Amendment to the act on the protection of agricultural and forest land is signed

On 16 April 2013, the President of the Republic of Poland signed the act of 8 March 2013 amending the act of 3 February 1995 on the protection of agricultural and forest land. The amendment to the act aims to introduce changes designed to increase the transparency of the provisions of the act on the protection of agricultural and forest land, as well as dispel the interpretational doubts that had arisen with respect to construal of the term “proposed contiguous area” (PL: zwarty obszar projektowany).

At the moment, if the agricultural and forest land intended for change of use constitutes class I – III arable land and if its contiguous area proposed for such use exceeds 0.5 ha, then changing the use of agricultural and forest land to non-agricultural and non-forest use is carried out within the local spatial development plan. Additionally, the consent of the Minister of Agriculture and Rural Development is required to change the use of land in such a case.

The amendment introduces a rule under which changing the use of all agricultural land (irrespective of the area) that constitutes class I – III arable land to non-agricultural and non-forest use requires that the consent of the minister responsible for rural development is obtained. This rule is to be applicable irrespective of the area of the land intended for exclusion.

The entry into effect of the amended act on the protection of agricultural and forest land will in practice result in the inability to obtain a land development decision for wind farms located in areas with high quality soils. Pursuant to the act on spatial planning and land development, it is possible to issue a land development decision if no permit to change the use of the land from agricultural and forest to non-agricultural and non-forest is required. In such instances, erection of wind turbines will only be possible based on the provisions of the local spatial development plan.

The “small tri-pack” to introduce a schedule for connection to the power grid

Pursuant to the new regulations of the parliamentary draft of the act amending the Energy law act, arising from the report of the special subcommittee of the Economics Committee dated 5 March 2013, the catalogue of provisions that have to be included in a grid connection agreement will be extended by, amongst others, the obligation to set a schedule for connection of an installation to the grid. The intended schedule for connection to the grid taking into consideration individual stages and providing a summary of intended work will have to be specified as early as within the statement of conditions for connection.

Pursuant to the draft amendment to the act, the connection agreement will additionally have to include provisions setting out the rules for the parties’ liability for delays in performance of the work in relation to the time limits set out in the agreement, i.e. also in relation to the time limits specified in the schedule for connection to the grid. This change seems to be a positive one, as it will ensure that the entity to be connected will be able to enforce the timely execution of the connection work schedule by the power grid operator on the basis of the connection agreement. Unfortunately, as regards connection agreements that have already been concluded but are yet to be performed, the amendment to the Energy law act in the proposed wording carries a high risk that the connection agreement is terminated prematurely.

Pursuant to the transitional provisions, all connection agreements concluded prior to the date of entry into effect of the amendment to the act yet to be performed will have to be modified in view of the provision imposing the obligation to draw up a schedule for connection to the power grid within 6 months from the date of entry into effect of the “small tri-pack”. In the event of failure to modify the connection agreements as per the requirements of the act, each of the parties to the connection agreement will have the right to withdraw from the agreement with no legal consequences, unless the failure to modify the agreement took place due to circumstances attributable to the party. The “small tri-pack” draft is currently being worked on by the Parliamentary Economics Committee.

Will the next draft of the Renewable Energy Sources act reduce support for large-scale PV projects?

The draft RES act is currently being amended at the Ministry of Economy. Firstly, the department of economy is working to include in the draft RES act the comments submitted by other departments, such as the Ministry of Finance and the Ministry of Treasury.

As per the announcements of Janusz Pilitowski, Director of the Renewable Energy Division at the Ministry of Economy, the amendments to the draft RES act will include reduction of the level of support for certain RES technologies. The changes will apply to, amongst others, support for photovoltaic energy sources. As per the announcements of the Minister of Economy, the amended draft will limit the ability to use subsidies for photovoltaic installations with a capacity exceeding 2 MW. As a consequence of introduction of the above changes, photovoltaic farms with a capacity of up to 2 MW will be the only ones seen in Poland.

The new draft of the RES act is additionally to introduce limitations as regards support for photovoltaic installations if a specific number of farms is erected. As per the announcements, in the event that the total installed capacity of photovoltaic installations following from the issued licenses exceeds 500 MW, the corrective coefficients for electric energy for new installations will amount to 75% of the values as set out by law, whereas upon exceeding 800 MW, the corrective coefficients will amount to respectively 50%.

Furthermore, the Ministry of Economy is considering whether to introduce regulations prohibiting the division of PV projects. An entity intending to connect to the grid a free-standing PV installation can apply for connection of the installation, provided that the distance between another, already connected, free-standing PV installation and the installation to be connected to the grid is at least 2000 metres, and at least 24 months have passed since connection of the earlier installation. In practice, the above regulation will make it impossible for large-scale PV farms to divide into smaller ones for the purpose of circumventing the law and obtaining larger subsidies.

It is not clear to what extent the announcements of the Ministry of Economy will be implemented in the new draft RES act. Another conference is to take place at the Ministry of Economy on 7 May 2013 regarding the market of certificates of origin entitled “Problems within the instable market of certificates of origin and energy from renewable energy sources”. It is possible that further information in respect of the intended changes regarding PV installations will be presented during the conference.

The information in this publication should not be relied upon to replace professional advice on specific matters. We are happy to advise you on individual legal matters.

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