Poland allocated 3.4 gigawatts (GW) of capacity in its first competitive offshore wind auction, the country's energy regulator URE said on Thursday, a boost for the renewable energy sector after setbacks in neighbouring markets.

The auction was seen as a test of investor confidence in offshore wind, coming after U.S. President Donald Trump's opposition to renewables effectively froze the U.S. market and recent auctions in Denmark, Germany, and the Netherlands failed to draw bidders.

Poland awarded 25-year contracts at a price range of 476.88 zlotys ($133.09) and 492.32 zlotys per megawatt hour, URE said, just slightly below the maximum levels of 485.71-512.32 zloty per megawatt hour set by the regulator.

State-controlled utility PGE secured a contract for 975 MW at 489 zlotys per megawatt hour, while refiner Orlen won a contract for 900 MW at a price of 476.88 zlotys per megawatt hour.

A consortium of Polenergia and Norway's Equinor was also awarded a contract for 1.56 GW at a price of 492.32 zlotys per megawatt hour.

For Poland, offshore wind is vital for bridging a looming energy gap, with coal power being phased out, nuclear energy years away and its proximity to Russia heightening the country's emphasis on energy independence.

Under the terms of the auction, support is offered to winners in the form of a contract-for-difference (CfD). The scheme ensures developers a guaranteed electricity price, with costs or savings passed onto consumers based on wholesale price fluctuations.

The overall amount of electricity covered by the contracts awarded at the auction is over 330 terawatt-hours (TWH) URE said, nearly double Poland's consumption last year.

Poland plans to hold similar auctions every two years until 2031. The projects that won the auction have a seven-year deadline to begin delivering electricity to the network, the regulator said.

($1 = 3.5832 zlotys)

(Reuters)