The amendment to the RES Act in its current shape will increase, not decrease the costs of energy for Poles, as it will support installations generating expensive energy. The cheapest renewable generation technology is wind, which also creates jobs and a number of economic benefits for the entire country. Meanwhile, the entry into force of the proposed regulations will result in layoffs of majority of the 8 thousand people currently employed in the wind industry, bankruptcy of many installations, and Poland’s failure to meet its RES target, causing enormous financial losses for the country.

According to the proposed regulations, the majority of renewable energy source installations (all with a capacity of 500 kW and above) will also lose their right to sell their generated electricity to the so-called Obliged Seller. – The lifting of the obligation to purchase electricity from RES for so many installations will result in a significant reduction of their revenues, which in turn will seriously affect profitability of projects. Such a situation could be avoided, if Members of Parliament and government representatives do not avoid an extensive process of consultation with representatives of all RES sectors present in Poland. Only in such a way it is possible to create stable and predictable conditions for investment without putting an excessive burden upon final consumers of electricity in Poland – said Wojciech Cetnarski, President of the Polish Wind Energy Association.

The entry into force of the amendment to the RES Act in its proposed form also brings the danger of non-utilization of part of the energy volume allocated to auction by the government. This results from the new shape of auction baskets, envisaging a breakdown of renewable sources by productivity (load factor) or CO2 emissions level, and not by energy generation cost, which should be the most important criterion for electricity consumers. There is also no provision allowing for transfer of unused volume in one technology basket to the other with more bids for cheap energy production. So if the volume of energy allocated to one basket in the auction is not covered by producers offering energy generation in particular technologies, it will not be used at all. Therefore the RES Act should make it possible to automatically transfer unused volume of energy in auction from one basket to another.

Moreover, the auction system should be designed in such a way that each technology basket receives a predictable guarantee of a certain percentage of electricity ordered by the government in auctions during a given year. This will prevent a situation where the investors do not know in advance if some of the baskets are to any volume and budget, resulting in certain technologies (e.g. wind or solar) being excluded from the auction.

The draft amendment to the RES Act also completely neglects the issue of enormous oversupply of green certificates, currently amounting to over 20 TWh. Their price is currently below 100 PLN/MWh, preventing virtually all RES installations from being profitable. In addition, the new provisions will worsen the situation even further, as they envisage a reduction of redemption of green certificates below the level of 20% guaranteed by the previously adopted RES Act. This will not only breach the acquired rights of investors who made their investment decisions based on the provisions of the Act of 20 February 2015, but will also cause a further slump in green certificate prices. This is even more of a concern, as the draft amendment restores the possibility of full support for cofiring, in the so-called dedicated multi-fuel firing installations. Thus, an additional number of new certificates will be injected into the already “closed” system, leading to even bigger oversupply. To prevent this, the obligation to redeem green certificates should remain on the level of 20% in the coming years, to eventually restore a relative market balance in 2021. The government should also consider the introduction of a continuous adjustment mechanism for the green certificates market, similar to the Swedish scheme, where the obligation quota is adjusted every 2 years.

The draft amendment of the RES Act also includes a penalty for failing to reach the “installed capacity utilization factor”, leading to double punishment for the same fault. Even in case of a small, unintended and insignificant (from the grid point of view) production of a volume of electricity smaller than agreed, the entire state aid for the 15-year support period will have to be returned. This kind of requirements is not present in any regulation of EU law or in any support scheme in the world. If an RES energy producer is supposed to repay the received state aid, it should only take place in proportion to the energy they failed to produce.

The Polish Wind Energy Association, declaring its willingness to fully cooperate with the Parliament and to support the MPs with specialized knowledge on wind power, has also prepared a number of amendments to the draft RES Act amendment, which, if adopted by the MPs, will prevent most of the dangers listed above. The issue of meeting Poland’s 2020 RES target remains purely in the hands of the government, and it will be the government’s full responsibility in that respect. Unfortunately, recent information from the Ministry of Energy regarding Poland’s progress in implementation of these targets shows that the Ministry of Energy does not have adequate data on possibilities of energy production from RES, or incorrectly interprets the data in its possession, which may lead to erroneous decisions on future development of renewable energy sources, including wind power.