Renewables Still Relatively Attractive Despite Headwinds
Despite our anticipation of a slowdown in Poland's renewables industry and our subsequent downward revision of 2013 and longer-term non-hydro renewables capacity forecasts, the Polish renewables market is still proving to be a relatively attractive avenue for investment, particularly when compared to Western Europe and Central and Eastern Europe. This was evidenced by EDP Renewables ' recent commissioning of an 80MW wind farm in the country. That said, we do expect growth to slow, as the precarious regulatory environment and difficulties securing project financing are likely to take a toll on the project pipeline.
We have long highlighted that the Polish renewables industry is heading for a slowdown and repeatedly questioned the long-term sustainability of the high levels of growth witnessed over the last five years (see 'Mixed Messages in the Wind Sector', April 15). This viewpoint is primarily underpinned by the uncertain regulatory environment surrounding the sector and the repeated alterations and re-releases of the long-awaited renewables draft law by the Polish government. As such, we downwardly revised our growth forecasts for renewables capacity across our 10-year forecast period in July, to reflect the challenging market conditions and slowing project pipeline (see, 'Revised Forecast As Slowdown Takes Hold', July 15).
However, we note that it is not all doom and gloom for the renewables industry, as relatively speaking, Poland remains an attractive avenue for investment when compared to the saturated eurozone and its neighbouring countries in the CEE. This has been recently evidenced with the news that Spanish-based EDP Renewables brought online the 80MW Paw?owo wind farm in the Wielkopolska region of Poland in early September. The project is the company's third wind farm in the country, and Poland is one of 11 markets the company operates in, including the troubled and rather subdued Italian, Portuguese and Spanish renewables sectors. When examining the growth prospects of both CEE and Western Europe it becomes evident that, despite higher total installed capacity in Western Europe, the CEE region is projected to undergo the more pronounced renewables expansion.
|CEE Renewables Expansion Underway|
|Total Non-Hydro Renewables Capacity, By Region (MW)|
In fact, even when compared to the rest of the CEE region, Poland comes out top - as illustrated by our Renewables Risk/Reward Ratings for the region.
|Poland Outperforming Regionally|
|Poland Renewable Risk/Reward Ratings (Score Out Of 100) and Wind Capacity and Generation|
Poland's rating, for both Risks and Rewards, outperform the regional average; thus highlighting the country's well-placed position to attract investment into its renewables industry, notably the wind segment.