Covid-19 anti-crisis shield and the renewable energy sources (RES) sector

Two dimensions of the problems in the sector

Not only world-famous Wuhan, but also Jiangsu, Guangdong, Anhui and Zhejiang – Chinese provinces known as the global manufacturing centres of devices used in RES plants (among others, solar panels) – have ben affected by the covid-19 epidemic. The manufacture of key components of RES plants was ceased or limited. It turned out quickly that the supply chains from China were interrupted and major delays had occurred in the implementation of RES projects in Poland long before the first coronavirus case was reported in our country. Another group of problems piling up in connection with the coronavirus outbreak in Poland concerns, above all, restrictions at the stage of construction work, collaboration with electricity providers and a limited availability of public administration offices and local government authorities.

Delays in project implementation have the most serious consequences above all for energy producers who have secured support through RES auctions but have not started to sell electricity yet. The major changes introduced by the anti-crisis legislation are dedicated to this very group.

Extension of deadlines for the first sale of electricity under the auction system

According to the existing renewable energy sources act, producers who placed winning bids at the auction for the sale of electricity generated from new or upgraded RES installations are obliged to commence the (first) sale under the auction system within: 33 months for onshore wind farms, 24 months for photovoltaic farms, 72 months for offshore wind farms and 42 months for other RES plants. If those deadlines are not met, the plant is banned from the auction system for three years and the energy producer loses the deposit paid to participate in the auction.

The above deadlines can be extended under the anti-crisis legislation on account of occurrence of circumstances beyond producer’s control. The anti-crisis legislation provides for an option to file an application with the President of the Energy Regulatory Office (ERO) to have the deadline for the first sale of electricity under the auction system extended for no more than 12 months of the original deadline for performance of that obligation. At the same time, the act significantly limits the discretionary power of the authority – when considering the application the President of the ERO must consider to the benefit of the producer the fact that the delay:

1. in the supply of equipment making up a RES plant,
2. in the supply of components necessary for the construction of a RES plant,
3. in the construction of a RES plant and connections to the power grid, or
4. during the acceptance or commissioning of a RES plant, or
5. when obtaining a licence or entry in the registers specified in the act

is caused by the state of epidemic emergency or the state of epidemic.

The application can be filed once, no later than 30 days prior to the deadline for the first sale of energy under the auction system. Furthermore, we need to add that under the transitional provision the RES producers who won last year’s auction can also apply for the deadline extension.

Permissible age of the components

A similar regulation has been introduced in relation to the maximum age of the equipment (components) making up a RES plant. The anti-crisis legislation provides for an option to apply once to the President of the ERO for the extension of the permissible period between the equipment’s year of production and the first production of electricity, however, it must not be longer than 12 months of the original period.

FiT/FiP systems

The anti-crisis legislation provides for regulations dedicated to producers using the feed-in tariff (FiT) and feed-in premium (FiP) systems, that is provisions applicable to RES installations using water power, biogas and agricultural biogas. The new provisions apply to producers’ declarations on the intention to sell unused electricity. Also in this case the application for the extension of deadline for the first-time production of electricity by the plant, or for the increase of the permissible age of the devices, can be filed.

Extension of deadlines at the time of the coronavirus pandemic

The new measures focus on the extended deadlines for the implementation of investment projects related to RES installations due to circumstances independent of energy producers, that is the covid-19 pandemic. They will definitely increase the chances of RES energy producers to use the state support systems. Please note that at the time of abrupt budget changes and redefining the priorities of the economic policy, the government notices the needs of the RES sector. The direction of development of the energy sector does not change and Poland is still aiming at its energy and climate targets in 2020. In particular, a budget regulation on the maximum amount and value of electricity from renewable energy eources which may be sold by auction in 2020 remains in force.