Poland has agreed to offer energy price support to offshore wind projects being developed by PGE, Denmark’s Orsted and Germany’s RWE as the coal-reliant country seeks cleaner energy sources.

Warsaw adopted a long-awaited offshore wind law earlier this year and aims to develop 8 to 11 gigawatts (GW) of offshore wind capacity by 2040.

Under the legislation, the regulator by the end of June aims to approve up to 5.9 GW of projects for contracts for difference (CfD), which will guarantee a stable revenue stream for operators.

After June, subsidies for renewable power sources can only be granted via an auction process, according to a European Union directive.

On April 7, Poland’s energy regulator approved two offshore wind farm projects developed jointly by PGE and Orsted totaling 2.5 GW in capacity which will be able to supply electricity for 4 million households, as well as a 350 MW project by RWE.

“Granting the right to a contract for difference for Baltica 2 and 3 is a milestone for Polish offshore wind energy,” Orsted Offshore’s Rasmus Errboe said in a statement.

A price cap for electricity generated by offshore wind farms, which would be the basis for calculating and covering investors’ potential losses, has been set at 319.60 złotys/MWh. “RWE fully supports the proposal that a uniform, reasonable rate of return level will be applied to all eligible projects,” the German company said commenting on the price.

“RWE is in favor of CfD, which have become standard in Europe,” it also said, adding that in Poland “the mechanism results in lower financing costs, which in turn leads to lower electricity costs for consumers. So a lot of advantages within one mechanism.”

The CfD will also require approval by the European Commission.

Offshore