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Poland | Publication | August 2019
On 19 July 2019, the Polish Parliament adopted amendments to the Polish Act on Renewable Energy Sources of 20 February 2015 (the Polish RES Act), which will enter into force on 29 August 2019 (the Polish RES Amendment Act).
The Polish RES Amendment Act introduces the auction budgets for the upcoming 2019 RES auctions and provides for certain changes to an auction-based support scheme.
The Polish RES Amendment Act sets out the auction budgets (maximum generation volume and maximum value of generated electricity that can be sold in the RES auction) for all auction baskets1, including large-scale onshore wind farm installations and small-scale PV installations, as specified in the table below:
Generation technology and capacity | Maximum generation volume (MWh) | Maximum value of generated electricity (PLN) | Expected capacity | Reference price (MWh / PLN)2 |
Onshore wind installations >1 MW |
113,970 million | 32,5 billion3 | 2.5 GW | 285 |
PV installations ≤1 MW |
11,445 million4 | 4,2 billion | 750 MW | 385 |
The Polish RES Amendment Act does not specify possible dates for the RES auctions in 2019, but it is expected that the Polish energy market regulator (Prezes Urzędu Regulacji Energetyki, the URE President) as a body responsible for organising the RES auctions, will organise those auctions in November or December 2019.
The Polish RES Amendment Act introduces certain changes set out below which modify the auction-based support scheme for RES in Poland:
[No environmental permit required at pre-qualification stage] an environmental permit will no longer be required to be qualified by the URE President for the RES auction for new installations; this environmental permit is necessary to receive a building permit (it still has to be qualified by the URE President for the RES auction for new installations), but since this environmental permit is verified by a building authority that has issued a building permit it does not have to be verified (again) by the energy market regulator.
[One-off change of the auction offer after the auction] the winner of the RES auction can change its auction offer only once to modify (i) the allocation of electricity generation volumes between different years of the support period (a maximum 15 year period), (ii) the start date of (a maximum 15-year) support period and (iii) installed capacity (provided that such change of capacity does not result in the change of auction basket in a given generation technology, i.e. up to 1 MW and over 1 MW); the auction offer can be changed no later than within 30 calendar days before (i) the first sale of electricity and (ii) filing of the first application to cover the so-called negative balance5 to Zarządca Rozliczeń S.A. (the settlements manager); this option is also available to a winner of the RES auction which had taken place before the Polish RES Amendment Act was adopted; this change is conditional upon the consent of the European Commission as to its compliance with State Aid rules.
[Age of generation assets] the Polish RES Amendment Act has extended the acceptable age limit from 18 months to 24 months of the electricity generation assets for PV installations, from 24 months to 33 months for onshore wind installations and from 36 months to 42 months for the other generation assets; this change is conditional upon the consent of the European Commission as to its compliance with State Aid rules.
[Deadline for the first sale of electricity after auction] the period for the first sale of electricity to be done after winning a RES auction to maintain a contract for the difference awarded in such RES auction has been extended from 18 months to 24 months for PV installations, from 30 months to 33 months for onshore wind installations and from 36 months to 42 months for the other generation technologies; a 72-month period has been kept for offshore wind installations; these changes will be also applicable to winners of the past RES auctions.
[No (additional) penalty for auction winners that fail to start electricity generation on time] the Polish RES Amendment Act has cleared up doubts by setting forth that a penalty for generation of less than 85% of the volume of the electricity set out in the auction offer (verified in three-year periods) applies only if the electricity producer managed to sell electricity for the first time within the deadlines set for doing so (as referred to above); pursuant to the RES Act (before the Polish RES Amendment Act has entered into force) it was not clear if the electricity generator who missed a deadline for the first sale of electricity in the auction system (and was penalised by being excluded from taking part in further RES auctions for three years) is additionally penalised for a lower generation in contrast to the generation volume proposed in the auction offer.
[Extension of auction-based support scheme] the deadline for the auction-based scheme has been extended from 31 December 2035 to 30 June 2039; the maximum support period will still be 15 years from the first sale of electricity; this change is conditional upon the consent of the European Commission as to its compliance with State Aid rules.
[No power exchange sale obligation for installation generating electricity before the auction] the RES installations participating in the RES auction for new installations that have started generating electricity before the RES auction6 will no longer be required to sell electricity generated before the auction at power exchange.
[Extension of validity of building permits for onshore wind farms not compliant with the so-called Distance Act] the Polish RES Amendment Act has extended the dates of validity of building permits by an additional three years for wind farms which could not be constructed due to non-compliance with a 10H rule introduced by the so-called Distance Act (i.e. Act of 20 May 2016 on Investments in Wind Power Plants) whereby, a wind farm cannot be constructed at a distance from a residential building lower than ten times the height of that wind farm; as a result of this proposed amendment, the building permits which were not put in use by the investors to start the construction of wind farms due to said non-compliance with a 10H rule, can, as an exception, be put in use to authorise the construction of wind farms on such sites, provided that the RES installation obtains an occupancy permit (pozwolenie na użytkowanie), following the completion of the construction phase by 16 July 2024 (and no longer by 16 July 2021 as had been the case since 16 July 2018 when the previous amendment to the RES Act made the change); if the occupancy permit is not obtained by 16 July 2024, the building permit expires.
[Extension of grid connection deadline] the deadline for the first delivery of electricity, specified in grid connection agreements entered into before 4 May 2015 (which has to be met so that the grid operator does not terminate such a grid connection agreement), if on a date falling before 30 June 2021, shall be extended to 30 June 2021 by way of an application of the RES installation operator filed to the grid operator.
The Polish RES Amendment Act does not include any changes whereby the amount of the so-called “positive balance” at the end of a 15 year support period to be returned to Zarządca Rozliczeń S.A. (the settlements manager) in six equal monthly instalments is supposed to be limited to the amount of “negative balance” the energy generator has received from this settlements manager; this change was proposed in a bill of the Polish RES Amendment Act, but ultimately not included in the adopted Act.
The Polish RES Amendment Act sets forth that green certificates must be redeemed at the level of 19.50% in 2020.
basket 1 - biogas installations and biomass sewage treatment plants;
basket 2 - hydro installations, geothermal installations, bio-liquid fuel installations and offshore wind farms;
basket 3 - agricultural biogas installations;
basket 4 - PV installations and onshore wind installations;
basket 5 - hybrid RES Installations;
each of these baskets are additionally subdivided into the sub-baskets for (i) the existing installations (i.e. operating before 1 July 2016) and (ii) the new installations (i.e. operating as a result of the auctions); for the above baskets separate auctions are organised for the RES installations with the total capacity (i) lower than or equal to 1 MW and (ii) higher than 1 MW
maximum price in PLN for MWh which can be offered in RES auction pursuant to Decree of the Ministry of Energy of 15 May 2019
in 2018 RES auction: (i) generation volume amounted to 45 million MWh and (ii) value of generated electricity to PLN 15.75 billion
in 2018 RES auction generation volume amounted to 16 million MWh and it has not been fully used
negative balance is a monthly payment equivalent to the difference between the auction price offered by that project and the market electricity price, subject to the maximum volume bid in the auction
as a rule, the electricity generator shall sell electricity for the first time after the RES auction
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