Stable electricity supplies at an affordable price, full independence of the Baltic Sea region from Russian supplies, and clean air through joint projects to develop new technologies, including hydrogen – these are the potential benefits of cooperation between the Baltic countries. ORLEN Group and S&P Agency have prepared a report summarising the status of the energy transition in the Baltic Sea region and the opportunities for cooperation to promote decarbonisation. Specific areas of cooperation and their effects were identified after a thorough analysis of the circumstances of the eight countries of the Baltic Sea region – Poland, Germany, Denmark, Sweden, Finland and Lithuania, Latvia and Estonia.
– We are actively shaping the future of energy in the Baltic Sea region, which is of strategic importance for energy security and the economy of Poland and the entire region. By 2035, we will have invested up to PLN 380 billion in, among other things, the development of renewable energy sources, including offshore wind power, as well as gas infrastructure and new technologies, particularly in the area of energy storage. By cooperating with other entities in the region, we can use its full potential and provide safe, cheaper and cleaner energy for us and our part of Europe – says Ireneusz Fąfara, President of the Management Board of ORLEN.
The report ‘Baltic Cooperation: Momentum for Energy Transition’ prepared by ORLEN Group and S&P Agency indicates that the Baltic Sea region accounts for more than one third of energy consumption and emissions in the European Union, making it an area of strategic importance for the decarbonisation of Europe. The total potential of installable RES sources (offshore and onshore wind, solar and hydro) is 4,400 TWh, 4.5 times the total energy production of the Baltic region in 2023. At the same time, the region is facing a classic example of the energy dilemma, i.e. the search for how to reconcile energy security, sustainability and affordability.
The solution may lie in closer cooperation, especially between the eight countries in the region – Poland, Germany, Denmark, Sweden, Finland and Lithuania, Latvia and Estonia – which would allow the region to fully exploit its potential and, as a result, achieve its energy transition goals more quickly.
According to the report, savings of EUR 9 billion (more than PLN 30 billion) per year by 2040 could be generated by the development of energy interconnectors, i.e. connections for the transmission of gas between countries. Investment in these could support the use of LNG terminal and pipeline capacity in the region. According to S&P experts, the development of existing regasification infrastructure would optimise the distribution of 52 billion cubic metres of imported LNG in 2030.
Hydrogen technologies are also a field for cooperation between the Baltic countries. Hydrogen and its derivatives could be a key decarbonisation solution for heavy industry and transport in the Baltic region. ORLEN supports the idea of a regional hydrogen auction, which would allow industry cheaper and more stable access to this fuel.
The challenge for the Baltic countries is to reduce hard-to-reduce emissions from dispersed industrial plants. A solution with great potential could be the construction of special storage facilities and the storage of carbon dioxide under the bottom of the Baltic Sea. This is a fully tested and safe solution that has been used successfully, for example, in the North Sea. The new strategy of the ORLEN Group, which assumes the construction of capacities in the field of capture, transport and storage services with a potential of 4 million tonnes of CO2, fits into these assumptions.
The total offshore wind potential in the Baltic Sea is 93 GW, of which only about 3 GW are partially operational. This compares to 32 GW in the North Sea. Experts emphasise that without the start of cooperation in offshore spatial planning and a harmonised approach to permitting, it may not be possible to meet the target set in the Marienborg Declaration – 19.6 GW of offshore wind capacity in the Baltic Sea by 2030.
The report ‘Baltic Cooperation: Momentum for Energy Transition’ was produced on the initiative of ORLEN and S&P Global Commodity Insights. The analysis takes into account Poland, Germany, Denmark, Sweden, Finland, Estonia, Latvia and Lithuania.
The report can be downloaded here.
Source: Orlen
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