Poland: Energy Legal Alert - May 2013
Government critical of proposed stricter rules on wind farms
Currently, the Sejm is to review the deputies’ draft of the law amending the construction law and the law on spatial planning and management. The draft law was introduced to the Sejm on 30 July 2012 and provides for a variety of restrictions on the locations of wind turbines. For instance the distance of wind turbines from residential areas should be at least 3 km and the wind turbines with a capacity of over 100 kW will not be allowed to be built on the basis of a decision on land development and management conditions.
On 25.04.2013 the Council of Ministers gave its opinion on the draft law. In this opinion it evaluated the proposed amendments negatively and considered them altogether inexpedient. According to the Council of Ministers the proposed regulations of the construction law aimed at a change of the established provisions (e.g. the proposed extension of the definition of the term "building" in the construction law on “the wind turbines with a capacity of over 500 kW”) or they only contained the repetition of the existing regulations (e.g. the planned authorization of the Minister of the Environment to issue a regulation on the technical conditions for wind turbines with a capacity of more than 500 kW). In the opinion of Council of Ministers the introduction of special rules on wind turbines in the law on spatial planning and management would be premature at the present time. Such changes should be carried out as part of a complex system reform and also should comprehensively regulate the principles on locations of facilities for production of energy from renewable energy sources.
Given the above, it is expected that the deputies’ draft law amending the construction law and the law on spatial planning and management will be rejected by the Sejm. Against this backdrop, an alternative draft law, which may also affect the locations of wind turbines, will grow in importance. It is the draft law of 21.05.2013, prepared by the presidential chancellery, amending some laws in order to strengthen the instruments of the landscape protection. This draft provides for inter alia special rules for the so-called landscape dominants that are to protect Polish landscape and as such will surely be qualified the wind turbines.
New solutions to the problem of oversupply of certificates of origin
The draft law on renewable energy sources (“RES”) is currently still in the Ministry of Economic Affairs and the internal departmental works continue. One of the points of the RES draft, which will be discussed intensively, are the various approaches to eliminate the oversupply of green certificates.
Since the European Commission’s notification of the RES is required, the proposed solutions contained in the RES draft can be effective only with a strong delay.
According to Janusz Pilitowski, director of the Department of Renewable Energy in the Ministry of Economic Affairs, therefore it may be of advantage to consider the adoption of the following solutions in the form of amendments to the Energy Law: removing the support for large, amortized waterworks, limiting the support for energy facilities, that use a lot of fuels, obligation of submitting green certificates within 24 months from their issuance, eliminating the possibility of payment of substitution fee for a drop in the prices of certificates of origin to below 75% of the value of the substitution fee, obligation for new renewable energy facilities to sale the certificates on the energy exchange, limiting the support with certificates of origin for wind turbines.
According to Janusz Pilitowski the implementation of these solutions could lead to a liberation of the market of certificates of origin in a value of about 4-5 TWh. Consequently, the prices could draw close again to the amount of the substitution fee. At the same time above mentioned solutions would prevent any retention of certificates of origin as well as the emergence of large price differences on the energy exchange and the bilateral market. This would counteract the re-emergence of oversupply.
According to Janusz Pilitowski these envisaged changes of the energy law will not affect the progress of works on the RES.
Classification of wood and wood material in the context of support for renewable energy sources
Pursuant to the regulation of the Minister of Economy of 31 December 2012 concerning the detailed scope of obligations to obtain and present for redemption the certificates of origin, pay the substitute fee, purchase electricity and heat generated from renewable energy sources as well as the obligation to confirm the data on the amount of electricity generated from a renewable energy source, electricity and heat generated from healthy wood of full value are not regarded as energy from renewable sources. Due to the above regulation coming into effect, on 20 May 2013, the President of the Energy Regulatory Office issued a notice concerning the documents that can constitute evidence in the procedure for issuance of a certificate of origin confirming that no healthy wood of full value has been used in the specific generation facility in which biomass is burnt.
In accordance with the notice of the President of the Energy Regulatory Office, documents such as VAT invoices, export documents, wood sale/purchase contracts constitute evidence as to what grade of wood has been used by the entity applying for issuance of a certificate of origin. The probative value of the documents submitted by the entrepreneur will be assessed during the procedure for issuance of a certificate of origin before the President of the Energy Regulatory Office. In the event that the investor fails to demonstrate that no healthy wood of full value has been used in the generation facility in which biomass is burnt, he/she will be refused the certificate of origin.
Photovoltaic installation building permit
On 18 February 2013, the position of the General Office of Building Control and the Ministry of Transport, Construction and Maritime Economy concerning the obligation to obtain a photovoltaic installation building permit was published on the website of the General Office of Building Control. The position was published due to the absence of transparent provisions regarding the obligation to obtain a photovoltaic installation building permit and the increasingly more frequent construction of large photovoltaic farms located over sizeable areas without first obtaining a building permit. Pursuant to the position published on the website of the General Office of Building Control, assembly of photovoltaic cells connected to an electrical network and used to generate electricity for the purpose of its further distribution (the so-called photovoltaic farm) should be regarded as construction of a building structure, and thus the investor is obliged to obtain a building permit to construct it. At the same time, it has to be pointed out that to classify the abovementioned project as a building structure, it is sufficient to connect at least one of the photovoltaic cells to an electrical network.
This means that the building permit will also be required for construction of installations on building structures not exceeding 3 m in height, provided that the installation is to be connected to the operator’s electrical network. For installations where the generated electricity is to be used exclusively for own purposes, it will not be necessary to obtain a building permit.
In view of the currently applicable law, it is difficult to validate the above position of the General Office of Building Control. Perhaps the issue will be resolved following the coming into effect of the so-called small energy tri-pack. Pursuant to the draft amendment to the energy law, building permits will not be required for photovoltaic installation with a capacity of up to 40 kW. This means that a building permit will have to be obtained for all installations with a capacity exceeding 40 kW.
Substitute fee in 2013 and the average electricity price on the competitive market
On 26 February 2013, the President of the Energy Regulatory Office announced the amount of the adjusted substitute fee per unit applicable for 2013, bearing the Ozj symbol, as referenced in Art. 9a sec. 2 of the energy law. Pursuant to Notice no. 3/2013 of the President of the Energy Regulatory Office, the substitute fee for 2013 amounts to PLN 297.35.
Pursuant to Notice no. 8/2013 of 28 March 2013 concerning the average sale price of electricity on the competitive market for 2012 issued by the President of the Energy Regulatory Office, the average sale price of electricity on the competitive market for 2012 amounted to PLN 201.36 per 1 MWh.
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