Informacje

DMS
  October 8, 2012

  BREAKING NEWS
 

RES Act – 2.0.1 (meaning 3.0)

The final draft of the new RES Act is known, but some matters have been transferred to an introductory law which has not been published yet. Last Friday the Ministry of the Economy published the third official draft. This draft has been already sent to the Council of Ministers, which is supposed to deal with the so-called three-pack [RES Act, Gas Law and Energy Law] by Wednesday this week. Still the Ministry of the Economy is convinced that the three-pack should come into force (at least partly) by the beginning of the next year, although a notification to the EU is necessary.


The published draft of the RES Act generally sticks to the solutions already known, although there are again some important changes.


  Less for PV
 

The RES Act no longer introduces the correction coefficients directly, which will be introduced by the law implementing the three-pack for the first 5Y-period. Although the introductory law is not published yet, it is remarkable that the calculation basis for PV mentioned in the evaluation of the implication of the RES Act provides new CAPEX and OPEX values, which dropped significantly. According to the RES Act draft dated 26 July, the CAPEX for PV with more than 100 kW up to 1 MW installed capacity amounted to 7,200 zl/kW and the OPEX amounted to 75zl/kW, not differentiating between rooftop and other installations. The recent evaluation of the implication of the RES Act mentions a CAPEX amounting to 6,300 zl/kW and an OPEX amounting to 50.4 zl/kW for rooftop installations while providing 6,100 zl/kW CAPEX and 50.4 zl/kW for other installations. For installations from 1 to 10 MW installed capacity, CAPEX amounting to 6,000 zl/kW and an OPEX amounting to 35 zl/kW is mentioned. PV installations of more than 10 MW installed capacity will no longer receive green certificates (10 MW installed power counts as one installation if connected to the same grid connection point – PL: “punkt przylaczeniowy”). According to evaluation of the implication of the RES Act the new correction coefficient amounts to 2.85 for Rooftop up to 1 MW capacity, 2.75 for other installations up to 1 MW capacity and 2.45 for installations from 1 to 10 MW installed capacity (approx. 21 Eurocent/kWh).

The calculation basis for all other important RES mentioned in the evaluation of the implication of the RES Act did not change significantly, as well as the correction coefficients.


  Transition period for existing RES installations remains
 

According to the most recent RES draft, for RES units up to 15 years the recent correction-coefficient amounting to 1.0 was to be granted, but not from the moment the new RES act will be in place, but from the moment the given unit has been licensed under the existing royalty scheme. But the newest draft of the RES Act no longer introduces this solution directly, which will be introduced according to the evaluation of the implication of the RES Act, by the law implementing the three-pack.

The certificate system will be generally in place for
1) 5 years, but not longer than until 2020 – for co-firing installations,
2) 15 years, but no longer than until 2027 – for micro (up to 40 kW) and small (up to 200 kW) installations,
3) 15 years, but no longer than until 2035 – for all other RES.

The carving out of co-firing still survived, which is of major importance for the stabilization of the system, thus avoiding oversupply.


  Increasing group of purchasers
 

Additionally, under the new RES Act draft, industrial consumers will have an obligation to purchase certificates, which will increase the number of potential purchasers (see DMS newsletter 3/10/2012), as well as final consumers being member of the stock exchanges (meaning “TGE” and “GPW”).


  Headroom solution again softer
 

The “headroom solution” in case of oversupply of certificates will be softened again. If, over a period of two consecutive quarters, the average price of certificates on the stock exchange amounts to less than 75% of the compensation fee, the Ministry of the Economy after achieving a report from the stock exchange may increase the percentage obligation to purchase green energy to an appropriate value, if necessary. This solution is important for debt-sizing by commercial banks. According to the previous draft, the Ministry was still obliged to increase the percentage obligation.


  Clause 41.3 turns into clause 61.2 and is less harmful to merchant trading
 

For micro installations and small installations, the corresponding regulation is Clause 41.1. Clause 61 Sec. 2 provides that if the sale of electrical energy generated from renewable energy sources at a renewable energy source installation connected to the distribution or transmission grid situated within the area of operation of such supplier of last resort, as offered by the power company, shall be effected at a price higher than 105% of the purchase price, as set out in Art. 58, the confirmation of generating such electric energy in the form of a certificate of origin or a certificate of origin of biogas shall not be granted. In order to obtain confirmation of generating RES energy in the form of a certificate of origin, the producer of RES energy may sell such energy to anyone (i.e. to the supplier of last resort or to another entity) but exclusively at the price not exceeding 105% of the price set out in Clause 58 of the draft Act. Otherwise, (in the case of sale at a different price) it shall not be granted a certificate of origin. Although this regulation is anything besides free market price, it allows at least to sell electric energy to other market participants as to the supplier of last resort, and to have a certain trading range. It is confusing that with the application for achieving green certificates the power producer has to assure that he did not sell electrical energy for a price higher than the price mentioned in Clause 58, which seems to be a logical mistake. Finally, according to previous wording, it seems that this regulation can still be circumvented by selling to a subsidiary company that resells at a higher price.


  RES Act implements an allocation system
 

The RES Act implements an allocation system similar to the German “EEG-Umlage”, which has to be paid by final consumers. The allocation system carves out industrial consumers from paying the allocation fee comparable to Germany. The allocation fee (so called RES fee/”oplata OZE”) amounts to 0.6 PLN (0.15 Eurocent) per MWh, whereas the German allocation fee currently amounts to 3.59 Eurocent per kWh, a significant higher amount. The fee has to be paid by the distribution grid operator to the transmission grid operator and is part of the tariff. The allocation system is implemented until 2028.


  Other changes
 

According to a new definition, RES installations include energy storage facilities connected to the renewable energy production unit. This change has been already predicted in the new draft of the Energy law.

The correction coefficient for the test period (PL: “rozruch technologiczny”) may differ from the correction coefficient for the period after receipt of an operational permit, as a renewable energy producer has the right to receive green certificates for a period of up to 90 days before licensing – compared to 60 days according to the recent legislation. For the 15Y period, of importance, the correction coefficient is valid at the moment of receiving an operational permit.

Repowering is promoted slightly differently compared with the previous draft. A repowered RES installation receives green certificates only in case of increased power production, and just for that part increasing the previous power production.


 

For more information please contact:

 

       

dr Christian Schnell
coordination/transactions/
venture agreements
cschnell@dms.net.pl
 
C. David DeBenedetti J.D.
project finance
ddebenedetti@dms.net.pl
 
Joanna Świostek
project development/planning
and building law/commercial
jswiostek@dms.net.pl




DeBenedetti Majewski Szcześniak has been chosen
by Corporate Intl Magazine 2012 as the:

“Renewable Energy Law, Firm of the Year in Poland”

“Project Finance Law, Firm of the Year in Poland”

“Investment Funds Law, Firm of the Year in Poland”

 
 

 

 
 

The aim of this Newsletter is to provide a summary of the subject matter. No part of this Newsletter constitutes legal advice or can replace expert legal advice in specific circumstances. If you would like any further information, contact us.

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