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The bill on renewable energy sources submitted to consultations

November 12, 2013 the Ministry of Economy submitted to inter-ministerial and social consultations the bill on renewable energy sources. Comments to the bill may be submitted among others through the Internet consultation system until 26 November 2013. The Ministry of Economy is expecting in particularly the opinions from the power industry. It should be emphasized that ​​the bill on renewable energy sources has just been published and causes already a number of discussions, what means that the final shape of the bill may be still changed.

The bill submitted to consultations amends revolutionary changes in the existing mechanism of support for investments in the scope of renewable energy. The most important change is the replacement of green certificates system with the auction system, which operates in some EU countries, such as Italy, the Netherlands.

It should be emphasized that the auction system will be a completely new regulation in the area of proposed instruments of support for production of electricity from renewable sources. The support system functioning currently in Poland is based on the subsidizing of renewable energy production by green certificates that can be sold on the stock exchange. The amount obtained from the stock exchange is the support. The aim of the bill on renewable energy sources is to resign from subsidizing the current production by certificates, which stock exchange price is variable, in favour of providing investor with guarantee that for 15 years he will sell the produced energy at the previously determined, unchanged price.

The bill on renewable energy sources introduces the new support mechanism of auctions, while for existing renewable energy sources the system of green certificates will be maintained. The owners of operating renewable energy installations will be able to choose between the green certificates or the auction system. It must be emphasized that the auction system will be obligatorily introduced for the new and improved installations. In order to participate in auction the new renewable energy installations will have to obtain a certificate of admission to the auction, preceded by a formal opinion carried out by the President of the Energy Regulatory Authority. This obligation will not apply to existing renewable energy installations that have the right to choose between the existing system and auction system.

 

The auctions will be conducted separately for existing renewable installations, and for those just planned, as well as for installations below and above 1 MW. The amount of produced energy will be the subject of the auction and the basic criterion for the selection of projects will be the price for one MWh of generated electric energy. According to the bill the reference price is the maximum price for which the electricity from renewable sources produced by investors after the auction can be purchased. The reference price will be calculated by the Energy Regulatory Office, separately for each technology of renewable energy sources.  The investor will win the auction, if he proposes the lowest price, so the offers with the price above the reference price will be automatically rejected. The investor who wins the auction, will be provided with the guaranteed purchasing price of energy, that will not be changed for 15 years. The auctions will be carried out at least once a year by the President of the Energy Regulatory Office, in electronic form.

What is important, according to the assumptions of the said bill the total support period for the existing investments of renewable energy sources as well as for these planned will be a maximum of 15 years from the date of first electric energy generation, for which a certificate of origin has been issued but not longer than by 2035.

Therefore, the new bill provides the possibility to move the installations from the certificates system into the auction system in case of renewable energy sources installations, which have already been implemented, as well as those that will start to operate in green certificates system. It should be pointed out that the above solution does not guarantee that the installation will win the auction. Thus, the investor who fails to win the auction will have to remain in the old system, which in line with the assumptions proposed by the Ministry will expire in 2035. As far as the investments that will be executed after the entry into force of the new system, the condition for receiving the support will be to win the auction, otherwise this investment will have to rely solely on its own financial resources.

However, it is important that the auction is open to the investments that have not been completed yet, but already possessing specific permissions and which will pass the pre-qualification positively. Thus, the result of the auction can determine the decision on the continuation or discontinuation of investment.

According to experts from the energy sector, the adoption of completely new rules concerning the system of support for renewable energy sources installations will certainly require a long-term effort, and only its operation in practice can show the strengths and weaknesses of the system. The postulates proposed to the bill presented by the Ministry regard in particular the selection criteria in the auction. According to the persons proposing those postulates the selection criteria should concern the power of the installation, rather than the declared production volume of energy. Additionally, the reference price should be known several years in advance.

The energy environment interested in investing in renewable energy sources assumes that the full implementation of the auction system will take place in 2017.

The Ministry of Economy assumes that the bill on renewable energy sources will come into force at the beginning of 2015.

 

Contact: Dr Agnieszka Łuszpak-Zając