The draft Act on the amendments to the Act of February 10, 2015 on Renewable Energy Sources (as at March 6, 2018) was sent to the Sejm – the lower chamber of the Polish Parliament at the end of March and is at an initial stage of a legislative procedure thereby (i.e. being discussed by the Commission on the Energy and State Treasury) since April 11, 2018. In view of the obligation to complete all auctions by 30 June 2021 (in accordance with the decision of the European Commission) and to organise at least one auction a year, there is a chance that the works on the draft will be accelerated to announce the next auction as soon as in 2018. Please find a presentation of the selected changes under the draft Act below.

Wind energy – real estate tax and building permit

One of the most important changes is the re-introducing of the real estate tax in its previous value (i.e. tax on the building part of a wind power plant only) as soon as from January 1, 2018, which is Poland’s obligation towards the European Commission. As regards other changes, the building permits issued before July 16, 2016 and on the basis of procedures started and not completed by that date (as the effective date of the so-called distance act [i.e. the Act as of May 20, 2016 on wind power plants investments]) will remain in force two years longer.

A building permit for a wind power plant will remain in force provided that the occupancy permit is issued within five years starting from July 16, 2016 (i.e. by July 16, 2021). A completed part of a power plant will have to be demolished if the building permit expires due to the expiry of the aforementioned period and where a new or replacement building permit is not obtained for the power plant within one year from the expiry of the previous permit.

Wind and solar energy – RES auctions

In 2018, the legislator still does not envisage any auction for existing or modernised windor  solar energy. At the same time, auctions for the ‘new’ wind (along with ‘new’ solar installations) are to be announced.

Definition of the RES installation and a clear exclusion of a simultaneous use of two support systems

The definition of the RES installation will be changed by a replacement of the prerequisite of “power offtake” with the prerequisite of “description with technical and commercial data” and deletion from the definition of the possibility to “generate heat” in addition to generation of energy. It was also explained that electricity produced in an installation may use one support system only (there were doubts regarding the existing RES installations) and that the period of the right to cover the negative balance (i.e. a period of 15 years from the first energy generation, confirmed with a certificate of origin) should be counted from 1 October 2005 at the earliest.

Impact of the investment state aid on the right to cover negative balance

An important change concerns the terms of calculating the state aid and its impact on the price offered by a producer at an auction. In accordance with the Article 39 of the amended RES Act, the right to participate in a RES auction and the maximum energy price which a producer will be entitled to offer at the auction will no longer depend on the total value of the state aid received by that producer. The investment aid will, however, reduce the auction price and such adjusted price will then constitute the basis for the payment of the so-called negative balance (i.e. difference between the sale value of electricity and adjusted price-based value of electricity). If positive balance arises, in particular as a result of the value of the investment aid granted to a producer, it will be settled against the future negative balance or returned to the renewable energy settlement operator.

Precise provision and imprecise provision

Finally, the conditions for winning an auction, which are set out in the Article 80 (1), will be specified more precisely. An auction will be won by participants who offer the lowest sale price of electricity from RES (reduced by VAT) and whose offers do not exceed in aggregate 100% of the value of electricity from renewable energy sources specified in the auction notice and 80% of the quantity of electricity included in all offers.

However, an imprecise provision of the Article 72a (1) will be introduced, which may be interpreted as an obligation to sell the energy produced by the end of 2020 on the power exchange.

Waiting for the adoption of the Act and the announcement of the auction, we will keep you updated on any further significant amendments to the draft Act at the stage of parliamentary works.