The act on wind turbine investments (the “Act”) entered into force on 16 July 2016, and the changes it introduced are still being heavily discussed by the wind farm industry. The aim of the discussion is to mitigate the strict provisions of the Act, which hinder the development of wind energy investments in Poland.
According to the Act, the distance between wind turbines and households or mixed purpose buildings should be at least ten times the total height of the wind turbine. The wind farm industry suggested that the distance should be reduced to five times the height or be determined together with the local community case by case. As a response to the expectations of the wind farm industry, one of the opposition parties prepared a bill (the “Bill”) which was submitted to the lower chamber of parliament on 9 August 2016.
The first of the proposed changes is the amendment of the recently introduced definition of a “wind turbine”. According to the current definition introduced by the Act, a wind turbine (along with its foundation, tower, together with all technical elements) constitutes a building in the meaning of the construction law. From the wind farm investor’s perspective, this may result in a significant increase of real property tax. The taxation of wind turbines has been considered in a number of court rulings as well as rulings of the Constitutional Tribunal. There are in general two different views on the taxation of wind turbines with real property tax: the first one is to tax the entire wind turbine and the opposite and the dominant view is to tax only the construction elements of the wind turbine (such as foundation and tower). Due to the strict application of the tax law, it is questionable whether the introduction of a definition of a “wind turbine” in the Act and minor changes in the construction law are sufficient to tax both the construction and technical elements of a wind turbine with the property tax. The changes proposed in the draft Bill regarding the definition of a “wind turbine” support the dominant view that only of the structural elements of the wind turbine should be taxed.
Another important change suggested by the draft Bill is reducing the minimum distance between the wind turbine and households or mixed purpose buildings to 800 meters. According to the Bill, the proposed changes will also pertain to the terms of determining where the wind turbines shall be built. New wind turbine locations shall be designated in local spatial development plans, instead of in the local study.
Irrespective of the above, according to the media reports, the Ministry of Energy is planning to introduce some changes to the Act pertaining to the detailed regulation of energy clusters. No information on other probable changes has been made publicly available.
The amendments to the Act, which aim to mitigate the current strict provisions, are essential to ensuring the balanced development of wind farm investments, as the current Act has had a negative impact on planned investments as well as on the repowering of existing ones.