Under the Renewable Energy Sources (RES) Act 2015, the Council of Ministers must annually set the maximum volume and value of electricity that can be sold at auction in the next calendar year and, at the minister of energy's request, the order in which the auctions will be held. On November 23 2016 the government published draft regulations setting out the maximum volume and value of electricity that can be sold at auction in 2017 and the order in which the auctions will take place.

Maximum volume and value of electricity to be sold at auction

The draft Council of Ministers regulation on the maximum volume and value of electricity from renewable energy sources that can be sold at auction in 2017 sets out the maximum volume and value of electricity that can be sold in the following auction categories.

RES installations operating before July 1 2016 The draft regulation provides as follows:

  • For installations with a capacity utilisation rate of more than 3,504 megawatt hours/megawatts (MWh/MW) per year and an installed capacity of up to 1 MW, the maximum volume and value of electricity to be sold at auction in 2017 is 1,659,047 MWh and PLN556,174,673, respectively.
  • For installations that emit no more than 100 kilograms (kg) of carbon dioxide per MWh and have a capacity utilisation rate of more than 3,504 MWh/MW per year and an installed capacity of up to 1 MW, the maximum volume and value of electricity to be sold at auction in 2017 is 784,122 MWh and PLN337,458,778, respectively.
  • For installations with a capacity utilisation rate of more than 3,504 MWh/MW per year and an installed capacity of more than 1 MW, the maximum volume and value of electricity to be sold at auction in 2017 is 10,502,338 MWh and PLN3,768,589,370, respectively.

RES installations that will start operating after close of relevant auctions The draft regulation provides as follows:

  • For installations with a capacity utilisation rate of more than 3,504 MWh/MW per year and an installed capacity of up to 1 MW, the maximum volume and value of electricity to be sold at auction in 2017 is 825,000 MWh and PLN308,182,262, respectively.
  • For installations that emit no more than 100kg of carbon dioxide per MWh and have a capacity utilisation rate of more than 3,504 MWh/MW per year and an installed capacity of up to 1 MW, the maximum volume and value of electricity to be sold at auction in 2017 is 540,000 MWh and PLN299,025,631, respectively.
  • For installations that use only agricultural biogas and have an installed capacity of up to 1 MW, the maximum volume and value of electricity to be sold at auction in 2017 is 8,190,000 MWh and PLN5,280,863,522, respectively.
  • For renewable energy installations belonging to categories other than those explicitly listed in the RES Act (ie, other auction categories specified in Article 3(3)(a),(1) in practice, this category will apply to wind farms and solar power plants) with an installed capacity of up to 1 MW, the maximum volume and value of electricity to be sold at auction in 2017 is 4,725,000 MWh and PLN2,182,908,687, respectively.
  • For installations with a capacity utilisation rate of more than 3,504 MWh/MW per year and an installed capacity of more than 1 MW, the maximum volume and value of electricity to be sold at auction in 2017 is 10,500,000 MWh and PLN5,423,952,758, respectively.
  • For installations that emit no more than 100kg of carbon dioxide per MWh and have a capacity utilisation rate of more than 3,504 MWh/MW per year and an installed capacity of more than 1 MW, the maximum volume and value of electricity to be sold at auction in 2017 is 540,000 MWh and PLN305,387,878, respectively.
  • For installations that use only agricultural biogas and have an installed capacity of more than 1 MW, the maximum volume and value of electricity to be sold at auction in 2017 is 3,510,000 MWh and PLN1,972,413,921, respectively.
  • For RES installations belonging to categories other than those explicitly listed in the RES Act (ie, other auction categories specified in Article 3(3)(a)) and with an installed capacity of more than 1 MW, the maximum volume and value of electricity to be sold at auction in 2017 is 5,175,000 MWh and PLN1,972,413,921, respectively.

The draft regulation also means that other RES installations which fall under other auction categories will not be allotted any electricity for 2017 (ie, in 2017 no auctions will be held for such types of installation). In particular, no auctions are planned in 2017 for wind farm projects already in operation.

Further, according to the draft regulation, renewable energy sources in Poland have been developing at an uneven pace with growth mainly in the wind energy sector. As a result, the government has decided to support underdeveloped RES technologies and the main focus will be on biogas, biomass and hydro power. Further, the development of solar power installations is recognised as an important factor from an energy supply security perspective (especially during summer).

According to the draft regulation – in light of the Ministry of Energy's October 17 2016 regulation on the reference price of electricity from RES in 2016 (Item 1765, Journal of Laws, 2016) – the proposed maximum volumes and values of electricity from renewable energy sources that can be sold at auction in 2017 should lead to the development of the following new capacities at the following RES installations:

  • 70 MW of new agricultural biogas plants with an installed capacity of up to 1 MW;
  • 30 MW of new agricultural biogas plants with an installed capacity of more than 1 MW;
  • 5 MW of new biogas installations at landfills with an installed capacity of up to 1 MW;
  • 5 MW of biogas installations at sewage treatment plants with an installed capacity up to 1 MW;
  • 100 MW of new dedicated biomass firing installations with an installed capacity of more than 1 MW;
  • 10 MW of new hydro power plants with an installed capacity of up to 1 MW;
  • 10 MW of new hydro power plants with an installed capacity of more than 1 MW;
  • 300 MW of new solar power plants with an installed capacity of more than 1 MW; and
  • 150 MW of new wind power plants with an installed capacity of more than 1 MW.

Order of conducting auctions

Under the draft Council of Ministers regulation on the order of conducting auctions for the sale of electricity from RES in 2017, auctions will focus on existing:

  • biogas installations at landfills;
  • biomass firing installations; and
  • small-scale hydropower plants.

Further, according to the draft regulation, the proposed order for conducting auctions is designed to hold auctions for RES installations with a large supply of projects (and therefore greater competition).

Under the draft regulation, auctions in 2017 should be conducted in the following order:

  • auctions for installations that:
    • have a capacity utilisation rate of more than 3,504 MWh/MW per year and an installed capacity of up to 1 MW; and
    • started operating before July 1 2016;
  • auctions for installations that:
    • emit no more than 100kg of carbon dioxide per MWh;
    • have a capacity utilisation rate of more than 3,504 MWh/MW per year and an installed capacity of up to 1 MW; and
    • started operating before July 1 2016;
  • auctions for installations that:
    • have a capacity utilisation rate of more than 3,504 MWh/MW per year and an installed capacity of more than 1 MW; and
    • started operating before July 1 2016;
  • auctions for RES installations that:
    • belong to categories other than those explicitly listed in the RES Act (ie, other auction categories specified in Article 3(3)(a));
    • have an installed capacity of more than 1 MW; and
    • will start operating after the relevant auctions close;
  • auctions for installations that:
    • have a capacity utilisation rate of more than 3,504 MWh/MW per year and an installed capacity of up to 1 MW; and
    • will start operating after the relevant auctions close;
  • auctions for installations that:
    • emit no more than 100kg of carbon dioxide per MWh;
    • have a capacity utilisation rate of more than 3,504 MWh/MW per year and an installed capacity of up to 1 MW; and
    • will start operating after the relevant auctions close;
  • auctions for installations that:
    • emit no more than 100kg of carbon dioxide per MWh;
    • have a capacity utilisation rate of more than 3,504 MWh/MW per year and an installed capacity of more than 1 MW; and
    • will start operating after the relevant auctions close;
  • auctions for installations that:
    • have a capacity utilisation rate of more than 3,504 MWh/MW per year and an installed capacity of more than 1 MW; and
    • will start operating after the relevant auctions close;
  • auctions for installations that:
    • use only agricultural biogas;
    • have an installed capacity of up to 1 MW; and
    • will start operating after the relevant auctions close;
  • auctions for installations that:
    • use only agricultural biogas;
    • have an installed capacity of more than 1 MW; and
    • will start operating after the relevant auctions close;
  • auctions for RES installations that:
    • belong to categories other than those explicitly listed in the RES Act (ie, other auction categories specified in Article 3(3)(a));
    • have an installed capacity of up to 1 MW; and
    • will start operating after the relevant auctions close.

For further information on this topic please contact Grzegorz Filipowicz at Norton Rose Fulbright Piotr Strawa and Partners, LP by telephone (+48 22 581 4900) or email (grzegorz.filipowicz@nortonrosefulbright.com). The Norton Rose Fulbright website can be accessed at www.nortonrosefulbright.com.

Endnotes

(1) The other auction categories specified in Article 3(3)(a) of the RES Act are:

  • RES installations with a capacity utilisation rate of more than 3,504 MWh/MW per year;
  • RES installations which use the biodegradable portions of industrial and municipal waste to generate electricity, including water and sewage treatment waste – in particular, the use of sewage sludge in a waste incineration plant;
  • RES installations which emit no more than 100kg of carbon dioxide per MWh and have a capacity utilisation rate of greater than 3,504 MWh/MW per year;
  • members of energy clusters (this category will come into force on July 1 2017);
  • members of energy cooperatives (this category will come into force on July 1 2017); and
  • RES installations using only agricultural biogas.

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