Poland's offshore auction is seen as a key test for Europe following failed tenders

Poland will launch its first competitive offshore auction on Wednesday. Experts say that this test could help revive Europe's struggling wind sector, as developers compete for long-term contracts following a string of failed tenders in the region.

The auction is offering developers 25-year contracts at fixed prices between $135 and $143, a significant difference from recent European auctions, where low price caps or lack of infrastructure funding have deterred bidders.

Analysts believe that Poland's approach can be used as a model for restoring confidence in offshore wind investments after President Donald Trump's opposition to renewables effectively frozen the U.S.

Anastasia Gurnell is an Associate Director with German lender NORD/LB. She said that if Poland's?auction succeeds, "offshore winds are not in a bad position."

Signe Tellier Christensen of Aegir Insights stated that Poland's support auctions provide "long-term" visibility for investments in offshore and its supply chain. This alleviates the uncertainty?that plagues other European auctions.

The Polish utility PGE and refiner Orlen, as well as a consortium?of Polenergia & Equinor will be bidding for up to 4 gigawatts.

To ensure competition, the rules require a minimum of three bidders. The winners are limited to 90% of their invited capacity. Poland intends to hold similar auctions twice a year until 2031.

Offshore wind is crucial for Poland to?bridge its looming gap in energy, as coal power is being phased out and nuclear energy will be available several years from now. The proximity of Russia also increases the importance placed on energy independence.

(source: Reuters)