Polish RES support schemes
The main support schemes applicable to renewable energy sources are regulated in Poland in the 2015 RES Law and supplemented by the secondary legislation issued thereupon.
Background
By 1 July 2016, the incentive scheme addressed to the RES installations was primarily regulated in the Act of 10 April 1997 – the Energy Law and the transitional provisions of the Act of 20 February 2015 on renewable energy sources (hereinafter referred to as, respectively, “1997 Energy Law” and “2015 RES Law”) and it was based on tradable certificates of originwhereby renewable energy producers received:
- price for electricity sold at competitive market (with the right of the renewable energy producer to sell the entire generation to the last resort supplier at a price equal to the average electricity price in the preceding year which is currently equal to PLN 169.99/MWh – approx. EUR 39,62/MWh), as well as
- price for tradable certificates of origin purchased in particular by suppliers selling electricity to final consumers.
The foregoing incentive scheme operates so that market price for certificates may not exceed in practice the so-called “substitute fee” (“buy-out” price) which is an alternative method of fulfillment of the obligation to obtain and redeem certificates of origin. Such substitute fee is currently equal to PLN 300.03/MWh (approx. EUR 69,989/MWh) which operates as a cap for the market price of certificates. However, the average-weighted market price for certificates in November 2016 was equal to PLN 42.71/MWh.
Under the 2015 RES Law, as adopted in February 2015 and amended in December 2015 and June 2016, the abovementioned certificate-based incentive scheme would be still applicable, with certain modifications, to the RES installations commissioned by 1 July 2016 while the RES installations commissioned after that date would be authorized to benefit from the new auction-based incentive scheme.Under the foregoing legislation, the auction-based incentive scheme would be also available to the RES installations commissioned before 1 July 2016 if the pertinent producer decided to start in the auction and give up the certificate-based incentive scheme upon winning the auction.
The regulations provided in the 2015 RES Law were significantly amended by the act of 22 June 2016 on the amendments to the 2015 RES Law (the “Amendment”) which modified the incentive schemes in order to promote the auctions as well as the RES installations with stable generation profile.
Below please find basic information on the RES incentive schemes which apply from 1 July 2016.
The “auction system”
[Financing]
The 2015 RES Law, as amended by the Amendment, introduces a new “auction system” under which financial sources available within the incentive scheme would be collected from the final energy consumers by TSO and DSOs (so-called “RES Payers”) and then transferred through the state-controlled company named Settlement Operator S.A. (“SO”) to the RES operators selected within the auction either directly or – in case of RES installations below 0,5MW – through so-called “obliged purchasers”.
[Form/period of support]
Auctionswill be carried out at least once a year in order to select the RES operators authorized to benefit from support in the form of:
- the power purchase agreement concluded with the “obliged purchaser” and providing for sale of electricity for the price agreed within the auction – in case of RES installations below 0,5 MW; or
- right to compensation of the difference between: (a) the envisaged revenues from sale of the offered and actually generated electricity for the price agreed within the auction and (b) market value of the same electricity calculated based on average daily prices of electricity quoted at the commodity exchange in the day-ahead and two-days-ahead transactions – in case of RES installations with installed capacity of 500 kW or higher;
such support being limited to the maximum period of 15 years starting from commissioning of the pertinent RES installation but in any case ending not later than on 31 December 2035, save for the offshore wind installations where the support period may be extended to 31 December 2040. The maximum 15-year period of support may be further shortened by way of the regulation issued by the Minister of Energy.
[Eligibility]
All the RES installations will be eligible to participate in the “auction”except for:
- the following types commissioned before 1 July 2016:
- hydro power installations with total installed electric power exceeding 20 MW;
- multi-fuel power plants which are not qualified as “dedicated multi-fuel power plants”;
- non-CHP installations using biomass, biofuels, biogas and agricultural biogas with installed capacity exceeding 50 MWe which are not qualified as “dedicated multi-fuel power plants”;
- CHP installations using biomass, biofuels, biogas and agricultural biogas with installed capacity exceeding 150 MWt which are not qualified as “dedicated multi-fuel power plants”.
- the RES installations commissioned between 1 July 2016 and completion of the auction in which given RES installation is selected unless the entire electricity from such installation generated before completion of the respective auction is sold at the commodity exchange and/or organized market by end of December 2016 and such manner of electricity sale was notified to the President of the Energy Regulatory Office not later than 14 days before the date of commissioning.
Subject to number of pre-requisites (i.a. prior conclusion of the intergovernmental agreement between Poland and the state in which the respective foreign RES installation is located, providing for mutual availability of incentive schemes in each country to RES installations located in both countries), the auctions will be available to the RES installations located abroad, it being however specified that the maximum volume of electricity generated abroad and purchased within Polish auction may not exceed the threshold defined in regulation issued by the Council of the Ministers and in any case such threshold not exceeding 5%.
Besides, the Amendment provides for certain requirements applicable to biomass/biogas/biofuels used by the RES installation benefiting from the support scheme, including the requirement that the biomass used in the installation should be originally collected/produced in the distance not exceeding 300 km from the installation, it being specified that the Minister of Energy would be authorized to modify this requirement and limit the maximum distance of 300 km by way of secondary legislation.
[Clusters and energy cooperatives]
Irrespective of the above, the Amendment establishes new forms of cooperation eligible to benefit from the auction-based incentive scheme, i.e.:
- “cluster” which is defined as an agreement between entities (entrepreneurs, communes, scientific units etc.) covering cooperation with respect to generation, balancing, distribution and trade in renewable and non-renewable energy within one distribution network with voltage lower than 110 kV within an area not exceeding the territory of one poviat, it being specified that the cluster will be authorized to conduct business activities regulated by the 1997 Energy Law (i.e. generation, distribution and trade in energy) based on the license granted to an entity appointed as a “coordinator of the cluster”; and
- “energy cooperative” which will be established as cooperative within the meaning of the Polish Cooperative Law conducting business activities in:
- generation of electricity in RES installations of capacity not exceeding 10MW, and/or generation of biogas in RES installations with capacity not exceeding 40 million cubic meters per year, and/or generation of heat in CHP RES installations with thermal capacity not exceeding 30 MWt; as well as
- balancing, distribution and trade in electricity, biogas and/or heat,
for own use of the energy cooperative and its members interconnected to the defined distribution network with voltage lower than 110 kV and/or gas distribution network and/or central heating network within an area of rural and rural-urban communes.
Clusters and energy cooperatives are designed to promote cooperation of local groups of self-balancing energy generators and consumers within distribution networks with voltage lower than 110 kV which should decrease costs of transmission losses in distribution networks covered by clusters and energy cooperatives as well as costs of balancing within such networks. In particular, the energy cooperatives will be allowed to establish, upon prior consent of the President of the Energy Regulatory Office, the so-called “closed distribution systems” supplying electricity to not more than 1000 members of the energy cooperatives, such “closed distribution systems” being exempted from certain administrative burdens (e.g. exemption from obligation to develop grid codes, development plans, standard customers profiles of electricity use as well as exemption from tariff approvals if the tariffs applied within the “closed distribution systems” are lower than the pertinent benchmark tariffs applied within the adjacent area) which may allow for reduction of distribution costs within the “closed distribution systems”. Besides, both clusters and energy cooperatives shall be allocated separate auction baskets from 1 July 2017 onwards which will enable them to receive incentives to RES electricity generated by such clusters and energy cooperatives.It nevertheless seems that restriction of clusters and energy cooperatives to the distribution networks with voltage lower than 110 kV (i.e. exclusion of distribution networks with voltage of 110kV) will make clusters and energy cooperatives generally unavailable to number of wind farms interconnected to distribution networks at a voltage of 110 kV.
[Pre-qualification to the auction]
“Pre-qualification procedure” shall be established to pre-qualify entities authorized to submit offers within the auction:
- pre-qualification criteria aimed at selection of reliable investors with feasible RES projects that meet the criteria for the incentive scheme;
- pre-qualification certificate authorizes to participate in auctions launched generally not later than 12 months after pre-qualification (but not later than validity period of the permits obtained for the pertinent RES project);
- pre-qualification procedure shall not apply to RES installations commissioned before 1 July 2016, whose operators are required to submit the declaration of participation in auction scheme instead.
The offers submitted during auctions shall be accompanied by statements in which RES installation operators declare inter alia that:
- the RES installation does not use the wood other than “energetic wood” (pol. ‘drewno energetyczne’), biomass contaminated in order to acquire higher calorific value, fossil fuels (in case of installation incinerating biomass) in electricity generation process;
- the maximum cap of state aid is not to be exceeded in case of selection of the offer;
- the maximum share of local biomass in the total amount of biomass provided to the RES installation is not exceeded.
[Main auction rules]
Auctions shall be carried out based on the following basic assumptions:
- the auctions for the renewable energy will be carried out separately within the following “technology” baskets:
- electricity generated in the RES installations with installed capacity ≤1MW and load factor exceeding 3504 MWh/MW/annum irrespective of the technology used;
- electricity generated in the RES installations with installed capacity ≤1MW using biodegradable waste fraction (waste incineration plants);
- electricity generated in the RES installations with installed capacity ≤1MW and load factor exceeding 3504 MWh/MW/annum and CO2 emission not exceeding 100 kg/MWh;
- electricity generated by the participants of the so-called “cluster” in the RES installations with installed capacity ≤1MW;
- electricity generated by the participants of the so-called “energy cooperative” in the RES installations with installed capacity ≤1MW;
- electricity generated using exclusively the agricultural biogas in the RES installations with installed capacity ≤1MW;
- electricity generated in the RES installations with installed capacity ≤1MW not qualified under the baskets i) –vi) above;
- electricity generated in the RES installations with installed capacity >1MW and load factor exceeding 3504 MWh/MW/annum irrespective of the technology used;
- electricity generated in the RES installations with installed capacity >1MW using biodegradable waste fraction (waste incineration plants);
- electricity generated in the RES installations with installed capacity >1MW and load factor exceeding 3504 MWh/MW/annum and CO2 emission not exceeding 100 kg/MWh;
- electricity generated by the participants of the so-called “cluster” in the RES installations with installed capacity >1MW;
- electricity generated by the participants of the so-called “energy cooperative” in the RES installations with installed capacity >1MW;
- electricity generated using exclusively the agricultural biogas in the RES installations with installed capacity >1MW;
- electricity generated in the RES installations with installed capacity >1MW not qualified under the baskets viii) –xiii) above;
the auctions within the abovementioned baskets should be carried out separately for electricity generated in RES installations commissioned before 1 July 2016 and after that date;
- the Council of Ministers would be obliged to issue secondary legislation allocating total volumes and values of electricity that may be purchased in given year in each basket (for the first time, such budgets for each basket would be announced by end of August 2016);
- the offer which is not selected in given basket may be sold in auction carried out for the next basket whereas the sequence of the auctions carried out for respective baskets will be determined by the Council of Ministers (e.g. if the offer qualified under basket (i) is not selected within the auction carried out for this basket, it may compete within the auction launched subsequently for another basket in accordance with time schedule provided by the Council of Ministers);
- selection of the RES operators would be based on the criterion of the lowest unit price offered for renewable energy up to the total volume allocated to the basket and in case of the same unit price offered – based on the criterion of the time of submission of the offer; in case the remaining volume of energy to be sold within the auction is less than the volume specified in the next lowest offer, the remaining volume is not sold within the auction;
- reference prices would be set for each RES technology so that all the offers providing for prices higher than the reference price shall be rejected; besides, an offer shall be also subject to rejection if the offered price increased by the unit amount of other state aid granted to the project in any form is higher than the reference price;
- the fixed price for electricity agreed within the auction would be binding on the parties within the whole incentive period (15-year or shorter if the Minister of Energy decides so with respect to RES installations selected within the auction in a given year) save for yearly indexation of such price with annual average index of retail prices of consumer goods and services, described by President of Central Statistical Office;
- the fixed volume of purchased electricity agreed within the auction for each year would be binding on the parties within the whole incentive period (15-year or shorter if the Minister of Energy decides so with respect to RES installations selected within the auction in a given year) and will be verified after each three-year settlement period and upon completion of the entire incentive period; the quantity of electricity covered by the compensation rights shall be however decreased by the volumes generated in those hours for which an average market price quoted on the day-ahead market is negative for at least 6 subsequent hours;
- commissioning of the new RES installation covered by the auction should occur not later than within 48 months (save for solar energy where the deadline is 24 months and offshore wind installations where the deadline is 72 months) following the auction, such commitment to be secured with bank guarantee or money deposit in the amount of PLN 30/kW of the installed capacity.
The auction rules, in particular division into “technological baskets”, prefer the installations with stable generation profile (multi-fuel plants, hydro-power plants, hybrid RES installations covering RES installations with both stable and unstable profile) over the technologies dependent on weather conditions. The technologies with less stable generation profile (photovoltaic, on-shore wind farms) are likely to compete exclusively in baskets specified in points a).vii) and a).xiv) above.
[Penalty for generation shortfall]
If the RES installation is selected within the auction to benefit from the auction-based incentive scheme and generation from such RES installation falls in any 3-year settlement period below 85% of the volume offered within the auction and accruing to such period, the beneficiary (operator of RES installation) shall be subject to financial penalty in the amount calculated as: 0.5 * CA * (EOA – EWA), where:
- CA – price offered within the auction for electricity generated from respective RES installation,
- EOA – volume of electricity to be generated from respective RES installation within given 3-year settlement period in accordance with offer submitted in the auction,
- EWA – volume of electricity actually generated from respective RES installation within given 3-year settlement period.
As a result, the financial penalty would calculated based on the entire missing volume of electricity, including the admissible 15% shortfall.
[Penalty for inappropriate load factor assessment]
Under the Amendment, if the load factor arising from the auction (basket) is not met during the support period (save for specific situations defined in the Amendment which are outside control of the RES operator), the RES operator will be obliged to pay back the entire support received under the auction scheme.
Although the photovoltaic RES installations or on-shore wind are not formally precluded from participation in the auctions for technological baskets with load factor exceeding 3504MWh/MW/a, one may indicate the following risks concerning participation in such auctions:
- at the stage of applying for the certificate allowing to participate in the auction (the “Certificate”) – the RES operator is obliged to declare whether the load factor of the RES installation will be higher or lower than 3504 MWh/MW/year. The information on the load factor will be indicated in the Certificate. According to article 84 of the RES Act, such a declaration may be controlled by the President of the Energy Regulatory Office in terms of compliance with “the factual status”, who may potentially refuse to issue a certificate reflecting higher load factor.
Although the abovementioned risk, at the stage of applying for certificate is rather of theoretical nature (since there is no data on actual load factor), one may not entirely rule out that ERO would try to question applicant’s declaration on the envisaged load factor based on e.g. the wind forecasts included in the RES installation documentation. - at the stage of submitting offer within auction – according to the Terms of Auction (published by ERO on 28 November 2016), the load factor is automatically calculated as the quotient of the energy offered by the RES operator in each year and the total installed capacity of the RES installation. If the envisaged generation and thus load factor for any of the years within the support period is lower than 3504 MWh/MW/year the electronic system (IPA) will prevent the RES operator from submitting the offer in the auction for the particular technological basket. However, the Terms of Auction do not provide for the information whether the algorithm will take into consideration the planned aggregated generation within the whole 15-year period divided by the number of years of generation or the data for each 3-year settlement period or the load factor will be calculated for each year separately.
- at the stage of generation period – according to article 83 section 3a of the RES Act, if the RES installation, which was selected within the auction, fails to meet load factor arising from the auction (basket) within the support period, the RES operator will be obliged to return the compensation granted under the auction scheme (i.e. difference between the revenues from the sale of the actually generated electricity calculated based on, respectively, the auction price and the average daily prices of electricity quoted at the commodity exchange in the day-ahead and two-days-ahead transactions – hereinafter: “Compensation”). Nevertheless, it is ambiguous whether the load factor will be verified (i) after each year, (ii) after each 3-year settlement period, (iii) or after whole support period. It is also not crystal clear, whether the obligation to return the compensation pertains to the year in which the RES installation failed to meet load factor or to the whole support period (up to 15 years).
Thus, competing by the onshore wind farms or photovoltaic RES installations in the auctions dedicated for technologies with more stable generation, although possible, poses significant financial risk for the RES operator if the load factor is not achieved.
Sanctions
The RES Act provides for the following situations where the amount of Compensation owed to the entity winning the auction may be reduced or sanction may be imposed as a result of incompliance with the provisions of the RES Act.
| Sanction | Trigger |
|---|---|
| Lack of Compensation with respect to the volumes of electricity which are qualified by the President of ERO as not being subject to Compensation due to incompliance of actual status of the RES installation with statements of the RES operatorprovided at the stage of the pre-qualification to the auction scheme and/or included in the auction offer *
* Although the statutory provisions are unclear in this matter, one should assume that: (i) if the RES operator received the Compensation covering the volume of electricity questioned by the President of the Energy Regulatory Office, the President of the Energy Regulatory Office issues decision imposing an obligation to return the specified amount of the Compensation; (ii) if the RES operator has not received the Compensation covering the volume of electricity questioned by the President of the Energy Regulatory Office, the President of the Energy Regulatory Office merely qualifies, by way of a ruling (pol. postanowienie), the questioned volume of electricity as an amount not being subject to Compensation and thus Compensation in that respect is not payable. |
Incompliance of actual status of the RES installation with the statements or information provided by the RES operator at the stage of the pre-qualification to the auction scheme and/or included in the auction offer within the following scope:
|
| Prohibition of participation in auction schemewith respect to particular RES installation and obligation to return the entire Compensation granted under the auction scheme |
|
| Obligation to return the entire Compensation granted under the auction scheme | Failure to meet load factor arising from the auction (basket);
|
| Penalty in amount of half the value of missing electricity volume calculated based on the auction price | Generation measured for the 3-year settlement period lower by more than 15% comparing to volumes offered within the auction. |
| Penalty in amount of PLN 10,000 and potentially the additional penalty imposed on the manager (pol. kierownik) of the energy company in amount no exceeding 300% of his monthly salary. |
|
Status of the RES installations commissioned before 1 July 2016
[Eligibility under the auction scheme] As regards the RES installations commissioned before 1 July 2016, the operators will be authorized to participate in the auctions and benefit from the new auction-based incentive system, except for:
- hydro power installations with total installed electric power exceeding 20 MW;
- multi-fuel power plants which are not qualified as “dedicated multi-fuel power plants”;
- non-CHP installations using biomass, biofuels, biogas and agricultural biogas with installed capacity exceeding 50 MWe which are not qualified as “dedicated multi-fuel power plants”;
- CHP installations using biomass, biofuels, biogas and agricultural biogas with installed capacity exceeding 150 MWt which are not qualified as “dedicated multi-fuel power plants”.
In any case, the total period of support available to the existing RES cannot exceed 15 years from first generation confirmed by certificate of origin.
[Eligibility under certificate-based scheme]
Under the 2015 RES Law, as currently in force, the operators of the RES installations commissioned before 1 July 2016 are authorized to benefit from the current support scheme based on the tradable certificates of origin for the period not exceeding 15 years from first generation confirmed by certificate of origin. Under such scenario, the operators have the rights to:
- sell the entire generation to the last resort supplier at a price equal to the average electricity price in the preceding quarter, and
- receive tradable certificates of origin purchased in particular by suppliers selling electricity to final consumers.
Nevertheless, the Amendment provides that the right specified in point (a) above would be limited as of 1 January 2018 onwards to the RES installations with the total installed capacity below 0.5MW and the biogas-fueled RES installations. This means that:
almost all the RES installations with installed capacity equal to or exceeding 0.5MW (except for the biogas-fueled installations) will be deprived of the right to sell the electricity at the regulated price from 1 July 2018 onwards. Besides, the Amendment establishes separate certificates of origin awarded to biogas-fueled power plants with separate redemption quotas for such certificates established at the level of 0.65%, i.e. at a level generally corresponding to the maximum generation from the existing biogas-fueled power plants. The foregoing amendment will ensure separate (higher and more stable) incentives for the operators of the existing biogas-fueled power plants. On the other hand, the:
redemption quotas for the certificates of origin awarded to the existing non-biogas RES installations will be most likely decreased by the Minister of Energy below statutory level of 19.35% which means that the current oversupply of these certificates will not be reduced and thus the level of support addressed to non-biogas RES power plants will remain relatively low(according to the adopted secondary legislation the redemption quotas for 2017 will amount to 15.4% with respect to green certificates and 0.6% with respect to blue certificates).
As a result of the abovementioned changes, the last resort suppliers will most likely approach the RES operators by end of 2017 in order to re-negotiate and/or even terminate the power purchase agreements currently in force with respect to the non-biogas RES installations. As a consequence, the operators of RES installations with lower load factor (such as wind farms) will face significant risk of lower prices for their generation, such prices to be most likely corresponding to spot prices as determined at the day-ahead market or balancing market. The foregoing risk, together with relatively low prices for the certificates of origin, may force the vast majority of wind farm operators to participate in auctions which will increase competition within the auction, specifically in auction baskets designed for installations with lower load factor. In order to improve their position within the auction, the operators of RES installations with lower load factor (e.g. wind farm) may also consider development of a RES installations with stable generation (e.g. biogas or biomass-fueled installations) in the vicinity of the existing power plant in order to create a hybrid RES installation with higher load factor and be able to compete in auction baskets envisaged for stable generation. Such scenario would nevertheless require i.a. a time-consuming permitting process and increase operational expenditures of the entire hybrid installation.
Modifications to the certificate-based incentive scheme
Under the 2015 RES Law as amended by the Amendment, the current support scheme based on tradable certificates of origin is adjusted as follows:
- RES installations commissioned after 1 July 2016 cannot benefit from current scheme;
- the total period of support cannot exceed 15 years from first generation confirmed by certificate of origin;
- hydro-power installations with installed capacity exceeding 5 MW deprived of the right to support in the form of certificates of origin;
- multi-fuel power plants using biomas, biofuels, biogas and agricultural biogas, other than “dedicated multi-fuel power plants”, may obtain only limited number of certificates in each year corresponding to the average annual “green generation” in the period 2011-2013 and such certificates to be further subject to correction with “co-efficient” set by the Council of Ministers;
- the certificates of origin shall not be granted to RES electricity generated in those hours for which an average market price quoted on the day-ahead market is negative for at least 6 subsequent hours;
- the Amendment establishes separate certificates of origin (so-called “blue certificates”) awarded to biogas-fueled power plants with separate redemption quotas for such certificates established at the level of 0.65%;
- if the price of certificates of origin quoted at the Polish Power Exchange is lower than the substitute fee for the period of more than 1 month, there will be limited possibility to pay “substitute fee” as an alternative method of the fulfillment of the obligation to obtain and redeem certificates of origin;
- “substitute fee” set at PLN 300,03/MWh.
Proposed parameters for RES support schemes in 2016-2017
The Polish government adopted the following draft secondary legislation to the 2015 RES Law which will impact actual level of support to be offered to RES installations in 2016-2017:
- regulation of the Minister of Energy dated 17 October 2016 concerning change of quota of electric energy covered by redeemed certificates of origin confirming generation of electric energy in renewable energy sources;
- regulation of the Minister of Energy dated 17 October 2016 concerning reference prices of energy from renewable sources for 2016;
- regulation of the Council of Ministers dated 27 October 2016 concerning maximum volume and value of electricity from renewable energy sources that may be sold within the auctions in 2016; and
- regulation of the Council of Ministers dated 27 October concerning order of auctions for the sale of electricity from renewable sources of energy in 2016
- regulation of the Minister of Energy dated 1 December 2016 on calculation of the amount of state aid for the energy from the renewable energy source generated in the renewable energy installation
Besides, there are also two other regulations which are now subject to the legislation procedure:
- draft regulation of the Council of Ministers concerning maximum volume and value of electricity from renewable energy sources that may be sold within the auctions in 2017; and
- draft regulation of the Council of Ministers concerning order of auctions for the sale of electricity from renewable sources of energy in 2017.
Green certificates redemption quotas
According to the adopted secondary legislation, the:
required green certificates redemption quota for 2017 would amount to 15.4% (comparing to 15% applicable in 2016) while the quota applicable to the required redemption of the so-called “blue certificates” in 2017 (i.e. certificates of origin confirming generation of electricity from biogas) would be equal to 0.6%. Based on the foregoing numbers, the annual demand for green certificates purchased for the purpose of meeting the redemption quotas in years 2016-2017 might be assessed at approx. 17-18 TWh.
The proposed 2017 green certificates redemption quotas do not guarantee elimination of the green certificates oversupply within the reasonable timeframes.The foregoing assessment stems from the fact that the:
green certificates existing as of end of July 2016 covered almost 22.8 TWh while the green certificates issued within the last year (i.e. from August 2015 until July 2016) covered ca. 21 TWh.
This means that the:
already existing green certificates would be sufficient to meet the demand with respect to the entire 2016 and significant part of 2017– irrespective of the continuous supply of green certificates at the level of ca. 20 TWh annually (including ca. 11-12 TWh coming from the onshore wind power plants).
Auction scheme
The draft secondary legislation proposes the following reference prices to be applied within the 2017 auctions as caps for the prices offered within the auction for electricity generated from various types of RES installations:
| Type of RES installation | Reference price [PLN/MWh] |
Reference price [EUR/MWh]
1 EUR = 4,31 PLN |
|---|---|---|
| Agricultural biogas ≤1MW | 550 | 127,61 |
| Agricultural biogas >1MW | 550 | 127,61 |
| Landfill biogas | 405 | 93,97 |
| Sewage treatment plant biogas | 365 | 84,69 |
| Biogas not specified above | 355 | 82,37 |
| Biomass in dedicated biomass combustion installations and hybrid power plants ≤50MW | 415 | 96,29 |
| Biomass, biofuels, biogas or agricultural biogas in dedicated multi-fuel combustion installations | 325 | 75,41 |
| Biomass in CHP dedicated biomass combustion installations and CHP hybrid power plants ≤50MW | 450 | 104,41 |
| Biomass in CHP dedicated biomass combustion installations and CHP hybrid power plants >50MWe and ≤150MWt | 435 | 100,93 |
| Waste incineration plants | 385 | 89,33 |
| Biofuels | 475 | 110,21 |
| Onshore wind farm ≤1MW | 375 | 87,01 |
| Onshore wind farm >1MW | 350 | 81,21 |
| Hydro power plants ≤1MW | 470 | 109,05 |
| Hydro power plants >1MW | 480 | 111,37 |
| Geothermal power plant | 455 | 105,57 |
| Solar ≤1MW | 450 | 104,41 |
| Solar >1MW | 425 | 98,61 |
| Offshore wind farm | 470 | 109,05 |
| Renewable hybrid power plant irrespective of the fuel used ≤ 1 MW | 470 | 109,05 |
| Renewable hybrid power plant irrespective of the fuel used > 1 MW | 405 | 93,97 |
Moreover, within the adopted secondary legislation for 2016 as well as draft secondary legislation for 2017 the following budgets are to be applicable in the 2016 and 2017 auctions within the baskets established under the RES Act: PDF : Type of RES installation
Based on the above, the budgets proposed for the 2016 auctions will allow for:
- construction of approx. 50 new onshore wind/photovoltaic power plants with installed capacity of 1 MWand the annual average load factor equal to 2100 MWh/MW/a (ca. 24%);
- transfer to the auction scheme of:
- approx. 18-19 annual average load factor equal to 7600 MWh/MW/a;
- approx. annual average load factor equal to 7600 MWh/MW/a;
- approx. 24 existing hydro power plants with installed capacity of 1 MW and annual average load factor equal to 3600 MWh/h/a.
As regards the 2017 auctions, the justifications appended to the draft secondary legislation provide that the proposed 2017 budgets will allow for support of the following newRES installations:
- agricultural biogas plants:
- with installed capacity ≤1MW – projects with aggregated maximum capacity up to 70 MW;
- with installed capacity > 1 MW – projects with aggregated maximum capacity up to 30 MW;
- landfill biogas plants with installed capacity ≤ 1MW – projects with aggregated maximum capacity up to 5 MW;
- biogas plants in sewage treatment plants with installed capacity ≤ 1MW – projects with aggregated maximum capacity up to 5 MW;
- biomass in dedicated biomass combustion installations with installed capacity ≤ 1MW– projects with aggregated maximum capacity up to 100 MW;
- incineration plants with installed capacity > 1 MW – projects with aggregated maximum capacity up to 150 MW;
- hydro power plants:
- with installed capacity ≤1MW – projects with aggregated maximum capacity up to 10 MW;
- with installed capacity > 1 MW – projects with aggregated maximum capacity up to 10 MW;
- solar power plants with installed capacity ≤ 1MW – projects with aggregated maximum capacity up to 300 MW,
- onshore wind power plants with installed capacity exceeding 1 MW – projects with aggregated maximum capacity up to 150 MW.
The proposals provided within already adopted regulations mean that the 2016 and 2017 auctions will not mitigate current oversupply of green certificates at the market as the existing non-biogas RES installations generating green certificates will not be generally allowed to switch to the auction scheme and thus reduce the green certificates supply as well as benefit from more stable revenues under the auction system (save for budgets to be allocated within the 2017 auctions for stable non-biogas RES installations commissioned by 1 July 2016, such installations to be able to compete for support not exceeding PLN 4 662 222 821 in total).
The draft regulations concerning 2017 auctions are not the final proposals, hence they may be modified before their adoption.
Finally, on 28 November 2016 the President of ERO published the Terms of Auction which specifies in details the next steps in the course of renewable energy auctions. According to the Announcement of the President of Energy Regulatory Office dated 30 November 2016, the 2016 RES auctions took place on 30 December 2016. Unfortunately, some of the bidders were unable to submit their offer due to technical problems with auction platform.