• Poland: New Act on Renewable Energy Sources
  • April 14, 2015
  • Law Firm: Dentons Canada LLP - Toronto Office
  • The New RES Act will provide continuing support to most existing installations (i.e. facilities which initiated generation of renewable energy by or before December 31, 2015).

    On March 11, 2015 the President of Poland signed the new Act on renewable energy sources adopted by the Parliament on February 20, 2015 (New RES Act). The New RES Act awaits publication in the Official Journal of Laws (Dziennik Ustaw), with general provisions entering in force 30 days following the publication, while the new support scheme based on auctions will enter in force on January 1, 2016.

    The New RES Act will provide continuing support to most existing installations (i.e. facilities which initiated generation of renewable energy by or before December 31, 2015). Future investments will compete for support based on a type of contract-for-difference (CfD) granted through auctions organised by the President of the Energy Regulatory Office (ERO). Most existing installations will be eligible to change the support instrument from certificates of origin to the auction based one. A feed-in tariff system for micro installations of up to 10 kW was introduced at the last stage of parliamentary works, too.

    Key milestones and changes:
    • support limited to 15 years from initiating generation (both existing and new installations);
    • support limited for part of hydro, biomass and biomass co-firing (both existing and new installations);
    • separate auctions for existing and new installations, separate auction pools for installations up to and over 1 MW of installed capacity;
    • bidders will compete in auctions up to a budget and volume of electricity offered by the state annually;
    • a reference price based on technology and installed capacity will put a cap to auction bids;
    • first budget and volume for the 2016 auction to be set by May 31, 2015;
    • first auction pool for installations up to 1 MW to be set by June 30, 2015;
    • first reference prices to be determined by December 31, 2015;
    • first auction date to be announced by March 30, 2016.
    Most existing installations will continue to receive support through certificates of origin just as they do today. However certain limits will be introduced both on the supply and demand side of the certificate trading.

    On the supply side support for hydro-generation will be limited to installations of up to 5 MW of installed power. Support for all biomass co-firing installations will be capped by volume to the equivalent of average biomass generated electricity in the years 2011-2013. Further non-qualified biomass co-firing installations will receive only half the number of certificates per each MWh of eligible renewable electricity. This reduction is set until December 31, 2020 and may change thereafter by the Council of Ministers.

    On the demand side, the threshold of 14 percent and 15 percent of annual electricity consumption will remain in place for 2015 and 2016 respectively. From 2017, the threshold will be set to 20 percent, however that may be reduced by the Minister of Economy for one or more years, based on several conditions related to the development of the RES market. The substitution fee will be set to a constant 300.03 PLN/MWh (currently approx. 72 €/MWh), however only purchasing and redeeming of certificates of origin will be recognized by the President of ERO as long as the average market price of certificates remains below 75 percent of that substitution fee.

    Most of existing installations will have the option to switch the support instrument to the auction awarded CfD. Hydro-generation units over 5 MW, non-qualified biomass co-firing installations and biomass installations exceeding 50 MW of electrical power (or 150 MW of CHP heat power) will be exempt from this alternative. Dedicated auctions will be organised for existing installations—the RES Act does not introduce a direct competition among existing installations and new investments.

    Auctions will form the main support instrument for installations over 10 kW of installed capacity. In auctions the state will offer support up to a specific volume and value of renewable electricity to be generated within the 15-year support limit. These volume- and value-based budgets will be published for each auction year by the Council of Ministers. The first budget for the 2016 auction is expected by June 30, 2015.