The amendment of the Renewable Energy Law Act (the “Act on RES”) was signed by the Polish President on 28 June 2016. After relatively short legislative proceedings, the amendments, heavily criticised by the wind farm industry, were officially published in the Official Journal of Laws. The amendments, with several exceptions, will enter into force on 1 July 2016.

The intention behind adopting the Act on RES on 20 February 2015 was to create a package of regulations for renewable energy sources. Since then the renewable energy industry has developed expectations of the support it would receive in the form of auctions; however the legislator decided to postpone the introduction of the auction system and then introduced significant changes to the entire Act. Some of the changes are as follows:

  • New definitions remained as they were in the first version of the amended Act: local biomass, small producer of energy, hybrid renewable energy source installation and clusters. Clusters were defined as civil arrangements (no specific legal form was kept) that concentrate entities such as individuals, legal persons, academic institutions, research and development units that act within a county or area of five municipalities. Such clusters will be promoted in, for example, an auction system. The terms micro- and macro-cluster proposed in the first version of the Act have been deleted.
  • An energy cooperative was introduced and will also be promoted in an auction system; however, it is questionable whether the cooperative will successfully operate without support in the form of Feed-in-Tariffs (FIT).
  • Controversy may also arise in relation to Zarządca Rozliczeń S.A., which is acting under the Act on RES on the principles of compensating for generators’ costs arising in connection with the early termination of long-term contracts for the sale of capacity and electricity. Zarządca Rozliczeń S.A.’s task is to cover the negative balance of obliged suppliers and energy producers as well as its own operational costs, which may call into question the transparency of its activity. A new proposition on the transition fee settlement may also be incompliant with the state aid rules agreed with the EU.
  • Smaller RES installations will not benefit from the FIT system. According to the authors of the amendments, FIT prevents the development of smaller producers because it involves the generation of electricity for own use without pursuing activity in the field of energy generation.  Instead of FIT, energy introduced to the grid and the energy collected from the grid will be set off.
  • Separate auctions will be conducted for RES installations with installed capacity above 1 MW and those with capacity below 1 MW. Auctions will be divided into 7 technology baskets:
  1. RES installations with efficiency higher than 3504 MWh / MW / year;
  2. RES installations which generate energy from biodegradable fractions of industrial and municipal waste, waste of plant and animal origin, including waste treatment plants and waste water treatment and sewage treatment, in particular sewage sludge;
  3. RES installations in which CO2 emissions are less than 100 kg / MWh with efficiency higher than 3504 MWh / MW / year;
  4. members of a cluster;
  5. members of an energy cooperative;
  6. installations which generate energy only from agricultural biogas;
  7. installations other than those mentioned above.
  • The President of the Energy Regulatory Office is also preparing to implement the key changes to the Act on RES by running a trial auction, which should take place by the end of June. However, no information on the date of the auction has been provided, therefore it is highly likely that the test of the new bidding process in auctions will be postponed. Under the Act on RES the first auction should be announced by the President of the Energy Regulatory Office in 2016. The Council of Ministers should pass a regulation on the maximum volume and value of energy which can be auctioned in 2016 by 31 August 2016. Therefore, the first real auction is expected to take place this year.