The State of Wind Energy in Poland

21. July 2017 | Reading Time: 4 Min

Polish windmills have come through the worst year ever

A year has passed since the so-called distance law came into force and halted the development of the wind energy sector in Poland in an unprecedented manner, which is based on quiet, modern and efficient windmills, and faced many innovative businesses of the sector with spectre of bankruptcy. Freezing the development of the wind energy sector caused that the power installed on all renewable energy sources has increased just symbolically in recent months.

The Polish Wind Energy Association has presented the report “The State of Wind Energy in Poland in 2016” which is a specific compendium of knowledge on the situation in the Polish wind energy sector. The publication was prepared together with the TPA Poland advisory, Clifford Chance legal office, and the Polish Investment and Trade Agency. The report contains the comparison of the situation in Poland and abroad, as well as the presentation of legal and economic conditions which influence investments, the profitability analysis of wind installations, summary of the situation on the market of the offshore wind energy, and many other issues important for the current and future situation of renewable energy sources in Poland.

After a year of crucial changes in legal regulations governing the renewable energy sector in Poland, including particularly the wind energy sector, the lawmaker is not taking a break and is preparing more changes in the law. At the moment two bills amending the RES Act are being proceeded, one of which additionally is to change selected provisions of the so-called distance law. It is likely then that the legal environment of the wind energy sector in the nearest future will undergo further changes, and the report “The State of Wind Energy in Poland in 2016” is an excellent reference point which allows for better understanding of the direction of changes and placing them in a wider context – says Paweł Puacz, attorney-at-law at Clifford Chance.

Public consultations of the government bill of the amendment of the RES Act have come to an end. However, the situation of investors is getting worse every month hence the final shape of the regulations and the date of their coming into force is essential for the whole wind energy sector. At present, the bill is, on the one hand, a light in the tunnel forecasting, among others, the reinstatement of windmill taxation with the real estate tax according to the same rules which apply to other types of power plants. Nevertheless it still does not address two really important problems. – The first one is the oversupply on the market of green certificates which can be decreased only by additional actions. I am talking about the organization of auctions for existing wind power plants and maintaining the statutory level of the obligation to redeem certificates for 2018, and then the introduction of the so-called rolling obligation of redeeming the certificates of origin at the level of 17.4%, 18.4% and 19.4% in the following years (2019-2020). The second problem is the completely unjustified and discriminating withholding of the development of the wind energy sector by implementation of the strict minimum distance of windmills at the level of 10 times of the height of the whole installation. Such rules not only take away the right of the Poles to voice their opinions, and they should have the right to express their own standpoint also on the topic of wind power plants, but also those rules are also much stricter than the regulations applicable to mines or other types of power plants, whose impact on the environment is disproportionally greater than that of windmills – says Janusz Gajowiecki, the President of the Polish Wind Energy Association.

In the recent days, the MPs of the Law and Justice presented to the Sejm the second bill amending the RES Act, which concerns the changes to the manner of calculating the compensatory payment covered by energy companies instead of producing a specifically defined amount of green energy. It does not solve the problem of oversupply of green certificates however, and instead of improving the situation of RES installations, it may even deteriorate it. The black scenario has come true for all entities connected with the wind energy sector. Project profitability, decreased by the low price of certificates, has been completely crushed by another method of calculating the real estate tax. Banks are restructuring loans and calculating loses. Trust of investors in the economic policy of the State has been decisively undermined – summarizes Krzysztof Horodko, the Managing Partner at TPA Poland.

Download the report “The State of Wind Energy in Poland in 2016” free of charge.

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