ORLEN Group and S&P Agency Report: Closer energy ties between Poland and other states of the Baltic region could unlock cheaper and more sustainable energy
Stable supply of electricity at affordable prices, achieving full independence of the Baltic Sea region from Russian supplies, as well as clean air, thanks to joint projects for the development of new technologies, including hydrogen, are potential benefits of cooperation between the Baltic countries, according to a new report by the ORLEN Group and S&P Agency. The report assesses the progress of the energy transition in the region and identifies opportunities for collaboration to accelerate decarbonisation efforts. It outlines specific areas of cooperation and their expected outcomes, following an in-depth analysis of conditions across eight countries: Poland, Germany, Denmark, Sweden, Finland, Lithuania, Latvia, and Estonia.
“We are actively shaping the future of the energy sector in the Baltic Sea region, which is critical to Poland’s energy security and economic future, as well as to the broader European energy landscape. By 2035, we plan to invest up to PLN 380 billion in renewable energy projects, including offshore wind, as well as in gas infrastructure and new technologies, particularly energy storage solutions. By working together with regional partners, we can fully harness the region’s potential and deliver more secure, affordable, and cleaner energy for Poland and our neighbours,” said Ireneusz Fąfara, CEO and President of the ORLEN Management Board.
The report, “Baltic Cooperation: Momentum for Energy Transition”, highlights the region’s strategic importance to Europe’ decarbonisation, given that it accounts for more than a third of the EU’s total energy consumption and emissions. The combined potential for renewable energy generation, including offshore and onshore wind, solar, and hydropower, is immense, estimated at 4,400 TWh, 4.5 times the total Baltic countries' energy output in 2023. Yet, the region still faces the classic energy trilemma: how to balance security, sustainability, and affordability.
One of the most effective solutions could be stronger collaboration, in particular between the eight Baltic countries: Poland, Germany, Denmark, Sweden, Finland, Lithuania, Latvia and Estonia, which could accelerate the energy transition by fully leveraging the region’s potential.
The report finds that expanding energy interconnectors, enabling cross-border transmission of electricity and gas, could generate annual savings of EUR 9 billion (over PLN 30 billion) by 2040. This infrastructure may also improve the utilisation of existing LNG terminals and pipelines, optimising the distribution of 52 billion cubic meters of imported LNG by 2030, according to S&P experts.
Hydrogen is another promising area for cooperation. As a clean energy source, hydrogen and its derivatives could help decarbonise heavy industry and transport in the Baltic region. ORLEN supports the idea of a regional hydrogen auction, which would give industrial players better access to cost-effective, stable hydrogen supplies.
The region continues to face the challenge of reducing hard-to-abate emissions from dispersed industrial sites. One promising solution is storing captured carbon beneath the Baltic Sea, a secure method already proven in the North Sea. This is in line with the ORLEN Group’s new strategy, which includes building capabilities in carbon capture, transport, and storage for up to 4 million tons of CO2.
The total offshore wind potential in the Baltic Sea stands at 93 GW, yet only about 3 GW is currently operational, compared to 32 GW in the North Sea. Experts emphasise that without enhanced collaboration on maritime spatial planning and harmonised permitting processes, achieving the Marienborg Declaration’s target of 19.6 GW of installed offshore wind capacity in the Baltic by 2030 may prove unattainable.
Developed on the initiative of ORLEN and S&P Global Commodity Insights, the “Baltic Cooperation: Momentum for Energy Transition” report provides a comprehensive look at energy sector developments in Poland, Germany, Denmark, Sweden, Finland, Estonia, Latvia, and Lithuania.
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