Changes in renewables support system in Poland

On 9 August 2019 the President of the Republic of Poland signed the act of 19 July 2019 amending the act on renewable energy sources and certain other acts (“RES Act Amendment”). It was officially published in the Journal of Laws on 14 August 2019.

The RES Act Amendment (with some minor exceptions) will come into force on 29 August 2019 (i.e. after the lapse of 14 days from its publication in the Journal of Laws). The RES Act Amendment in particular introduces the following improvements:

• an extension of the deadline for selling the electricity generated by a RES installation for the first time from 36 months to 42 months after the respective RES auction closes and with respect to: a) solar power plants - from 18 months to 24 months, b) onshore wind power plants - from 30 months to 33 months, after the respective RES auction closes;
• a clarification of the provision allowing a RES producer that is planning to participate in an auction for new RES installations to generate electricity from such RES installation for the first time before the relevant auction closes (however not later than by 31 December 2020) without losing the right to participate in such auction for new RES installations provided that the producer: (i) sells the whole volume of electricity fed into the grid and the value of such volume does not exceed the value based on TGeBase index; and (ii) notifies the President of ERA about it;
• a removal of the requirement to submit an environmental decision and excerpts from local zoning plan during the pre-qualification procedure as redundant due to the submission of a construction permit;
• clarifying that the bid shall state the "planned" term when a RES producer benefits from the auction support scheme and "planned" volumes of the electricity allocated to given calendar years. The reference to “planned” is made to reflect the possibility of one-time modification (update) to the bid after winning the auction (described in details below);
• for producers planning to participate in auctions in 2019 and 2020 - a right to postpone the deadline for feeding the electricity into the grid for the first time under existing grid connection agreements by 30 June 2021 upon the producer’s request made within 3 months from the entry into force of the RES Act Amendment (i.e. by 29 November 2019);
• new requirement for issuing a generation licence with respect to RES installation regarding the manufacture date of the devices forming part of such RES installation - from 1 January 2020 it will be necessary to evidence that such devices comply with the requirement set forth in the RES Act or provide the President of ERA with valid documents certifying their conformity with relevant norms, and in any case such devices shall not been manufactured earlier than 72 months before the first electricity generation;
• modification to the act on investments in the field of wind turbines of 20 May 2016 which hitherto set forth that construction permits for new wind power plants, issued before 16 July 2016, remain valid only if by 16 July 2021 a usage permit for such projects is issued. The RES Act Amendment, modifies this stringent rule by providing additional time for completing the projects. Namely, with respect to construction permits that will not obtain a usage permit by 16 July 2021 the general rules of Polish Construction Law of 7 July 1994 regarding the expiry of construction permits will apply with an exception that the deadline for the commencement of the construction works is counted from 16 July 2021 and not from the date when the construction permit has become final. The wording of the RES Act Amendment in this respect is, however, ambiguous and various interpretations are possible.

The effectiveness of certain provisions of the RES Act Amendment is subject to the European Commission positive decision regarding state aid (standstill clause). Until such decision is issued, the current regulation shall still apply. It pertains to the following amendments:

• an extension of the time limit required for manufacturing the devices to be installed in a RES installation in order to participate in the auction support scheme from 36 to 42 months before the first electricity generation in the RES installation and with respect to: a) solar power plants - from 18 months to 24 months, b) onshore wind power plants - from 24 months to 33 months, before the first electricity generation in the RES installation;
• an extension of the end date of the auction support scheme – from 31 December 2035 to 30 June 2039;
• a procedure allowing one-time modifications (updates) to the bid after winning the auction (not later than 30 days before applying for the first time for the settlement of a negative balance) with respect to: (i) the planned date for selling the electricity for the first time; (ii) the volumes of the electricity allocated to given calendar years in the bid, and (iii) the total installed capacity of the RES installation; provided that the total volume of electricity and the support term specified in the bid do not change and that the change to the total installed capacity does not affect the primary classification to the relevant auction.

In general, with respect to electricity producers whose bids (RES installations) won the auction prior to the entry into force of the RES Act Amendment, the old provisions of the act on renewable energy sources of 20 February 2015 shall apply. Nevertheless, the RES Act Amendment provides for some exceptions to this rule, inter alia such producers will be allowed to modify (update) their bids as described above provided that the European Commission issues a positive decision regarding the state aid.

Finally, the RES Act Amendment specifies the maximum volumes and values that can be sold in the auctions in 2019 both for new RES installations and existing ones. With respect to the new onshore wind projects and solar power plants with a total installed capacity:

• up to 1 MW a volume of 11,445,000 MWh with a value of PLN 4,213,650.00 is provided, and
• higher than 1 MW a volume of 113,970,000 MWh with a value of PLN 32,577,000,000.00 is provided.