At the end of December, 2011, the Ministry of Economy in Poland finally presented a package of three draft acts aimed at complex regulation of the energy sector: the new Energy Law, the Gas Law and the Act on Renewable Energy Sources. All drafts are at the initial stage of legislative process and it is certain that the final wording of the acts will differ from the wording of the drafts presented in December.
The draft of the Act on Renewable Energy Sources seems to be the most controversial one.
In principle, the draft of the Act on Renewable Energy Sources sustains the existing system of support for the renewable energy sources – based mainly on issuing and an obligation of redemption of specified amount of green certificates. The draft however raises concerns of some entrepreneurs from the renewable energy sector, because it provides for differentiation of the level of support, depending on the type of the renewable energy source and the time of when its exploitation was commenced.
Differentiation of the level of support is going to be effected by introduction of indexes (for each type of source). This will influence the value of green certificates issued for the energy produced in the given source. What is interesting, the differentiation in levels of support depending on the type of source is not defined in the draft of the Act on Renewable Energy Sources – it will be be specified in the regulation issued by the Ministry of Economy. Moreover, the regulation specifying the levels of support will be issued every three years (taking into account market conditions), so the levels of support may be changed relatively easy.
The Ministry of Economy has not yet presented a draft of this regulation. There were only unofficial presentations of the planned levels of support. According to them – we can be expect the increased support for solar power and small biomass power plants, and decreased support for power plants using biomass combustion together with other fuels and for large on-shore wind farms.
The other proposal that was included in the draft of the Act on Renewable Energy Sources specifies that the green certificate will be valid for up to a period of 15 years. The major aim that lies behind the regulation of the validity period for green certificates is said to be the stabilization of the system of support of renewable energy sources. In my opinion, this solution, indeed, can contribute to this goal. On the other hand, the planned differentiation of the level of support and its potential changeability may certainly decrease the levels of this stabilization.
The draft of the Act on Renewable Energy Sources is a starting point for discussion. Public consultations of the draft are underway.
Let us hope that during the legislative process, the arguments of entrepreneurs and lawyers will be taken into account, and the legislative work will result in a quality piece of legislation – reached through a compromise between public and private interests of different stakeholders.
I am looking forward to your comments on this proposed draft!
Agata Bator is a legal advisor and Senior Associate at Domański Zakrzewski Palinka sp.k. She is a member of the team that advises companies in the gas, energy, heating and fuel sectors. She deals particularly with providing full-range advisory to clients in the cogeneration and renewable energy sector. Agata also advises on M&A projects, especially at the due diligence stage and company restructuring.