On 3 April 2017 two regulations were published in the Journal of Laws which set out the financial parameters of auctions for renewable energy sources (“RES”) that will be held in 2017. The government is planning to spend more than PLN 27 billion (approximately EUR 6.5 billion) on support for producers in auctions, which will generate over 55 TWh of electricity over 15 years. The parameters of the auctions are set out below.
- In 2017, fourteen auctions will be organized, each of them dedicated to different groups of installations. Nearly 75% of the funds (PLN 20 billion) will be allocated to the New Installations1. Nearly 63% of all funds (PLN 17 billion) is allocated to the Large Installations2.
- So- called stable installations will be the most favored group of installations. The largest part of the funds is allocated to a basket of high-efficiency installations (37% of funds in 4 auctions). Biomass installations are expected to be a dominant group in this basket. Significant funds (35% in 4 auctions) will be allocated to agricultural biogas installations.
- It is planned to allocate funds to Waste-to-Energy projects, which should assure the construction of installations with nearly 150 MW of total capacity (1 auction dedicated for New, Large Installations). Part of the funds is also allocated to a basket dedicated to hydro-electric plants, both existing and new ones (3 auctions).
- Another part of the budget is allocated to a basket for New Installations covering “other installations” (15% of funds in 2 auctions). In this basket, two auctions are planned: (i) for Small Installations that, according to the government’s intention, will result in the construction of 300 MW new photovoltaic projects, and (ii) for Large Installations, where support could be obtained by nearly 150 MW new wind projects. Significant competition is expected in these two auctions.
- Installations participating in an auction cannot apply for higher support than the “reference price”, which is determined for each year. The reference price is set separately for 21 categories of installations. In 2017, for example this price will be PLN 350 per MWh for Large Installations using wind and PLN 450 per MWh for Small Installations using solar energy.
- Auctions will be announced by the President of ERO and cannot be organized earlier than 30 days after its announcement. In light of the RES Act, an auction could be organized at the earliest on 24 May 2017, but no announcements regarding auctions have been made to date.
2. Auction support scheme
Under the Act of 20 February 2015 on renewable energy sources (“RES Act”), there are two support schemes for RES installations in Poland. Existing Installations can obtain support in the form of certificates of origin (“Green Certificates”) and can sell electricity to designated entities at the officially determined price (“System of Certificates”)3. New Installations will compete for support allocated in auctions (“Auction System”) organized by the President of the Energy Regulatory Office (“ERO”).
The Auction System is dedicated mainly to New Installations, but Existing Installations can also transfer to this System (in such case they lose a right to participate in System of Certificates). This system is intended to assure the future development of RES, but in a controlled and predictable manner – this may be pursued through the allocation of budgets to auctions where installations favored by the government start and through the reduction of budgets for auctions for unwanted installations.