Informacje

DMS
  April 16, 2012

  Lack of consultation re reclassified sites makes the questioned Master Plans still valid
 

However, apparently reacting to pressure of protests against wind farms see: www.stopwiatrakom.eu - the Ministry of Agriculture has recently changed its approach and instructed Voivodes to object to already issued master plans not approved by the Minister. The new interpretation provides that the whole area to be reclassified under a master plan, namely all sites designated for wind farm operation, e.g. towers, crane parking areas and access roads, has to be taken into account in calculation of the legal threshold. We discussed this matter already in our newsletter issued February 27, 2012.

On April 12, 2012 the Supreme Administrative Court in Poland (“NSA”) issued a judgement concerning a master plan necessary for the implementation of a wind farm located in the Wielkopolskie voivodship. As a result of the examination of the Supreme Court appeal, the NSA has overruled the judgment of the Voivodship Administrative Court in Poznań (“WSA”) which declared the said plan invalid due to above mentioned reasons and at the same time dismissed the complaint lodged against the master plan by the Voivode. Thus, the master plan remained valid even though there was no consultation with the Minister. The proceedings concerned the disputable issue of the lack of consent of the Minister for the assignment of agricultural areas for non-agricultural purposes. Since Polish law does not provide for a deadline to challenge master plans by Voivodes in administrative courts, even currently binding master plans which were not approved, were (before this decision) at risk. Previous judgements of administrative courts in similar cases were not consistent and it seems that a more rigorous interpretation is recently prevailing.

In the above case, the Judges however concluded that it is not required to add each single area designated for a WTG in a master plan to calculate the reclassified area which would require the Minister’s consent. It was justified by the fact that the Act on Protection of Agricultural and Forest Land of February 3, 1995 refers to “closed area of land”. Thus, the judges decided that those single areas remain dispersed and they should not be taken into consideration together in calculations made for the purpose of excluding land from agricultural use. 


  Securing title to land for grid infrastructure at an early stage of project development
 

However, the establishment of a transmission easement on each minor plot seems unnecessary and often cannot be implemented at an early stage of project development. Therefore, our suggestion is to enter into a written land lease agreement with notarially certified signatures. This land lease agreement should include covenants of the landlord, whereby a transmission easement agreement and/or annex to the land lease agreement that will adjust the scope of the contract for a wind farm to meet the formal and legal documentation approved by competent authorities will be concluded at a later stage. Based on the foregoing, it would be possible to enter into a notarized transmission easement agreement at a later stage of development of the project. The obligation to conclude transmission easement agreement should be secured at least with contractual penalties.

Although from a legal point of view, the covenant of a landlord to establish such relevant easement referred to in the land lease agreement at a very early stage of the project development is weak (it may not be enforced in Court), it secures financial interests of a developer, giving him at the same time more flexibility, in particular in terms of further commercial actions. 


  Offshore Wind Investments hampered by Ministry of Environment
 

On the other hand, there is still enough time to undertake proper research until the first offshore wind farms may be built. While in certain ways wind parks and oil and gas production operations may get in each other’s way, there is much potential synergy in the various interested parties working together. The creation of an offshore electricity network will offer opportunities to the oil and gas industry, for instance by the generation of electricity with gas from fields, the pressure of which is now so low that it is no longer profitable to compress and transport it to land. The electricity generated would then simply be delivered to the North Sea electricity grid. If there is no wind, then residual gas could come to the rescue. Finally, the possibility of extracting and transporting gas from low pressure fields with the help of electrical compressors is also on the agenda. The necessary electricity would be supplied by wind

farms. Thanks to offshore wind energy, offshore gas installations could produce gas in an optimally environmentally friendly manner. 


  Q1 2012 clean energy investment squeezed by policy uncertainty
 

“The weak Q1 2012 number reflects the destabilising uncertainty over future clean energy support in both the European Union driven by the financial crisis and the US driven by the expiry of stimulus programmes and the electoral cycle. There is no sign of a rapid turnaround in either of these regions in the next 12 months. Clean energy technologies, particularly solar photovoltaics and onshore wind, continue to fall in price and approach competitiveness with fossil-fuel power but politicians in many countries appear to be ducking the decisions that would ensure that the sector maintains its growth trajectory. We are seeing growth in some of the non-core markets around the world, but they will have a tough job replacing weakening demand in the developed world.”

In the US, the key support mechanism for wind the Production Tax Credit is due to expire at the end of this year unless Congress agrees to extend it; while in Europe, governments in key countries such as Spain, Italy, Germany, Poland and the UK have announced cuts in incentives for renewable power projects, in some cases leaving investors guessing about their likely future returns. Looking at the different categories of investment in Q1, asset finance of $24.2bn was 30% down from the fourth quarter and 13% below that in the first quarter of 2011.

The largest projects financed in Europe in Q1 in the face of a difficult market for bank lending following last autumn’s euro area crisis – were the 150MW Monsson Pantelina wind farm in Romania at $317m, and the 60.4MW SunEdison Karadzhalovo solar PV plant in Bulgaria at $248m.

Venture capital and private equity investment held up well at $1.9bn, just 2% below that in the fourth quarter of last year and 6% higher than the first quarter of 2011. The biggest deals were $130m in equity raised by US electric vehicle company Fisker Automotive, a $102.6m injection into UK-based biomass-to-power firm Tamar Energy, and an $81m fund-raise by US PV installer SolarCity.

Public market investment in clean energy of $601m was down 12% from the fourth quarter, and 87% from the first quarter of 2011 a plunge that was not surprising, given the poor performance of sector shares in the last year. The WilderHill New Energy Global Innovation Index, or NEX, which tracks the movements of 97 clean energy shares worldwide, fell 40% in 2011 and clawed back just 7% in the first quarter of 2012 as world stock markets rebounded. The largest two public market deals in clean energy in Q1 were both initial public offerings by US companies in the biofuel sector – Ceres, a developer of genetically-modified energy crops, raised $74.8m, and Renewable Energy Group, a maker of biodiesel, raised $68.6m. Liebreich said: “The outlook for investment in the remainder of the year remains difficult. The rapidly improving cost-competitiveness of renewable energy technologies is stimulating activity, particularly in developing countries. However it is becoming harder to see the sector worldwide beating last year’s record, unless the storm-clouds lift in Europe and US Congress stops bickering and sends some clear signals about the importance of new energy technologies. Meanwhile, continuing improvements in the sector’s economics mean that companies which survive these next few years, whether on the industry’s supply or demand side, will be extremely well positioned for the next growth phase.” In 2011, overall clean energy investment, including the “financial new investment” measure calculated quarterly but also annually-calculated totals for government and corporate research and development and small-scale projects such as rooftop solar, was a record $263bn. This compares to 2010’s total of $247bn and just $54bn back in 2004. A final figure for 2011 will be published by mid-year as part of the UN Global Trends in Renewable Investment report, which will include information on late-reporting transactions from 2011.

Source: Bloomberg New Energy Finance 


  Next issue coming May 7, 2012 due to May Holidays
 

 

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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