New rules for support of “green energy”

The Council of Ministers has adopted a bill on renewable sources of energy. It includes solutions which strengthen sustainable development of the renewable energy sector. Support for “green energy” will be optimum in terms of costs, which is why it should not result in higher prices for consumers. The price of electricity is expected to be an important factor of Polish economy’s competitiveness.

Photo: M. Śmiarowski / Chancellery of the Prime Minister

The government proposes to change the system supporting the renewable energy sector. It wants to replace the “green certificates” mechanism with an auction system which is optimum in terms of costs, and will support effective production of “green energy”. It has been constructed in a way which will ensure full competition of all RES technologies, which, consequently, should lead to development of new, more cost-effective installations, and prevent the “over-support”, which took place as part of the current mechanism of the so-called green certificates. The auction system could be launched at the beginning of 2015. Without introducing the proposed cost optimisation, the RES support system can cost around PLN 4.6 – 6.2 billion in 2015 and PLN 7.5 – 11.5 billion in 2020.

According to the bill, the auction system will cover electricity generation bids in new and modernised installations using renewable energy sources. In the case of the existing installations, the maximum guaranteed period of support system is expected to be 15 years, and will be counted from the moment at which electricity, for which the certificate of origin was due, is generated for the first time. For new RES investors, a different, innovative way of calculating the guaranteed price valid for 15 years has been prepared. Furthermore, the bill assumes that separate auctions will be organised for generating RES electricity produced at facilities with installed power of 1 MW and over 1 MW. However, at least 25% of the RES electricity should be come from facilities with installed power of less than 1 MW.

According to the bill, auctions are to be announced, organised and conducted by the president of the Energy Regulatory Office (URE) at least once a year. He will be obliged to publish an announcement about the auction in BIP URE at least 30 days prior to the commencement of the auction. The auction will be won by bidders who will offer the lowest selling price of RES electricity.

The regulations which introduce the new RES support scheme are expected to take effect on the first day of the month following the lapse of 12 months after the day on which the European Commission will issue a positive decision approving the support system as one compliant with state aid regulations. This provision is favourable for investors, as it gives them much more time to adapt their investment projects to the new guidelines.

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