The transformations of the energy industry have triggered the process of setting up new industrial centres located around renewable energy sources. Therefore, not only the sales market, accessibility of transportation and access to qualified staff are important – what matters most is availability of renewable energy sources free of CO₂ emission fees and transmission fees, which will ensure energy prices that allow you to compete with other producers.

The establishment of industrial facilities in the immediate vicinity of the sea and renewable energy sources has already begun around the world.

Sweden has adopted a programme to decarbonize industrial production and is becoming one of the leaders in making the production of steel, aluminium and battery chemicals green.

At its plant in Boden in northern Sweden, the start-up H2 Green Steel will produce green steel starting in 2025, reducing CO₂ emissions by 95% compared to traditional production. Production and achievement of the intended indicators will be possible thanks to the Norrbotten region – rich in non-fossil energy sources, high-quality iron ore and a large port in Luleå. The company’s goal is to build the world’s first green steelworks. By 2030, H2 Green Steel will produce 5 million tons of green steel. Leading European companies (including BMW and Mercedes) have already signed contracts for the supply of initial volumes from Boden even before the plant has been put into operation. In recent days, H2 Green Steel closed a subsequent financial round from private funds in the amount of EUR 1.5 billion. Another interesting project has been announced by the Norwegian company Blastr Green Steel, which will build a new green steel plant in Inkoo in southern Finland using Scandinavian renewable energy resources. Starting from 2026, the company is planning to produce 2.5 million tons of steel per year – highest quality products requiring sophisticated, digital production processes for segments such as automotive and construction, with ambitious plans to reduce CO₂ emissions. Blastr Green Steel is backed by the owners of Vanir Green Industries, a Nordic investment company which develops green enterprises necessary to accelerate the energy transition.

Green and competitive price

Industrial investors in Poland are also observing the latest mega trends. New production capacities in steel, aluminium, copper or batteries are capital-intensive investments that, in the light of today’s EU regulations, require deeper insight into the energy cost structure and the extent to which production is green. Today, the price and colour of energy determine the effective sale of products on the markets of Western Europe.

Apart from industrial customers there is no logical justification to develop renewable energy in Poland,. If we want to be competitive, the price must fall below PLN 450/MWh by 2026, and this is only possible if we eliminate the CO₂ fee. What assumptions may be made today for 2024 or 2025? A question with a large margin of error. And this margin of error determines the choice of a new location.

In futures contracts, energy is valued at PLN 630 (2024) and as much as PLN 695 (2025). These prices are over 30% higher compared to the market environment and market expectations.

The construction of wind farms in the Baltic Sea and planned nuclear units in northern Poland meaning access to cheap green energy, foster reflection on the location of new green industrial zones in northern Poland.

This is where the project of setting up special energy zones to be located in northern Poland, comes into play. An investor who builds an industrial plant in such a zone will be able to count on a reduction in the quality fee and variable network fee, thanks to which their electricity bills will be lower than outside the energy zone. In some locations, investors will also be able to connect to the Gaz-System gas network. The initial location of special zones is around Słupsk, Suwałki, Ostaszew (two zones near Toruń), Szubin (near Bydgoszcz) and Olsztyn. The zones will be intended for large electricity consumers with annual consumption exceeding 100 GWh and those planning to build energy storage facilities. The location of large electricity consumers close to the places where it is produced, combined with the construction of energy storage facilities, will improve the efficiency of the use of transmission infrastructure and reduce the need for network investment.

The industry calls for the establishment of such zones and their special treatment. However, reducing the transmission fee or capacity fee is definitely not enough. The new system must be based on access to zero-emission electricity, without CO₂ fees. The primary goal must be to drop below PLN 450/MWh. Only then will green industrial production enter the path of dynamic development, making it possible to build production centres wherever access to renewable energy generation is ensured, especially from wind and hydrogen, and in the future from nuclear power plants.

Mikołaj Budzanowski

Boryszew Green Energy & Gas

Member of the Board, Grupa Boryszew S.A.