The draft Act on Renewable Energy Sources (Act) introduces a new instrument into Polish law - a guarantee of origin. A guarantee of origin of electric energy generated in a renewable energy source and electric energy generated from agricultural biogas is intended as a document to be used to confirm to the final customer that the electric energy was generated in a renewable energy source (RES) or from agricultural biogas in a RES installation.

Implementation of the RES Directive

The introduction of a guarantee of origin into Polish law is connected with the implementation of EU Directive 2009/28/EC on the promotion of the use of energy from renewable sources (RES Directive). Pursuant to the RES Directive, a guarantee of origin defines in particular: the source from which energy was generated, the dates of commencement and completion of the generation process, the location, type and capacity of the installation, as well as whether the installation received investment support and, if so, to what extent. Pursuant to the Recitals of the RES Directive, guarantees of origin are used only to prove to the final customer that the specific portion or quantity of energy was generated in renewable sources.

The RES Directive also expressly stipulates that the guarantees of origin may be transferred by one holder to another – regardless of the energy to which they refer. Nevertheless, double counting or double disclosure of a guarantee of origin is not allowed. Consequently, energy from RES for which guarantees of origin have been sold by the generator separately should not be sold to the final customer as energy from renewable sources.

Draft national regulation

The Polish legislator has not set out the minimum capacity starting from which the guarantees of origin will be issued. The guarantees will be issued for the electric energy generated with the accuracy of 1 MWh and with a validity period of 12 months from the date of generation of electric energy from a RES or its generation from agricultural biogas in a RES installation, after which they will expire.

An application to issue a guarantee of origin will have to be filed within 7 days of the date of generation of a given quantity to which the application refers. As in the case of certificates of origin, a generator will file an application with the relevant Distribution System Operator or Transmission System Operator, and the relevant operator will forward the application to the Polish Regulator. The Regulator should issue a guarantee of origin within 30 days of the date of the application being forwarded. Guarantees of origin will be issued in the form of an electronic document.

It is worth noting that an application should specify, among other things, whether the RES installation defined in the application benefited from support mechanisms for generating electric energy in a RES. However, there is no provision specifying the consequences of such a situation. It is worth noting that in such a case the RES Directive provides for a possibility of a generator not being provided with support for generating energy in RES. In the current draft Act, the Polish legislator does not take advantage of this possibility, which, is obviously a good solution from the point of view of the generators.

Additionally, the Regulator will keep a register of guarantees of origin in which, in particular, the fact of delivering a guarantee of origin to the final customer will be recorded. This is to prevent a situation where the same electric energy unit is sold several times as green energy to final customers. Upon delivering a guarantee of origin to the final customer, it will not be traded any further.

“Guarantees of origin” versus “certificates of origin”

The guarantees of origin should not be confused with “certificates of origin”, also known as “green certificates”, to which the redemption obligation resting on specific entities relates and which now function as the basic element of the RES support system in Poland. Pursuant to the draft RES Act, no property rights arise from the guarantees of origin and they do not give their holders the right to use instruments supporting energy generation in RES. However, it should be noted that in fact the guarantees of origin are themselves a support instrument for RES installations, since trading in them will be an additional source of income for those entities. The above regulations should thus be interpreted rather restrictively, as a means of emphasis that the guarantees of origin are not the same as “green certificates” and cannot be cancelled in order to fulfil statutory obligations.

Additionally, as opposed to “green certificates”, the guarantees of origin may be traded between entities based in different EU member states, Switzerland and the EFTA member states. The Polish Regulator will also recognise guarantees of origin issued in those countries.

Recapitulation

It is worth following new developments regarding this regulation since it potentially creates a new electric energy related market in Poland. At present, it is difficult to estimate the demand for guarantees of origin on the domestic market, but the interest in purchasing Polish guarantees of origin has been already expressed by trading companies from other European countries in connection with a high demand for environment-friendly products among their customers.