Informacje

DMS
  April 14, 2015

 
 

RES News Flash

Attending PSEW Conference tomorrow we look forward to seeing you there and will be glad to discuss the news as below.
 

Draft of the Minister of Economy’s regulation on maximum prices of renewable energy

On April 13, 2015 the Ministry of Economy published drafts of the regulations regarding the maximum volume and maximum total price for the renewable energy produced in RES installations as defined in the new RES Act of February 20, 2015 to be purchased in the auction system in 2016. Please note that the figures include the maximum duration of the contracts (15 years of production) entered into as a result of participating in the auction systems in 2016.

According to the drafts, the maximum volume and price for the power generated in the RES installations are as follows:

  1. The total amount of power purchased in the auction system generated by installations which will be producing power on January 1, 2016 is proposed to be set at 4,579,491 MWh;
  2. Within the limit mentioned in sec. 1, the maximum amount of power generated by such installations with efficiency below 4,000 MWh/installed MW/year is 2,289,745 MWh;
  3. The maximum price for the power mentioned in sec. 1 is proposed to be set at PLN 1,744,694,319;
  4. The total amount of power purchased in the auction system generated by installations which will start producing power after January 1, 2016 is proposed to be set at 50,449,950 MWh;
  5. Within the limit mentioned in sec. 4, the maximum amount of power generated by such installations with efficiency below 4,000 MWh/installed MW/year is to be 30,907,350 MWh;
  6. The maximum price for the power mentioned in sec. 4 is proposed to be set at PLN 18,201,331,716;
  7. Within the limits mentioned in secs. 4-6 above in the sector of RES installations having installed capacity below or equal to 1 MW which will become operational after January 1, 2016, the total amount of power purchased in the auction system is proposed to be set at 12,612,488 MWh and the total price for the power amounts to PLN 5,927,933,456.

If the draft is adopted as proposed, the above figures allow us to also calculate the maximum amount of power generated by installations (which will start operations after January 1, 2016) with installed capacity above 1 MW to be purchased in the auction system in 2016, as the amount of power referred to in sec. 4 subtracted by the amount referred to in sec. 7:

50,449,950 MWh – 12,612,488 MWh = 37,837,462 MWh

as well as the total price for such power:

PLN 18,201,331,716 – PLN 5,927,933,456 = PLN 12,273,398,260.

Moreover, the mean prices of RES energy calculated from the above mentioned figures amount to:

  • for existing installations: PLN 1,744,694,319 ÷ 4,579,491 MWh: PLN 380.98 / MWh;
  • for new installations (mean values for the whole market): PLN 18,201,331,716 ÷ 50,449,950 MWh = PLN 360.78 / MWh;
  • for new installations with installed capacity below or equal to 1 MW: PLN 5,927,933,456 ÷ 12,612,488 MWh = PLN 470.00 / MWh;
  • for new installations of installed capacity above 1 MW: PLN 12,273,398,260 ÷ 37,837,462 MWh = PLN 324.37 / MWh.

Please moreover note that in 2016 the Ministry does not plan for additional auctions for modernized installations because of lack of the necessary funds due to introduction of the “prosumer” tariffs in the final wording of the RES Act.

According to unofficial information by the Ministry’s clerks, the above prognoses of mean prices will not be a basis for setting the maximum “reference prices” referred in art. 77 of the RES Act (i.e., the maximum prices set for producers operating different kinds of RES installations), which will be based on LCOE estimates. The Ministry allows for the situation, in which the allocated price amounts will be depleted without purchasing the maximum amount of energy and vice-versa. Moreover, the maximum reference price should also include the fact that it is a basis for calculating the total amount of public aid granted to the installation, set in art. 39 of the RES Act. On the other hand, the maximum price should also include the fact that the prices for 1 MWh are indexed yearly based on the CPI index announced by the President of the Main Statistical Office.

The drafts are available on the website of the Government Legislation Center (RCL) under: http://legislacja.rcl.gov.pl/projekt/12271353/katalog/12283951#12283951 and http://legislacja.rcl.gov.pl/projekt/12271354/katalog/12284001#12284001.

We understand that there is much to discuss and we will be taking part in these discussions.

In the meantime we hope the above proves informative. Please let us know if you have any questions.

 
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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