Informacje

DMS
  January 20, 2015

 
 

Dear Renewable Energy Newsletter Readers,

Given Polish Parliament’s approval of the RES Act, we are pleased to announce that the DMS Renewable Energy Newsletter will be issued anew! We intend to change the previous form into two types of issues: “RES News Flashes” like this one, will be issued when news crucial to the renewable energy market appears and a “Renewable Energy Magazine” with detailed analyses and comments.

We hope you enjoy your reading!


  RES News Flash: RES Act adopted by the Polish Sejm
 

On Friday, January 16, 2015 Polish Sejm finally passed the Renewable Energy Sources Act. After a final report was presented by the Parliamentary commission regarding amendments to the draft, the MPs accepted significant changes to the act, including some of the motions of minority parties. 

The MPs also rejected amendments regarding clarifications on the definition of an installation, which clarifications would allow the President of URE to disregard certain offers filed within auction procedures if the offers indicate that the power is generated by installations connected at the same grid connection point, notwithstanding differences in ownership. Taking into account that, according to the adopted definition of “RES installation” in case of single generators below 1 MW per WTG it still might be possible to restructure larger installations into smaller ones with up to 1 MW of total installed power which would allow to enter into the “below 1 MW” segment auctions. Practice will however show if such restructuring will be possible.

The MPs rejected the amendments allowing for conducting separate auctions for different types of RES installations. This means that there will be only two types of auctions: for installations below 1 MW and for installations of installed power exceeding 1 MW. The splitting of “below 1 MW category” into installations below 300 kW and 300 kW – 1 MW was also rejected.

Supplementary auctions were introduced in case the power produced by installations up to 1 MW purchased in the auction does not fulfill the required minimum stipulated by regulation of the Ministry of Economy. In these auctions, installations of installed power between 1 MW and 2 MW may take part and the reference (maximum) price shall be calculated based on the prices for power offered by participants in the primary auction below 1 MW weighted by the amounts of power to be delivered thereby.

A crucial amendment which was adopted in favor of the wind farms operators is the introduction of a possibility to avoid paying penalties for not delivering the declared average amount of power in three years time spans. The error margin is set to 15%, so the penalties shall be payable only if the wind farm produces less than 85% of power declared in the auction offer calculated in three years’ time spans.

Moreover, the MPs agreed to introduce further limitations regarding possibilities to subsidize co firing installations. These installations, to procure subsidies (auctions or “green certificates”) may not use high quality wood or grain. The limitation of 50 MW installed power in case of biomass and biogas has been upheld.

One of the most significant amendments introduces the system of feed-in tariffs for the smallest micro-installations (“prosumer amendment”). These were divided into two categories: up to 3 kW of installed power and up to 10 kW of installed power:
- Hydro-energy installations, inland wind turbines, photovoltaic panels up to 3 kW of installed power: PLN 0.75 per 1 kWh;
- Installations of installed power more than 3 kW up to 10 kW:
   o Agricultural bio-gas installations: PLN 0.70 per 1 kWh;
   o Land-fill biogas installations: PLN 0.55 per 1 kWh;
   o Sewage treatment biogas installations: PLN 0.45 per 1 kWh;
   o Hydro-energy installations: PLN 0.65 per 1 kWh;
   o Inland wind turbines: PLN 0.65 per 1 kWh;
   o photovoltaic panels: PLN 0,65 per 1 kWh.

The tariffs shall be paid for 15 years after connecting the source to the grid.

Limitations of the feed-in tariff system have been imposed, though. First of all, the feed-in tariffs are introduced only for prosumers (by definition included in the act – natural persons not conducting business activity). The resellers shall be obligated to purchase the excessive power not used by the prosumers from the installation. Second of all, the fixed tariffs shall be in force as long as the total installed power of installations up to 3 kW nationwide does not exceed 300 MW / 500 MW of total installed power of installations from 3 kW to 10 kW nationwide or until the price is regulated by the Minister of Economy.

It is worth noticing that the current wording of the act does not provide a price mechanism in the situation in which the total amount of installed power in such small installations exceeds 300 MW/500 MW nationwide and the prices are not provided by the regulation of the Minister. It would seem that the tariffs would not apply after exceeding the nationwide amount of installed power to any of the prosumers; however if there is no regulation – there will be no price set at all. At the same time the reseller is still obligated to purchase the power even if the total power installed exceeds the aforementioned thresholds.

Such provisions may also make financial planning of the investments in micro-installations by prosumers difficult.

At the same time, the MPs rejected draft amendments allowing other entities (such as Polish housing associations) to become prosumers. The regulation states that only a natural person not conducting any business activity may become a prosumer, which regulation may be proven unconstitutional.

Moreover an amendment regarding the direct resale of the energy by prosumers to other consumers was also rejected.

Currently the act shall be reviewed and addressed by the Senate. DeBenedetti Majewski Szcześniak aims to provide a complete overview of the new legislation after the Senate completes its part of the legislative process.

 
Michał Szpakowski
energy law
mszpakowski@dms.net.pl

 

Awards and recommendations 

Legal 500 2013: energy and natural resources

IFLR 2012, 2013 and 2014: project finance

Corporate Intl Magazine 2012 and 2013: renewable energy and project finance

 
 

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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