An amendment to the Renewable Energy Sources Act of 20 February 2015 (“RES Act”) was adopted on 29 December 2015 (the “RES Amendment Act”). The RES Amendment Act still remains to be signed by the President and published in the Official Journal of Laws. It is scheduled to enter in force on 31 December 2015.
The RES Amendment Act will postpone by 6 months the change of the support scheme for renewable energy sources (“RES”) from certificates of origin to auction based support. At the same time it extends the interim provisions of the RES Act being the legal basis for support through green certificates from 1 January 2016 to 30 June 2016 and additionally makes some adjustments to this scheme.
The RES Amendment Act also modifies the position of micro installations (RES installations of up to 40 kW or 120 kW in CHP), whereby these changes are not covered by this communication.
1) Legal context
On 20 February 2015 Poland adopted RES Act, aimed at comprehensively regulating the RES sector, with Chapter IV of the RES Act introducing the auction scheme, effective as from 1 January 2016 (the remaining part of the RES Act entered into force on 4 May 2015).
The RES Act formed two separate incentive systems for RES installations, depending on when the said installation started to generate electricity:
- RES installations which started generating electricity on or before 31 December 2015 (“Existing Installations”) were supposed to obtain certificates of origin from RES ("Green Certificates") and to sell property rights arising from Green Certificates (“Certificates System”).
- RES installations which start generating electricity on or after 1 January 2016 (“New Installations”) were to compete for contracts-for-difference in auctions organised by the President of the Energy Regulatory Office ("ERO"), (“Auction System”).
2) Postponement of the entry into force of Chapter IV
In accordance with the RES Amendment Act, Chapter IV of the RES Act will enter into force only on 1 July 2016. In consequence, all installations which will generate electricity for the first time on or before 30 June 2016 will be eligible for inclusion in the Certificates System. This will include Existing Installations and installations that will start generating electricity after 1 January 2016 but on or before 30 June 2016 (“New Existing Installations”). All these installations will also have the right to switch to the Auction System (with certain exceptions).
This solution will actually allow projects that are ready to start generating power between 1 January and 30 June 2016 to become eligible for the Certificates System support.
Installations that start generating electricity on or after 1 July 2016 will not be eligible for the Certificates System. Instead, they will be allowed to compete in auctions in accordance with the principles set out for the Auctions System.
3) Provisions concerning transitional period
The RES Amendment Act introduces transitional provisions for the period between 1 January 2016 and 30 June 2016. During this time the Certificates System is to remain similar in form to the system prevailing until 31 December 2015. Therefore Existing Installations and New Existing Installations will enjoy the right to obtain Green Certificates and the right to request the seller of last resort to purchase electricity based on the statutory price calculated and published by the President of the ERO.
When postponing the entry into force of Chapter IV of the RES Act, it was decided that certain provisions limiting the right to obtain Green Certificates will apply during the interim period (i.e. until 1 July 2016). From 1 January 2016, the support for hydro-generation will be limited to installations with installed power of up to 5 MW. Moreover, non-qualified biomass co-firing installations will receive only half the number of certificates per each MWh of eligible renewable electricity produced in an RES installation. These limitations are also provided for in the now deferred Chapter IV of the RES Act and therefore they will continue to apply after 1 July 2016.
During the additional 6 months until the entry in force of Chapter IV of the RES Act another technical amendment may be expected, regulating certain aspects of the auction procedure in greater detail.
4) Impact on auction schedule
The provisions of the RES Amendment Act do not directly change the schedule of the first auction. However, Article 210 of the RES Act provides that the first announcements of an auction need to be made no later than 90 days after the entry into force of Chapter IV. After the RES Amendment Act enters into force, this time limit will be calculated from 1 July 2016 – not 1 January 2016. The announcement must give the date of the auction, which must be at least 30 days after the announcement. Therefore if these deadlines are observed, the first auction may take place in approximately November 2016 and in no event any earlier than 30 July 2016.