Łódź one of the first cities in Poland with green energy

The City of Lodz is one of the first in Poland to introduce a modern model for purchasing green energy – the corporate PPA (cPPA) [1]. The city, being a pioneer in public sector procurement of green energy, demonstrates that local governments can effectively use this innovative tool to not only hedge energy costs, but also support the development of renewable energy sources.

Lodz a future hub for green innovation?

Purchasing green energy directly from the generator is part of Lodz ‘s ambitious climate neutrality goal. The Climate Neutral and Smart Cities Mission (City Climate Mission) is one of the European Commission’s strategic initiatives to create 100 climate-neutral and smart European cities by 2030. They will become hubs of eco-innovation, paving the way for other European cities to become climate neutral by 2050.

The increase in energy prices due to the geopolitical situation in 2022 has hit local governments hard. Money hitherto earmarked for investment and development has had to be redirected to cover the rising cost of a basic commodity – energy – says Hanna Zdanowska, Mayor of the City of Lodz.

Green energy boom

In addition to the planned green energy purchases under the PPA formula, the city is constantly taking other measures to improve energy efficiency, increase the share of energy from RES and better utilize the potential of renewable energy.

A photovoltaic farm with a capacity of about 32 MWp is planned for the permanent structure, which could reach an annual electricity generation capacity of about 30 GWh. It will be used by municipal units at energy consumption points distributed throughout the city’s territory – Hanna Zdanowska says.

Moreover, the City of Lodz has joined the Lodz Energy Wave Cluster, whose members also include Veolia Energia Lodz S.A., Aqua Park Lodz Sp. z o.o. and Lodz University of Technology. The anticipated benefits of the agreement are mainly to be: reducing energy production costs, ensuring local energy security, improving the quality of the environment and increasing the competitiveness and economic efficiency of the local economy, as well as increasing public awareness of pro-environmental attitudes.

I am pleased that my City is systematically replacing road lighting with modern LED lights with intelligent control systems. Thermal modernization of municipal buildings is constantly being carried out, along with the installation of photovoltaic installations (currently 68 operating installations with a total capacity of about 2 MW) – Hanna Zdanowska says.

The city is also systematically replacing interior lighting in municipal buildings and carrying out activities related to optimizing the parameters of distribution contracts and reactive power compensation.

Global trends

In the first half of 2024, renewable energy sources (RES) in European Union countries produced more electricity than fossil fuel-based energy sources, according to an analysis by think tank Ember. In 2024, global renewable energy production increased by 8.4 percent, and will grow at an average annual rate of 7.2 percent in the following years. This means that renewable energy sources (RES) will not only meet additional demand, but also displace some fossil fuels.

Solar power reached a historic milestone in 2024 – it produced more energy than coal-fired power plants in the European Union. The share of RES in the EU’s energy mix will increase from 48 percent in 2024 to a projected 56 percent. 2027. Against the background of Europe, the Polish electricity market is one of the more expensive ones, but we are still far from the leaders of the list. Electricity prices were dragged up last year, especially in the Balkans, where it was expensive both in summer, due to heat waves, with photovoltaic shortages in that region, and in winter.

The cheapest markets in Europe have traditionally been countries with a very high share of emission-free sources (renewable and nuclear power plants) – Scandinavia, Finland, France and Spain and Portugal. Interestingly, when we juxtapose electricity prices and the share of emission-free sources in electricity production in 2024, we see a strong correlation. In short, the more carbon-free energy, the lower electricity prices on the exchange.

Source: Press Office City of Lodz

[1] Power purchase agreements (PPAs) are direct, tailor-made contracts between a renewable energy generator (seller) and a renewable energy consumer (buyer). They enable the purchase of clean, green energy on a large scale and at attractive prices. To date, this purchasing model has only been used by companies, which is why the name of the contract is often preceded by the word corporate – Corporate Power Purchase Agreement (cPPA).