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of 19 July 2019 that came into force on 29 August 2019
Article published on 9th December 2019
The amendment makes it possible to conduct auctions for energy from renewable sources in 2019. It determines the maximum volume and maximum value of electric energy that can be sold by auction in 2019. In the joint “basket” for power producers who exclusively use onshore wind energy and for those who exclusively use solar power in power plants with an installed capacity of maximally 1 MW, the energy volume to be auctioned is 11 445 000 MWh and its value is PLN 4,213,650,000. For the same sources of energy but using power plants of over 1 MW, the volume will be 113 970 000 MWh with the total value of PLN 32,577,000,000.
According to the calculations of the Ministry of Energy, the volume of auctioned electricity production involving all renewable energy sources in 2019 will overall increase by approx. 10 TWh and, together with the auctions for 2018, by approx. 35 TWh. The Ministry of Energy expects that thanks to those auctions it will be possible to add e.g. another 2.5 GW in wind capacity and achieve the EU target of a 15 % share of renewables in the Polish energy mix by 2020.
According to unofficial information from the Polish electricity regulator, the upcoming renewable energy auction for 2019 is planned to be organised in December. 30 days prior to the beginning of the auction, the Polish energy regulator will publish an official announcement on its website.
A huge advantage of the amendment is the possibility to update the winning bid once as regards the planned start date of the period in which the auction funding system will be used. In addition, it is possible to change the installed capacity of the renewable power plant provided that no statutorily required parameters regarding the size of the power plant are changed (e.g. after being awarded a contract in an auction, a power producer may not increase the capacity of a micro system to make it a small-scale power plant) and provided that the increase in the installed capacity does not change the auction basket (if a power producer wins an auction for a power plant of up to 1 MW, he may change the capacity of the power plant as long as it does not exceed 1 MW).
It should also be noted that the deadline for the first sale of energy as part of the auction system has been extended, which is advantageous for power producers. The previous 18 months’ deadline for the first sale after the completion of the auction has been extended to 24 months for those producing energy from PV power plants; the previous 24 months’ deadline for those producing from onshore wind turbines has been extended to 33 months and for offshore wind turbines even to 72 months.
Also the law on investments in wind turbines has been amended. The legislator has extended the validity period of construction permits for wind turbines issued prior to 16 July 2016 (i.e. the date when the above-mentioned law came into force). According to the applicable regulation, the construction permit issued for a wind turbine prior to 16 July 2016 remains valid as long as an operation permit for that wind turbine is issued within 5 years of this date. The amendment prolongs the deadline for obtaining the operation permit for wind turbines until 16 July 2024 and therefore the already issued construction permits also remain valid until that date.
Except for wind turbines the location of which since 16 July 2016 may only be determined on the basis of a local land use plan, the location of most Polish renewable energy plants is determined on the basis of an outline planning permission. This applies in particular to PV power plants. An outline planning permission is issued by the head of the municipality, the mayor or the senior mayor once an investor has fulfilled the conditions set out in the Spatial Planning and Development Act. Previously, one of the more difficult conditions for investors to meet was the requirement to ensure compliance with “the principle of good neighbourliness”. According to that principle, a renewable power plant should be constructed on a land plot adjacent to a land plot that is used for a similar purpose. Thus, it was not possible, e.g., to install a PV plant behind a school or a hospital. The requirement of complying with the principle of good neighbourliness did not apply to railway lines, linear objects and technical infrastructure. Importantly, said amendment to the RES Act has expanded the list of preferred investments that do not have to meet the requirement of ensuring compliance with the principle of good neighbourliness and this list now includes renewable power plants. This amendment will undoubtedly have a positive impact on the dynamics of the implementation of construction projects in the area of renewable power plants.
The amendment has changed the definition of a “renewable energy prosumer” to include entrepreneurs that produce electric energy from renewable resources for their own purposes in a micro power plant (i.e. a power plant of up to 50 kW). At the same time, the sale of energy may not constitute the core business of the entrepreneur within the meaning of the Public Statistics Act. Prosumers may choose from a range of investor-friendly incentives. They do not have to obtain any terms and conditions of connecting the power plant to the grid or pay any grid connection fees. They are also exempted from the obligation to hold a concession for the generation and sale of energy. Excess electricity is settled by prosumers based on net metering.
Piotr Mrowiec, LL.M.
Associate Partner
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