On October 3, 2024, the European Commission approved a state aid program worth €1.2 billion aimed at boosting the installation of at least 5.4 GWh of Battery Energy Storage Systems (BESS) in Poland.

This initiative, presented under the European Union’s Temporary Crisis and Transition Framework (TCTF), aims to reduce the country’s reliance on fossil fuels and facilitate the integration of variable renewable energy into its national grid.

The Polish program focuses on energy storage projects with a minimum capacity of 4 MWh, which will be connected to distribution or transmission networks at all voltage levels. The projects will be selected through a tendering process, ensuring that the most competitive ones receive the necessary funding.

Financial support will be provided in two cumulative forms: direct grants and loans, with a maximum limit of 45% of the total project investment cost. Small businesses may receive up to 65% support, while medium-sized businesses may receive up to 55%. This flexible financing approach aims to encourage the participation of small and medium-sized enterprises (SMEs).

Impact for Poland and the EU

Poland’s energy storage program marks a milestone in its energy transition and positions the country as a model for other EU members. With the rapid growth of renewable energy, grid stability and storage capacity are critical elements. The Polish strategy will help mitigate fluctuations in electricity supply, making it easier to integrate large volumes of renewable energy into the system.

At the European level, the TCTF ensures that all member states have access to the necessary financing and technical assistance to support their energy transitions. This initiative reduces dependence on imported fossil fuels and fosters innovation in emerging sectors such as battery storage, heat pumps, and hydrogen technologies.

In the commercial and industrial energy storage market, this measure creates new opportunities. Companies will be able to take advantage of a more stable energy supply and reduced costs, with energy storage systems playing a crucial role in improving competitiveness.

The Crisis and Transition Framework

The TCTF was adopted by the European Commission on March 9, 2023, as part of the Green Deal Industrial Plan, aimed at promoting green investments in key sectors of EU member states. The framework will be in effect until December 31, 2025, allowing various forms of support to accelerate the transition to a carbon-neutral economy.

The main areas covered by the TCTF include primarily the promotion of renewable energy, where member states can design renewable investment plans and streamline tendering processes to accelerate implementation.

It also includes industrial decarbonization. Electrification of industrial processes and improvements in energy efficiency are encouraged, with special emphasis on renewable energy and hydrogen. A prominent example is the LOTOS Green H2 project, which will receive €158 million for renewable hydrogen production, enabling partial decarbonization of refinery activities.

As Margrethe Vestager, Executive Vice President responsible for competition policy, explained: “This €158 million measure allows Poland to support LOTOS Green H2 in the deployment of renewable hydrogen production and contributes to greening a very energy-intensive sector, in line with our commitment to transition to a net-zero economy. At the same time, it ensures that any potential competition distortion is kept to a minimum.”

Finally, investments in a carbon-neutral economy are encouraged by supporting the manufacturing of strategic equipment such as batteries, solar panels, and wind turbines, boosting green industrial processes.

Growth of Energy Storage Capacity in Poland

Poland is experiencing rapid growth in its energy storage capacity. According to data from distribution system operators (DSOs) and transmission system operators (TSOs), the installed energy storage capacity in the country has reached 1,464.5 MW. Of this figure, a remarkable 85% corresponds to pumped storage hydroelectric plants.

Although this capacity primarily reflects the energy storage registered by the five largest operators, the total capacity is expected to be even higher, as many smaller operators have not yet submitted their registrations.

Additionally, battery technology is gaining ground, accounting for half of the 12 energy storage systems registered in Poland. In particular, lithium-ion battery-based systems have been crucial in diversifying storage technologies, contributing to greater flexibility and efficiency in grid management.

Projections and Contracts

The future of Poland’s BESS market is considered promising. The capacity market has contracted 9.5 GW of storage for the 2021-2028 period, which includes 7.1 GW of existing units, mostly pumped storage hydroelectric plants, 0.5 GW of modernized units, and 1.9 GW of new units, most of which will be battery-based electrochemical storage systems.

Poland’s Energy Policy towards 2040

Poland has outlined its “Energy Policy until 2040” (PEP2040), which addresses the necessary changes in its energy mix and the growing demands for a sustainable transition.

The implementation of this plan is based on three key pillars: a fair transformation for the regions most affected by decarbonization, a zero-emissions energy system, and improved air quality. According to the National Energy and Climate Plan (NECP) 2021-2030, Poland is committed to reducing its emissions and modernizing its economy by leveraging both renewable energy and nuclear and natural gas energy during the transition.

Despite the challenge of transforming its highly coal-dependent energy mix, Poland anticipates significant growth in renewable generation capacity. By 2030, the installed renewable energy capacity is expected to reach between 23 and 25 GW, doubling 2020 levels. Offshore wind energy will play a key role, with projections of 5.9 GW by 2030 and 11 GW by 2040.