Wind Energy Market in Poland in the Background of the Baltic Sea Bordering Countries in the Era of the COVID-19 Pandemic

Abstract

The economic crisis caused by the COVID-19 pandemic reinforces the problem of rising electricity prices, which mainly affects countries that are forced to pay ever-higher CO₂ emission allowance fees (e.g., Poland). In the light of signals confirming the need for intensive development of the wind energy market in the Baltic Sea region, the authors consider the need to examine this issue concerning Poland and the Baltic States (i.e., Lithuania, Latvia and Estonia) as extremely important and demanding. The development of the RES market is currently an absolute necessity. The immediate neighbourhood and similar general social and economic conditions of Poland and the Baltic States enable factual comparisons, reinforcing the rationale for choosing the adopted research area. The main objective of the study was to assess the development of the wind energy market in Poland in the background of the Baltic Sea bordering countries in the era of the COVID-19 pandemic, in order to try to answer the question: what direction of wind energy development in Poland in the realities of the COVID-19 pandemic is justified and may have an impact on limiting the increase in electricity prices in this country? In this context, it turned out to be particularly interesting to identify solutions practised in the wind energy market in the Baltic States with their potential to be applied in Poland. The research instruments were drawn from an economic analysis and evaluation of phenomena and supported by the results of our own research (questionnaire) conducted on the Polish energy market, to substantiate the findings.

1. Introduction

Rising prices characterise today’s economic reality. Households, industry and services are being charged more for their utility consumption, in particular electricity and gas bills. The socio-economic situation has further been complicated by the coronavirus pandemic, reinforcing the burden on state budgets to fight the spread of the virus and the wide-ranging adverse effects of its effects. In addition, the unclear political situation in Eastern Europe increases the uncertainty as to the future of the energy market in this region, which is primarily powered by fossil fuels imported from the East—in the case of Poland [1], mainly hard coal from Russia, with a very significant scale of imports, exceeding the average annual amount of 8 million tonnes.

It must be emphasised that all fossil fuels are becoming scarce, thus their price on global exchanges is constantly increasing, entailing an increase in production costs [2] and, consequently, an increase in the sale price of electricity on the market. The scarcity of fossil raw material deposits, especially high-calorific ones, does not ensure energy security in the long term. Their processing generates pollution, mainly responsible for increasing climate changes [3], with irreversible consequences. The above motivates the world to tighten environmental policy in the area of energy production, increasing CO₂ emission allowance fees, entailing a drastic increase in the cost of energy production, which has affected Poland in particular recently, amplifying the crisis caused by the COVID-19 coronavirus pandemic through a significant increase in electricity prices. The above (leading) justifies and motivates the exploration of renewable energy issues, outlining the prospects of obtaining cheap, ecological electricity.

The renewable energy market is the most appropriate direction for developing the energy market. Energy obtained from wind or solar radiation, geothermal energy or energy obtained from currents, waves, tides, falling rivers or from biomass [4] is the most nature-friendly (climate-saving [5]) and necessary [6] formula for equipping the modern world with electric energy. As a rule, obtaining energy this way is free of the emission of harmful substances, including greenhouse gases [7]. The above is an important motivation for obtaining energy from alternative sources [8], creating a significant trend observed in the world. However, this development is important in various countries [9], including North-Eastern Europe. Different countries in this region implement solutions related to obtaining “green energy” to a different extent. There may be many reasons for this, including:

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Environmental and geographic conditions that give rise to or limit the applicability of a particular solution;

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The level of the greening of life and public education on the options available for obtaining energy and reducing the cost of its acquisition;

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The degree of motivation to undertake activities oriented towards acquiring energy from renewable sources, associated with clear and simple procedures for the construction of energy acquisition installations (the dimension of formal and legal regulations), together with financial support for their implementation and maintenance (subsidies, grants, tax exemptions, tax reliefs);

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Other.

The differences observed against this background are strongly marked globally, including in the Baltic region. The presented context highlights the need to recognise the current energy market situation in Poland and the Baltic States, as its stability determines the reality of the functioning of social and economic entities [10,11] in this region. Hence, the overall objective of the paper is to explore the progress of Poland and the Baltic States in implementing solutions oriented at obtaining energy from renewable sources. The immediate vicinity and similar geographical and environmental conditions of the countries adopted for the analysis ensure their comparability, potentially drawing on the results of the findings. The above justifies the outlined research context.

The main objective of the study was to assess the development of the wind energy market in Poland in the background of the Baltic Sea bordering countries in the era of the COVID-19 pandemic, in order to try to answer the question: what direction of wind energy development in Poland in the realities of the COVID-19 pandemic is justified and may have an impact on limiting the increase in electricity prices in this country? To this end, it is necessary to diagnose the current energy market situation in the Baltic Sea basin countries, with particular emphasis on wind energy as a potential for development of the “green energy” market. At the same time, an interesting thread of research is whether Poland—a country with a low level of drawing on RES solutions in the set of analysed countries—develops the wind energy dimension as strongly as solar energy [12] and what the prospects of its development in future periods are.

On a detailed level, the paper diagnoses the state of the electricity market in Poland and the Baltic States in the current economic conditions (including the impact of the COVID-19 pandemic on this market), outlines the essence of the wind energy process and exposes the economic conditions of this process.

However, the main research objective of this study is to try to find out what kind of renewable energy market development solutions—with particular emphasis on wind energy—can be introduced in the Baltic States, especially in Poland, to strengthen the local energy market and make a real contribution to lower electricity purchase prices.

The configuration of countries defined for this research also provides the possibility of multifaceted support for this research with published data available in industry reports from numerous sources.

The structure of this study includes:

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Part 1—introduction;

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Part 2—a literature review related to the economic background of wind energy market development worldwide;

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Part 3—research results in the area of the wind energy market in Poland and the Baltic States, including an assessment of its current and potential development directions;

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Part 4—discussion and conclusions.

The findings of this study are a fundamental contribution to the attempt to solve the problem of finding solutions for the development of the renewable energy market, with a particular emphasis on wind energy, which may realistically contribute to lower electricity purchase prices in Poland and the Baltic countries.

Despite the quantitative and spatial limitations of the study, the presented results give a significant view on the possible development potential of a cheap wind energy market in the studied area, providing a basis for further research and analysis.

2. Wind Energy in the Global Energy Market—Literature Review

2.1. Wind Energy as a Global Energy Market Direction—Empirical Findings

There are numerous publications in the literature on RES, but bibliometric research has revealed that only 12.76% of them deal with wind energy [3].

Energy demand in the world is increasing, from the strong development of the infrastructure of cities, transport and broadly defined services [13,14,15]. The stability of the energy market assumes an increasing importance for the undisturbed functioning of societies and the continuous development of world economies [16]. It is worth noting that this trend has been reinforced by the outbreak of the COVID-19 coronavirus pandemic, articulating “remote working”, “remote teaching” and “remote consumer behaviour” and reinforcing electricity consumption.

The literature provides many analyses on the issue of the influence of energy conditions on the functioning and development of economies [17]. The cost of energy purchase plays an important role in shaping the structure of household budgets and strongly influence the cost of production of goods and provision of services, modelling the strength of the economic cycle. The above motivates the search for solutions giving the possibility to obtain cheap energy, stabilising the realities of functioning in the light of energy security [18]. In this regard, the RES market offers many solutions that constitute an alternative to the perspective of capital-intensive energy import [19], the choice of which is conditioned by the appropriate resources of renewable sources in the area creating the energy demand, which is the key justification for undertaking specific challenges with economic effects.

The shift in consumer preferences towards “green energy” observed worldwide results in a growing demand for it and an increasing trend in the development of the RES market [20], as a widely recognised alternative to conventional sources of energy generation [21]. However, does the scale of this development match the degree of increasing demand for energy from renewable sources? What economic aspects are associated with this course of action? These issues are of particular importance in countries that are generally dependent on energy generation based on classical solutions [22] (e.g., Poland [23]). The cost of energy production based on traditional solutions is shaped not only by the increase in the prices of energy-bearing fossil fuels and capital-intensive production technology, but additionally burdened with significant (increasing) environmental charges, including, among other things, the rights to emit carbon dioxide into the atmosphere in connection with the production performed, which in Poland currently exceeds EUR 20 billion. The above should also include the financial burden of damages caused by the implementation of traditional manufacturing processes (e.g., EUR 45 million to the Czech Republic for the operation of lignite mines and the Turów power plant in Poland, as compensation for the outflow of underground water from the national territory, air pollution, dust emissions and noise). Efforts to reduce the negative effects of traditional electricity production, leading to a strongly increasing market price of electricity per 1 kW, are determined by the adopted direction of the energy policy of countries [24], which, to varying degrees, open themselves to sustainable development [25,26] and follow the technological thought, in this field with a strong environmental and economic justification.

The literature highlights the global development of the renewable energy market [22] and the growing interest in RES solutions. Wind energy is particularly interesting [27], and is recognised as an important energy source [3]. This position is supported by the fact that wind energy reached 1590 TWh in 2020, accounting for 5.9% of the global electricity demand. China was the leading producer of wind energy in 2021 (half of the global capacity). Among European countries, Denmark (49.7%), Ireland (22.9%), Portugal (22.3%) and Spain (17.7%) achieved the highest share of wind energy in their national energy production [28]. The total global wind power capacity currently reaches 743 GW, affecting the unit price of power purchase and reducing CO₂ emissions to the atmosphere at the level of 1.1 billion tonnes of CO₂ [29]. The offshore wind energy market development is particularly noteworthy in the global wind energy market, with its global active capacity currently exceeding 50 GW, reaching a 0.3% share in the global energy supply.

The presented stage of the literature review confirms the strong development of the wind energy market in the global energy market. World powers and European countries are analysed and evaluated—in particular leaders in selected areas of the energy market or selected performance of particular countries together—mainly to determine their places in the ranking of results. In the authors’ opinion, insufficient research has been carried out on Poland compared to other countries from its environment, i.e., Central and Eastern Europe, hence the inspiration to take up the issue specified in the paper’s objective. The above is particularly important as the analysis of solutions applied in the economic practice of the Baltic countries may provide a stimulus for the development of the wind energy market in Poland; on the other hand, the analysis of solutions applied in Poland may be useful for modelling energy policy in the region.

The above reinforces the rationale for the analytical direction adopted in this study, focused on identifying this dimension of the energy market in the RES market, and this choice is reinforced by the results of the Sustainable Development Report 2019, Transformations to Achieve the Sustainable Development Goals [30], revealing the places of the analysed countries in the ranking of 193 UN members on the implementation of the Sustainable Development Goals by 2030 (including the green energy index), where Estonia is ranked 10th, Latvia 24th, Poland 29th and Lithuania 32nd (the authors were not able to determine the ranking in this respect during the COVID-19 pandemic).

2.2. Economic Background of Wind Energy in the Global Energy Market—Theoretical Findings

The issue of substantive and economic justification for implementing wind power projects is a constant point of analyses and discussions in the literature, as the primary motivation for undertaking any investment activity is the widely considered issue of cost optimization. The background of economic justification of investment activities undertaken on the wind energy market determines the efforts focused on increasing the efficiency of existing solutions in this area. Hence, this theme is present in the following part of the literature review, the purpose of which is to outline the essence of wind energy and articulate important determinants of wind installations, which in effect determine the cost of access to cheap electricity from the source in question. This is a particularly important consideration in the era of the COVID-19 pandemic.

2.3. Energy from Wind Is Created Based on the Wind Energy Conversion Factor (VSCF)

The most commonly used solution in this area is the use of a doubly fed induction generator (DFIG) and permanent magnet synchronous direct-drive generators (PMSG) [27]. These are the most popular wind energy conversion systems, the essence of which is created by the process of converting mechanical power from the wind turbine to alternating electric current, which, with the use of a converter (with a dc link), is converted to direct current, which in turn, with the inclusion of an additional PMSG inverter, can generate direct current with a voltage and frequency that allow the plugging into the grid [27]. However, integrating wind power into the power system implies many challenges. These include the problem of subsynchronous resonance (SSR), whose induction is derived from the wind turbine being connected to a series-compensated transmission line, or the provision of low-voltage ride-through (LVRT) [31]. Adaptability to wind speed is an important aspect determining the cost of construction and maintenance of a wind installation (turbine selection). The construction of transmission lines and energy storage facilities creates the remaining main costs, giving an average investment per megawatt-hour of just over EUR 40 [29]. However, attention should be drawn to the fact that the market turmoil caused by the COVID-19 coronavirus pandemic may contribute to a correction of the indicated price ranges.

Wind power is a key determinant of the efficiency of a wind installation. It is essential to characterise its strength in the field (mapping the geographical distribution of the wind resource potential [32]) in connection with the planned construction of a wind unit in order to relate the actual wind resource conditions to the installation parameters (turbine power [33]). This task is difficult, usually requiring many years of measurements and analyses, often regarding probability density functions (PDFs) [34]. Improving NWP+ML models for wind power prediction is becoming important [35,36,37,38,39]. The analysis of wind speed and wind power density distributions provides a basis for determining indices for selecting turbine power [40] under their planned performance. This is necessary to ensure the output and high quality of the electricity [19] (e.g., without voltage fluctuations [41]). At the same time, it is important to ensure a smooth operation of the system, minimising turbine outages and limiting the occurrence of mechanical stresses, which increase maintenance costs. The above reveals the relation between the maximum energy obtained from the wind and the cost of maintaining the installation [31]. Capital-intensive solutions to the overproduction of electricity and the need to store or dispose of surpluses cannot be ignored.

In order to maximise the use of energy obtained from wind and increase the economic effect of projects related to wind installations, it is justified to monitor system power points (MPPT) based on the control of the inverter connected to the generator. In this respect, the literature points to several methods [27,42,43,44]:

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Power feedback control MPPT;

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Fuzzy-logic-based control MPPT;

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Optimum tip speed ratio control (TSR MPPT);

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Hill climb searching control (HCS MPPT);

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Other.

Through the prism of optimising the efficiency of wind power installations, the above determines their effectiveness, increasing the economic justification of projects related to the acquisition of energy from wind. However, at the basis of the efficiency of wind installations lies the issue of the positioning of wind turbines strictly concerning wind resources and not in relation to the aesthetic value of the installation’s setting in its surroundings [45], which is all too often noted in practice (in particular in cities). In this respect, the level of knowledge on available wind energy resources and their stability is important. Scientific positioning of installations is an expensive undertaking, based on long-term and capital-intensive tests [46]. It is crucial to reduce the capital-intensive failure rate of wind farms, subject to the influence of highly turbulent flows from waves in the wind installation [47] or ambient turbulence [48].

The choice of the right one out of the available directions for “green energy” is facilitated by energy research. It provides a basis for modelling sustainable energy generation and energy management solutions, which, as a rule, involve a technological revolution requiring significant capital expenditure to construct energy generation and storage facilities. The demanding area in this respect is the random energy carrier. The measurement and proper selection of the parameters of a wind installation assume a critical importance for its efficiency, determining the return on capital over the assumed period [49,50]. However, the risk of estimation error here is significant due to the variable nature of the resource. However, given the steady increase in conventional power generation costs, the economic justification for undertaking wind energy production should be continuously increasing, considering the risk dimension outlined.

The presented literature review outlines the economic background of wind energy in the global energy market, indicating the importance of the problem for the cost potential of wind energy. Only an economically viable solution in wind energy can contribute to the cost-effective production of 1 kW of electricity through the conversion of wind kinetic energy. A complete knowledge in this area will provide the fullest possible view of the problem. It will provide the basis for reliable cost calculations, enabling the modelling of the payback period for an investment in a wind energy installation, in line with the profitability calculation model (rate of return), which assumes a particular importance in times of crisis caused by the COVID-19 pandemic.

3. Materials and Methods

The search for answers within the scope of the defined theses required the observance of the principles of comprehensibility of the research process and its relevance to information needed to interpret the analysed phenomena and predict their development properly. Hence, in the introduction to the paper, the conceptual dimension of the research was defined—it assumed an empirical and analytical character. The core of the research is the analysis of industry reports from the energy market in Poland and the Baltic Sea Region countries (Lithuania, Latvia and Estonia) adopted for the analysis and statistical reports and studies prepared at the level of individual countries and the European Union. At the same time, methodological limitations should be mentioned, resulting from potential differences in determining certain economic categories, which are the input data to the analyses (e.g., source material in the form of reports). The study was also based on our own research results concerning the diagnosis of wind energy development potential in the Polish energy market. Due to the order of evaluation of the problem studied in the study, the following methods were applied:

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Deductive (fragmentation), growing out of a thesis formula based on synthetic results, allowing for a search for causes and effects in order to identify them in detail;

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Inductive (fusion), which allows the exploration of individual themes and their subsequent generalisation in the form of conclusions and evaluations.

The above simple methods of analytical procedure were applied to a number of research dimensions undertaken in this study.

The research included situational and comparative analysis methods. In the analysis of trends in the development of phenomena, techniques specific to the prediction of phenomena were applied. The layout of the research was systematised in the algorithm below (Figure 1):

The literature research was based on numerous national and international industry studies, considering the most recent research on the subject. Particular attention in the world literature analysis was paid to considerations related to the wind energy market, considering its current development trends. The content analysis was critical of current solutions in increasing the operational efficiency of wind energy installations, which strengthen the economic justification for their construction.

The literature on wind energy is quite extensive. It presents numerous solutions concerning wind power installations’ technical and economic aspects. The importance of the subject matter for the development of economies has been emphasised. There is, however, a lack of appropriate studies at the level of individual countries, including a significant topic for the authors, i.e., the assessment of development prospects of the wind energy market in Poland in the realities of the global energy transformation. The above justifies the choice of the topic and the instruments used to explore it. Hence, the research was based on international professional literature comprising articles and scientific studies, including international reports, forecasts and estimates.

The authors have dealt with the key trends and issues in the research, allowing the analysis of experiences on a global scale, in comparison with the experiences of the Baltic States and Poland, to answer the questions posed in the study. In this respect, a critical analysis of the current situation was carried out, taking into account the findings of our own research (interviews with selected companies from the energy sector—RES branch) to create reliable conclusions. In order to reliably assess the prospects for the development of the wind energy market in Poland, the results of our own research, “Effectiveness of offering—RES” (analysis of questionnaires and opinions of customers and potential customers of a major wind energy design company in Poland, November 2021) were used. Moreover, the results of this research dimension made it possible to define recommendations that added value to the findings.

The authors’ primary objective is to deepen the knowledge taking into account the results in the field of green energy, to use it in the definition of a model for wind energy solutions tailored to the realities of the Polish economy and the countries of the Baltic Sea basin. The above serves as a basis for modelling wind energy development plans and further research, broadening the spectrum of data and allowing for reliable modelling forecasts.

4. Results

4.1. Determinants of Wind Energy Market Development in Poland and the Baltic States

The main justification for implementing renewable energy solutions is the rising cost of conventionally produced electricity. This cost assumes a particular importance in the economic dimension in the era of the COVID-19 pandemic, contributing to price increases that financially hit society and business. At the same time, the social dimension is important, in the form of a negative impact on the environment (emissions, discharges, noise) with continuous deterioration of the quality of life in a polluted environment. Essential for investment activities in the field of RES are economic conditions of the outlined phenomena, directly related to the price of electricity, which, from 2019 through 2021 in specific tariff groups, increased for Poland (+10.6%) and Lithuania (+3.1%), and was adjusted downwards (reduction) for Latvia (−3.35%) and Estonia (−7.5%) [51].

The average purchase price of electricity of Poland and the Baltic States at the turn of the year 2021 and 2022 reached an average level of EUR 0.145/kWh. The detailed distribution of prices per 1 kWh from January 2019 to the beginning of January 2022 in Poland and the Baltic States is presented in

Table 1. Average electricity prices per kilowatt-hour from January 2019 to early January 2022 in Poland and the Baltic States [52].

Average Electricity Price in the Period 2019–2022 EUR/kWh (Month/Year)
	January–December 2019	January–December 2020	January–June 2021	December 2021–January 2022
Poland	0.14	0.15	0.15	0.17
Lithuania	0.12	0.13	0.13	0.14
Latvia	0.16	0.14	0.14	0.14
Estonia	0.14	0.13	0.13	0.13

.

The above reveals higher electricity purchase prices in Poland than the Baltic States analysed, by 17.2% on average. Hence, it is reasonable to carry out a more detailed analysis of the burden structure of electricity price increases in Poland in the period 2019–2022 (Figure 2).

The effects of the significant increase in electricity purchase prices in Poland from January 2022 were amortised by a reduced value-added tax rate from 23% to 5% [53].

The analysis of detailed parameters of electricity price increases for end consumers, by tariff group, carried out by the leading electricity supplier in Poland in February 2020–February 2022, revealed the values shown in

Table 2. Electricity price increases for end consumers of the leading electricity operator in Poland, by tariff group, in the period February 2020–February 2022 [54,55,56,57,58].

Segment	Tariff Group	Tariff	24 h Gross Commercial Service Rate (EUR/MWh)
			Value Change (Month/Year)
			From	From	From	From	From
			February 2020	July 2021	November 2021	January 2022	February 2022
			EUR/MWh
BIG BUSINESS	Mega business	A21	90.3	99.4	114.2	140.5	189.7
	Business	B21	90.3	99.4	114.2	140.5	189.7
	Standard	B11	93.9	103.3	118.7	143.6	193.9
MEDIUM BUSINESS	Company	C21	0.09	0.10	0.12	0.14	0.19
SMALL	All day	C11	0.09	0.10	0.21	0.14	0.20
BUSINESS
Segment	Tariff Group	Tariff	24 h Rate for Commercial Service
			Gross (EUR/MWh)
			Dynamic of Price Changes (Month/Year)
			February 2020–July 2021	July 2021– November 2021	November 2021–January 2022	January 2022–February 2022
			EUR/MWh
BIG BUSINESS	Mega business	A21	+9.09%	+13.01%	+18.70%	+25.9%
	Business	B21	+9.09%	+13.01%	+18.70%	+25.9%
	Standard	B11	+9.08%	13.01%	18.70%	+25.9%
MEDIUM BUSINESS	Company	C21	+6.86%	+12.8%	+17.60%	+26.04%
SMALL	All day	C11	+16.8%	+49.5%	−43.24%	26%
BUSINESS

.

The elements of the current price structure adopt the following relationships:

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Cost of electricity generation;

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Distribution cost;

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Cost of CO₂ allowances: 22.61%, with calculations of 59% being encountered;

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Transition charge;

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Cogeneration charge;

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RES charge;

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Power fee;

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VAT.

The expiry of the Electricity Pricing Act, which was in force until the end of 2019, contributed to a severe price increase from January 2020. During this period, the charges for daily CO₂ emissions started to increase dramatically from the previous level oscillating around EUR 30/ton in January 2020, through a level in the range of EUR 60/ton in December 2020, to a level exceeding EUR 85/ton in December 2021. This mechanism has directly shaped the currently quoted electricity price level.

Against the background of the analysed group of countries, Poland had the highest electricity price increase, although compared to the European average, this result did not look too bad—Figure 3. Unfortunately, the Energy Regulatory Office forecasts in Poland do not reassure consumers. Further increases in energy production costs and distribution prices are expected.

Another factor contributing to the global increase in electricity prices is the random factor of the COVID-19 coronavirus pandemic. The negative economic impact of this condition can be attributed to temporary restrictions on the extraction of fossil fuels and rising material costs, disrupted supply chains, production and shipping processes—due to business restrictions, up to and including lockdowns. At the same time, the trend in electricity demand continues. This background draws a strong demand for energy from renewable sources, which takes the largest fixed share of the energy system with the lowest variable costs, ahead of nuclear power plants, but above all of the least economically viable coal-, oil- and gas-fired power plants. In modern energy policy, the share of the latter is assumed to be complementary to the RES and fission energy base in production processes, whereby high energy demand results in their continuous integration into production processes. In this way, cheap energy from renewable sources is increased by the actual cost of producing “expensive electricity”, shaping the current market price of purchasing 1 kW—Figure 4.

The analysed model of the energy system illustrates the necessity and economic justification for taking actions aimed at strengthening the share of RES solutions in the overall energy system, and the observed upward trend of components creating the structure of electricity prices in Europe strongly motivates to take action.

Considering the discussed topic at the level of the Baltic Sea states adopted for the study, a significant importance in the modelling of energy supply solutions can be attributed to the uncertain policy of the East. It is worth noting that on 8 and 11 April 2021, Lithuania was cut off from energy supply from Belarus, while Latvia stopped importing energy from Russia. Hence, in December 2021, during the Baltic Council of Ministers with the participation of the heads of government of Lithuania, Latvia and Estonia, the direction of achieving energy independence and national security of the region by plugging into the electricity system of the continental European grid in 2025 was confirmed, as well as the need to increase electricity production in order to reduce its prices. The argumentation cited in the paper indicates that the most appropriate direction for strengthening the energy base is the RES market, hence the expectation that the countries of the Baltic Sea Region will also follow this direction. The above expectation has turned out to be fully justified, as the Baltic Sea countries are strongly investing in a green energy industry strategy, including solutions oriented towards the conversion of the kinetic energy of moving air masses into electricity, using wind turbines. The benefits of these installations are tangible. According to the latest reports (8 February 2022), the January wind contributed to lower electricity prices in all the countries of the Baltic Sea basin, where wind installations are important in the overall energy system. The above is expected to reduce electricity prices month-on-month in Lithuania (−31%) and stabilise relatively favourable electricity prices in Latvia and Estonia. This is an important argument confirming the rightness of making efforts for RES development, with a particular emphasis on wind energy in the Baltic Sea region analysed.

4.2. Analysis of the Wind Energy Market in Poland and the Baltic States

The wind energy market in Poland and in the countries around the Baltic Sea is developing rapidly. In Poland, where the dominant power sources in the energy mix are coal and lignite, the capacity of installed onshore wind installations in 2020 reached 6.35 GW, and in 2021, the electricity production from renewable RES sources were nearly 28 TWh, where almost 16 TWh (57.14%) came from wind energy [29] (the share of RES in the total electricity production in Poland in November 2021 was 15%). The above indicates that wind energy may be an important link in transforming Polish conventional energy into an environmentally friendly (clean) and attractive (cheap) one for consumers. The restriction in the development of wind farms in the period 2017–2019 (with 2017 dynamics to 2018: 0.7%, 2018 to 2019: 1.01%, 2019 to 2020: 6.77%) was triggered by unfavourable formal and legal regulations (“Distance Law”), defining minimum distances from buildings (10 times the height of the installation), which the wind energy sector expects to be liberalised (abolition of the 10H rig), in order to enable the implementation of projects related to its development in Poland, through the construction of technologically advanced, economically efficient farms. With the revision of the regulations announced for this year, the construction of new onshore installations could be launched as early as 2024. The current regulations encourage the search for solutions in offshore wind farms. The potential of the Baltic waters in this respect is immense, as the farms currently operating in this territory provide only 2.6 GW, with a diagnosed potential by 2050 of 90 GW [60]. According to “Poland’s Energy Policy until 2040”, in 2030, Polish wind energy will continuously increase its capacity and, through investment, the first offshore wind farms are to be commissioned in 2024. The year 2040 is to be characterised by 11 GW [60] of capacity. Such a strong development must be ensured by basing the domestic RES energy market on wind energy [61]. The resilient development of this energy sector in Poland attracts the attention of neighbouring countries as more and more countries in the Baltic Sea region are interested in Polish wind energy companies, particularly Lithuania.

Lithuania’s share of renewable energy production in the energy balance of the European Union already reached an impressive 80% in 2019. Lithuania’s further efforts in the sphere of RES strengthening are evident. The development of wind energy is progressing gradually. The total capacity of wind power plants has reached 400 MW, of which 25% is the power generated from the installations put into operation during the pandemic (2021).

In Lithuania, similarly to Poland, a significant attention has been focused on offshore wind energy. Analyses of the potential of offshore wind farms in the Baltic Sea are being carried out, and their capacity is estimated to be 700 MW, which from the supply side gives 2.4–3 TWh of energy potential, with the capacity to secure at least 25% of Lithuania’s electricity demand. Importantly, offshore wind farms are expected to power Lithuania’s grid by 2030.

Wind energy development is currently a priority in Lithuania, related to strengthening energy independence. This is a very important topic, as 60% of the energy needs in Lithuania are secured through imports.

The Latvian RES market is created by hydropower and biomass plants and a wide potential of wind energy, creating the share of renewable energy in the EU balance at the level of 35.2%, giving it the third position among the EU countries. Riga decision makers plan to gradually expand the share of wind technologies in the adopted energy policy and gradually move away from basing electricity production on firewood. According to Latvia’s assumptions and climate aspirations, the share of RES in the total national energy market is to reach a level of up to 55% by 2030. In order to realise the above, Latvia has limited the financing of investments based on fossil fuels or natural gas, while introducing an attractive system of tax incentives, orienting the development of the sector towards clean energy. Wind energy plays a particularly important role in this sphere, with a potential demand for about 500 MW of generating capacity, in order to achieve the assumed goals of improving energy efficiency in this country.

The RES market has been strongly established in Estonia. The raw material most heavily used in energy production there is high-carbon bituminous shale, whose energy production, as recently as 2018, accounted for 70% of the market share, overtaking the energy supply of biomass resources, where greenhouse gas emissions from shale energy production took 90% of Estonia’s total emissions volume. The above has prompted the search for alternative energy sources.

In 2018, 1665 GWh of electricity was obtained from renewable sources in Estonia, which represented a 17% share in the energy mix. In 2020, the level of RES in the total gross consumption had already reached 30%. Perhaps the resilient development of this market is determined by the essential participation of the Estonian State Treasury companies in the structure of the sector’s entities, together with the system of incentives in connection with offering certified ecological packages.

An increased demand for green energy results in increased RES activities in the studied region. The above results in interest in wind energy potential obtained at sea [62,63,64] (the Baltic Sea), a strongly growing source of renewable energy [65,66]. This creates opportunities for an intensive development of Poland and the Baltic States in wind technologies, contributing to the planned reduction of greenhouse gas emissions and increasing the economics of wind power generation, determining the market price of electricity. Dynamic wind energy development is hampered by current, often underdeveloped, formal and legal regulations. The above refers in particular to innovative solutions undertaken for the first time at the level of individual economies, such as challenges in the sphere of innovative offshore wind farms in Poland.

The capacity of the energy systems of individual states is in the interest of neighbouring countries. The degree of energy security of the region is determined by the dimension of international cooperation on the issue of connection to general wind systems and cross-border cooperation in the sphere of energy exchange and supply. In this respect, the strongest field of cooperation is seen in the wind energy of the Baltic Sea states.

Latvia and Estonia cooperate on offshore wind energy by working on wind solutions in the Gulf of Riga. More intensive wind energy development in the region calls for cooperation between Poland, Lithuania, Latvia and Estonia [67]. In the total offshore wind potential of the Baltic Sea (93.5 GW), Latvia has the highest share of 15.50% with 14.5 GW of installed capacity and Lithuania has the lowest share with 4.8% and 4.5 GW [68]. The detailed distribution of shares in the potential in question is presented in Figure 5.

This requires investment in the infrastructure necessary for the production and trade of energy, which is nowadays connected with a system of efficient, intelligent and cyber-secure networks. This dimension of investments is to be substantially fuelled by the European Union, focusing on the development of infrastructure for network connections between countries across the Baltic Sea. The potential of the sea is a key instrument in reducing CO₂ emissions, according to the European Green Deal [69]. Importantly, these tasks are carried out in the reality of the COVID-19 pandemic, taking into account the risk of changing unit prices for the implementation of activities

4.3. Analysis of Wind Energy Market Development Potential

Wind energy is a source of cheap, clean energy, whose share in the energy mix contributes significantly to reducing electricity purchase prices. As a rule, wind power plants are technologically advanced and costly solutions, most often with significant connection capacities, referred to as investment projects undertaken by market players. However, wind power plants, similarly to photovoltaic installations, may have a diversified character determined by their energy potential, and their application may be practised both at the level of strategic units and institutional or individual consumers. A literature review on the subject reveals scarce discussions on small wind installations dedicated to individual consumers. The results of our research, “Effectiveness of offering—RES” (an analysis of questionnaires and opinions of customers and potential customers of a major company designing wind installations in Poland, November 2021), confirm a significant lack of knowledge about the possibilities of using small wind power installations (48% of respondents) and about the types of solutions available on the Polish market (73% of respondents), while revealing a potential interest in the subject (93% of respondents).

Therefore, it is worth noting that several photovoltaic solutions are of different capacities, dedicated to individual consumers and companies. Among them, the following ones stand out:

(a)

Advanced solutions, with connection powers from 8 kW to 30 kW:

−

Fully automated in controlling the operation of the wind generator;

−

To support the supply of power to the facilities;

−

With the possibility of connection to the power grid.

(b)

Small domestic solutions of 0.5–5 kW:

−

To support the supply of power to installations, consumers;

−

With the possibility of backing up with mains power on windless days to ensure continuity of the energy supply (minimum power).

(c)

Small wind power installations of 0.1–1 kW:

−

To complement the energy potential of the facility;

−

For the point supply of selected consumers.

These installations are in the form of classical windmills, horizontally—horizontal axis wind turbines (HAWT), or in turbines with a vertical, noiseless axis of rotation—vertical axis wind turbines (VAWT)—Świder, drum and other. The type and size of the installation is determined by its power and the requirements for the foundation (permanently fixed to the ground on a foundation footing, on a free-standing mast, on the roof of a building). Large installations in this category of wind turbines have a rotor diameter greater than 3 m, a power output greater than 2000 W and a generator weight greater than 200 kg. Small installations belong to the solutions group with parameters lower than those mentioned above. Small wind installations are also equipped with batteries with a dc/ac converter, heaters with a controller (water, central heating), an on-grid converter giving the possibility of electricity resale to the power grid, integration with mobile communication devices for analytical purposes, etc., therefore increasing their functionality, which creates their market attractiveness.

It is estimated that small wind installations are two to three times more efficient than photovoltaics—the average annual electricity production from a 15 kW turbine is about 31,000 kWh. The most popular installations in Poland are microinstallations with a capacity of 3–5 kW. The installation on a residential building does not require any permits (apart from a height restriction of 3 m relative to the roofline), which provides considerable freedom of operation. However, it should be noted that free-standing installations are subject to certain restrictions. The cost of a wind installation depends on the connection capacity. The solutions adopted currently vary between about EUR 5000 for a 3 kW installation, about EUR 8800 for a 5 kW installation, and about EUR 1700 for a 10 kW wind installation.

By mid-2021, below 80 micro wind installations with a total capacity not exceeding 0.4 MW had been built in Poland, representing only 0.05% of all RES microinstallations. The availability of information in relation to the development of micro wind power plants in the Baltic States is negligible, which may mean that, as in Poland, their installation is not very popular. This situation may change with the development of commercial wind farm installations and information on their performance. Polish companies operating in the wind energy sector have announced the promotion and sale of Polish micro wind products in Lithuania and Estonia. The micro wind market is still the future, both in Poland and in the Baltic States, although the above may herald an increased interest in developing the small wind market. The lack of an appropriate information and promotion campaign and a support programme motivating to invest may directly cause the observed state of affairs.

Wind conditions in Poland anchor the potential for developing this wind energy direction and in the Baltic States provide a good potential for the development of projects of this type. In Poland, most areas have relatively favourable wind conditions. An average of 250 windy days per year is recorded with an average annual wind speed of 2.8–3.5 m/s, which creates conditions for good performance of wind power installations. This potential must be exploited. This is an important direction of action to reduce the purchase price of electricity by individual consumers or small businesses.

The appropriateness of micro wind development is further confirmed by the results of the referred studies, which show that:

(a)

Around 71% of consumers who purchased micro photovoltaic installations were interested in extending them with wind installations;

(b)

Around 47% of the potential consumers, responding to a market survey of the RES microinstallation market, indicated wind microinstallation as a potential direction of their future choices, with the majority of respondents indicating wind energy (at the discussed level) as a complementary source of electricity, i.e., in combination with other RES installations—photovoltaics, heat pumps, recuperation);

(c)

In terms of interest in the type of wind installation, respondents interested in wind energy indicated:

−

Small microinstallations 3–5 W, with an option to install them on building structure: 53%;

−

Stand-alone solutions not exceeding 10 kW: 11%;

−

No choice was indicated for 36% of respondents.

(d)

Around 14% of respondents were willing to consider investing in a wind installation in the near future,

(e)

Around 32% of respondents had no opinion on the possible need for investment in wind energy,

(f)

Around 7% of respondents were not interested in a wind installation.

The presented research results indicate a significant potential for developing the wind microinstallation market in Poland. In this regard, it seems necessary to undertake actions towards:

(a)

The promotion of knowledge about wind installations in the subject:

−

Types, power, purpose, functionality, etc.

−

The impact of wind turbines on the surrounding area, as concerns about general safety have been revealed (research results), the impact of magnetic fields on users and their surroundings, noise emissions—including reference to acceptable standards—other potential nuisances in connection with the installation;

−

Maintenance of installations in the long term, combined with efforts to provide professional advice.

(b)

To improve the range of available products due to the visual aspect of solutions, allowing the installation to be integrated into an attractive building envelope or stylish backyard garden.

When considering the above, one cannot forget about the key determinant—the financial incentive to undertake such challenges, adequately communicated to the recipients’ potential. Although this theme was not revealed in the study, in the opinion of the study’s authors, it cannot be omitted in any way.

The interest in micro wind installations is a very good sign. The development of wind energy may contribute to the expected improvement of financial conditions for the purchase of electricity on the market and climate impact parameters in connection with the ambitious global goal of achieving climate neutrality. Implementing mass green solutions, including micro wind power installations, is an excellent step towards strengthening proenvironmental measures [70] and making long-term environmental goals more credible [71].

5. Discussion

The results of the considerations presented in this paper indicate that the development of wind energy in Poland and the Baltic States is the right direction to strengthen the RES sector.

The main conclusion from the conducted research confirms the validity of the adopted direction of development of the RES market in Poland and the Baltic States, taking into account arguments of social and economic nature. A socio-economic justification for the development of the wind power sector emerges against the background of the EU energy policy, coupled with the conditions for the possible development of individual economies and the costs of achieving the adopted targets.

Summarising the findings, it should be pointed out that the initial data from the analysis of the wind energy sector in Poland and the Baltic Countries confirmed the observed general trend of development of the market in question towards offshore wind farms. An analysis of socio-economic conditions leads to believe that the adopted direction of actions will be successful in terms of RES strengthening in the studied area. It has been revealed that spectacular investments in terms of technological advancement and costs have overshadowed the promotion of simple wind solutions (microinstallations), the launch of which, e.g., in a number analogous to that of photovoltaic installations, would provide effective support for the implementation of the EU Green Deal policy and would significantly reduce the cost of 1 kW of energy for end consumers. The above may serve as an inspiration for strengthening activities to promote the (informational and financial) energy generation from wind. The above refers particularly to the Polish market, where the share of RES in the national energy system is the lowest among the analysed countries, which results in higher electricity prices expressed in the growing market price per 1 kW of electricity. The analysis of the results of our own mentioned research confirmed the existing potential for developing the mini wind energy market in Poland (93% of the respondents), together with the arrangement of the basic activities expected by the market in this respect. Therefore, investments in micro wind installations, carried out on a broad scale, may contribute to a real reduction in the cost of electricity for domestic consumers. Rapid implementation of the above is possible in the light of favourable aid solutions, which should be correlated with the adopted environmental policy. The system of incentives (subsidies or tax deductions) has created the strong development of photovoltaic installations in Poland and in the Baltic Sea countries studied. It is worth paying attention to this dimension of support in order to repeat this success.

Public support for wind farm development in Poland is very important. This is confirmed by the results of the conducted surveys. Therefore, the expectation of wind farm development in Poland may be associated with an urgent need to amend the existing distance law (10 H), which significantly limits the development of onshore wind energy in Poland. The above constitutes an important conclusion and recommendation of this research.

The area of the formal and legal framework and possible sources of support for the implementation of investment activities in wind installations is a research topic that requires a separate study. The justification for the above are, among others, the revisions of existing regulations in this area announced this year. The above creates an important research problem that provides a basis for revising the potential of formal, legal and financial limitations related to the findings of the conducted research. This is an important future research direction for the development and verification of theses on the possible development of the wind energy market in Poland, determining access to cheap electricity, especially needed in the era of the COVID-19 coronavirus pandemic.

It is worth pointing out that in the area of the countries accepted for the study, there were no studies devoted to analysing the prospects for the domestic wind energy industry from the perspective of the global energy transformation. Therefore, the research was based mainly on foreign scientific articles, studies, international reports, forecasts, prognostic estimates and statistical data. On their basis, the authors tried to grasp the main trends and issues related to the explored issues to consistently move from the global experience to the Polish and the Baltic countries’ experience to answer the explored question. A critical analysis of the current situation was carried out and conclusions were drawn from an analysis of end consumer behaviour surveys and interviews conducted among representatives of companies active in the field of energy transformation were presented in order to work out a position regarding the intentions for the development of the wind energy market. All this was conducted to develop an up-to-date vision of plans and intentions (reliable forecast estimates).

The worldwide opening of environmental [72] protection and green energy [73,74,75] gives grounds to expect that the demand for green energy from wind will function on a large scale in Poland and the Baltic States. This is an important direction for developing investments in RES, giving a wide range of potential consumers the benefits of clean and cheap energy.

The reality of the COVID-19 coronavirus pandemic may affect the financial and organizational aspects of implementing activities and undertakings in the field of the implementation of climate policy assumptions of individual countries and the related transformation of energy sectors at the level of individual economies. The main problems in this regard arise from the lack or limited availability of production components, delays in the supply of materials and longer lead times for investments. Hence, the impact of COVID-19 on wind energy development in Poland and the Baltic States is mainly due to supply chain disruptions and delays in investment execution due to labour shortages. The above contributed to several months of delays in investment implementation. The current increase in prices of goods and services—also affecting the RES industry—is also partly a result of the weakening of the economy as a result of COVID-19.

The experience to date, related to implementing the projects discussed in this paper in the realities of the COVID-19 coronavirus pandemic, is optimistic. Contrary to the liquidity constraints, investments in the sphere of wind energy have reached a record level of EUR 26.3 billion in 2020, due to the implementation of offshore wind installations, which enables the continuation of efforts to acquire 7.1 GW of new connection capacities [76]. The above is promising and gives rise to predictions that the development of the wind energy market in Poland and the Baltic States will continue, enabling compliance with environmental requirements for the EU member states.

The findings of this study are a contribution to the problem of finding solutions for the development of the renewable energy market, with a particular emphasis on wind energy, which may realistically contribute to lower electricity purchase prices in Poland and the Baltic countries.

Despite the quantitative and spatial limitations of the study, the presented results give a significant view on the possible development potential of a cheap wind energy market in the studied area, providing a basis for further research and analysis in this area, with the use of more advanced instruments.