On 27 June 2016 the Polish President signed a new bill
introducing changes to the Act on Renewable Energy Sources
("Amending Act"). On 22 June 2016 the President signed a
new Act on investments in wind power plants ("Act on
Windfarms"). Both acts have been widely criticised by the
renewable energy sources ("RES") industry, and on reading
they suggest that the current Polish government is willing to
significantly reduce support for RES.
Changes to the auction system
Even though the main auction-based support scheme rules (set out
by us in another recent Legal Insights:
here) are maintained, the Amending Act significantly modifies the
auction system. Auctions will be divided into groups characterised
by the reference to, in particular, the efficiency of an
installation (instead of the type of technology). The Amending Act
introduces individual groups of RES installations for which the
auctions will be held separately. Moreover, for each of the groups
there will be separate auctions for installations with capacities
below and above 1MW. The aforementioned groups are as follows:
installations where the total
installed capacity level, regardless of the source of origin,
exceeds 3,504 MWh/MW per year;
installations using biodegradable
waste to generate electricity;
installations emitting not more than
100kg/MWh of CO2, with a total installed capacity level exceeding
3,504 MWh/MW per year;
auctions for members of an energy
auctions for members of an energy
installations using exclusively
agricultural biogas for electricity generation;
Additionally, certain aspects will be decided by way of secondary
law. This refers, among others, to:
the maximum volume and value of
electricity generated by RES installations, which may be sold in
auctions in 2016;
the order in which auctions will be
held in 2016;
the reference (maximum) price for
each type of technology will be determined separately not later
than 30 days before the first auction in 2016.
The Amending Act introduces a concept of "energy
clusters", which are civil law agreements on generating and
balancing the demand for, or trade in energy from RES, and other
sources or fuels within the distribution grid, with a voltage not
exceeding 110 kV. The agreements are concluded between civil law
entities such as natural and legal persons, entities without legal
personality, scientific units, research and development units or
local governmental units. An energy cluster covers either one
district (powiat) or five municipalities (gmina).
Separate auctions will be held intended exclusively for energy
Changes concerning larger RES installations and green
Large RES installations are defined in the Amending Act as
installations with a capacity equal to or exceeding 500 kW.
According to the Amending Act, a mandatory energy purchase by an
entity called an "obliged seller" is no longer applicable
for such installations. In the absence of an obligation to purchase
energy from RES, many large installations may suffer from a
reduction in their revenues and overall profitability.
The Amending Act fails to deal with the issue of the surplus of
green certificates. The price of one certificate is now lower than
PLN100/MWh, which, according to industry experts, does not allow
any installation to become profitable.
The Act on Windfarms
The Act on Windfarms is described by experts as an
"anti-windfarms act". The purpose of this act is to
determine places where wind power plants can be built and sets out
the minimum distance required between a wind power plant and
residential buildings, forests or national parks. The distance is
set at 10 times the height of a wind power plant (in practice
approximately between 1.5 and 2 km). This requirement seems very
strict. It will be a challenge to find plots of land which meet the
statutory distance requirement, in many cases it will be impossible
to build new or expand already existing plants. In addition, the
new definition of a wind power plant will lead to an increase in
the real estate tax imposed on the owners of the plants.
The Act on Windfarms has already been signed by the President
and will come into force 14 days after its publication (i.e. on 15
July 2016). The amended support scheme came into force on 1 July
2016. Some of the aspects of the new RES regime are still to be
determined by way of secondary legislation (including reference
prices which should be published before 31 August 2016). However,
it appears that the Polish government intends to reduce support for
the RES industry and will most likely treat biomass installations
preferentially as opposed to PVs and windfarms.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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