$300m Investment Signals Start of Green Economy
Private entrepreneurs bring environmentally friendly technology to Poland's energy sector, partly thanks to EU regulations
By Kamil Tchorek
Once one of the most polluted countries in Europe, Poland may experience a rush of renewable energy investment over the next five years as it attempts to comply with EU targets. Cannon Power Corporation has announced its plan to invest $300 million in its first round of wind farm construction in Poland.
Wind power currently provides Poland with 0.01% of its electricity. Current regulations from the Ministry of Economy demand that power utilities and energy turnover companies purchase 2.5% of their energy from any renewable energy source, including hydroelectricity and bio-gas plants. This figure is set to rise to 7.5% by 2010 and 14% by 2020, which falls slightly short of EU directive objectives.
Founded in California in 1979, Canon Power Corporation was part of the first generation of wind power pioneers to export their expertise to Europe. Michael J. Toke, who has been scouting the country in the lead-up to the investment plan, says: "Poland has great wind potential."
According to the project-service enterprise Elektronika Pomiary Automatyka (EPA), 75 percent of Poland's land area has "favorable conditions for wind farms", which varies considerably from our energy-hungry German neighbors. As Michael Toke continues, "Poland has enormous untapped potential, with many sites as good as anywhere in the world. But there were a few things stalling us at the beginning."
It has taken three years of presence in Poland before the firm felt that it was the right time for the investment, both in terms of local interest as well as project feasibility. Originally, it was difficult for CPC to secure long-term contracts with a new product.
CPC's Managing Director, Garry Hardke, explains his firm's successful philosophy. "We try very hard to become a part of the local community, by hiring and training local personnel, using local suppliers, etc. Our experience is that the local communities in which we've done business quickly become enthusiastic supporters of wind power since so many of the benefits - such as jobs and inward investment - are realized at a local level."
The purchase obligation imposed by the Polish government is supported by a financing mechanism designed for renewable energy sources. Up to 60 percent of total project costs can be funded by either of two national funds for supporting green energy. Investors can also raise capital from EU environmental funds.
In another ecologically-friendly energy project, Caterpillar Power Ventures (Europe) has started construction of a $42 million power and heating plant in the Starachowice Special Economic Zone (SEZ). Its "clean technology" has attracted foreign investors and will help Poland to fulfill its renewable energy goals.
