farms electricity generation (“Offshore Act”) was adopted by the Polish Parliament (“Amendment”). This Amendment changes one provision of the Offshore Act being the basis for issuing the regulation on maximum auctioning prices of electricity generated by offshore wind farms and introduced to the grid (“Maximum Price”) which is applicable to the so-called 2nd phase of offshore support system (CfD).

While the use of such regulation to determine the auctioning maximum prices generated from RES is a well-established and non-controversial procedure in Polish law, this Amendment – apart from several technical changes – allows the Minister of Climate to differentiate the Maximum Prices within the same category of electricity producers (offshore wind farms). The key to such differentiation is the location of an offshore wind farm and its distance from the shore.

Under the Amendment, the Maximum Price can be determined by the Minister of Climate (by way of a separate regulation) at a different level for particular areas, groups of areas or groups of areas indicated in attachments 1 and 2 to the Offshore Act. It means that the Minister of Climate has been given a tool to discretionally divide the Polish offshore area (considering the currently existing offshore-wind farm division of the Baltic Sea) to differentiate the support level within the offshore auctioning system.

According to the justification to the Amendment, the distance from the shore, as well as geophysical characteristics of a given location have significant impact on both the CAPEX and OPEX of the offshore wind projects.

Such differentiation as proposed in the discussed Amendment is aimed at both (i) avoiding the risk of overcompensation for projects located nearer the shore (i.e., projects with generally lower costs); and (ii) facilitating the participation in the auctioning system for projects located in more distant areas (i.e., with generally higher costs).

For both these categories of projects setting a unified maximum price would be potentially unjust. By applying this solution, the lawmaker tries to (i) avoid overcompensation on the one hand; and (ii) ensure that the minimum requirement of submitting at least 3 bids for the auction to be valid will be met on the other hand. While the first case is rather self-explanatory, the latter is aimed at addressing the potential problem of more remote projects which could struggle with participating in the auctioning system due to higher cost. Adopting the same approach for all offshore projects – in the lawmaker’s view – would effectively eliminate such more remote projects from the support system.

At the same time, a draft of the abovementioned regulation (already including the differentiation tool discussed in the Amendment) is currently being processed at the Ministry of Climate.

As follows from the latest iteration thereof (dated 5 December 2024), the maximum price for electricity generated in an offshore wind farm and introduced to the grid is: (i) 479,10 PLN/MWh for areas nearer the shore (60 km from the shore/75 km of power output devices length, power utilization factor: 44,7 percent) and (ii) 512,32 PLN/MWh for more distant areas (90 km from the shore/110 km of power output devices length, power utilization factor: 43,7 percent). The draft regulation justification includes an exhaustive reasoning aimed at explaining the adopted maximum prices model.

The act introducing the Amendment in question was signed by the President on 10 December 2024 and will enter into force the day after being published. The draft regulation introducing maximum prices, which is still being discussed at the governmental level, will enter into force the day after being published. Both these pieces of legislation should obviously be considered together.