Support for renewables in the time of COVID-19

Poland

In the time of the Coronavirus (COVID-19) pandemic many renewable energy producers may face delays in the completion of the pending projects that won the auctions within the subsidy scheme. For now, there are no tools in the Act on Renewable Energy Sources (“RES Act”) that would help the producers that won the auction but has not commenced sale of energy within the auction system in the event of force majeure. However, the government plans to introduce special measures to support renewable energy sector.

Currently, according to the RES Act, producers who have submitted the winning offers in the auction for the sale of electric energy from new or modernised RES installations are obliged to commence sales within the auction system for the first time from the date on which the auction session ends within:

  • 33 months in the case of onshore wind farms,
  • 24 months in the case of photovoltaic projects,
  • 72 months in the case of offshore wind farms,
  • 42 months in the case of other types of RES installations.

The RES Act does not provide for any exceptions to this rule; hence, the deadline cannot be postponed even considering the coronavirus (COVID-19) pandemic.

For now, the RES Act sets forth that in the case that the producer does not meet the deadline, it will be subject to the following sanctions:

  • it will lose the right to benefit from the auction system;
  • it will not be allowed to participate in the next auctions in the following 3 years after not meeting the deadline;
  • the deposit paid to the President of Energy Regulatory Authority (“the President of ERA”) will be forfeited.

However, as mentioned above, the draft of the so-called Anti-Crisis Shield Act (“Draft Act”) provides the President of ERA with the right to extend those deadlines for the electric energy producers in the auction subsidy scheme.

The extension may be done at the request of the producer. The President of ERA takes into account, in favour of the energy producer, the circumstance where one or more of the following delays is due to the state of epidemic emergency or the state of epidemic announced in the regulation of the Minister of Health:

  • a delay of the supplies of equipment included in the renewable energy installation,
  • a delay of the supplies of elements necessary for the construction of a renewable source installation,
  • a delay in the implementation of the project regarding the renewable energy installation and grid connection,
  • a delay during the acceptance or commissioning of a renewable energy installation, and/or
  • a delay in obtaining a licence or entry in the relevant register.

In the event of the circumstances listed above, the President of ERA issues a decision (pl. postanowienie) on an extension of the deadline for the first sale of the electric energy within the auction support system. The extension may be granted for an additional period indicated in the producer’s application, but no longer than 12 months from the original day for fulfilment of the said obligation. The extension of the deadline may be done by the President of ERA only once.

The application for the extension shall be submitted to the President of ERA no later than 30 days before the deadline for the first sale of energy within the auction system. The application shall consist of:

  • the name and address of the producer’s registered office,
  • a specification of the period for extension of the deadline for the first sale of the electric energy within the auction support system,
  • an indication of the name and ID of the installation to which the application refers,
  • a statement confirming that the delay in the delivery of these devices or the commissioning of the installation is caused by the circumstances listed above; the statement shall be given by:
    • the supplier or the suppliers of equipment included in the renewable energy installation or
    • the applicant,
  • updated works and financial schedule,
  • an updated bank guarantee, which shall be extended for the period indicated in the application.

As the circumstances are extraordinary, the President of ERA will not issue the decision on an extension if:

  • the application does not fulfil the conditions set forth above,
  • the producer submitted the application later than 30 days before the deadline for the first sale of energy,
  • none of the circumstances indicated above occurred.

However, the decision of the President of ERA refusing to extend the deadline may be appealed to the Court of Competition and Consumer Protection in Warsaw within 7 days from delivery of the decision.

These amendments proposed in the Draft Act will apply in the case of the producers that won the auction before the entry into force of the Anti-Crisis Shield Act. This is the first draft proposal. No official and binding act has been published yet.