Due to the current situation in Poland and many other countries, caused by the COVID-19 pandemic, the Polish Wind Energy Association has prepared an opinion on auctions for the sale of electricity from renewable sources.

 

In the current situation, PWEA recommends carrying out:

1. one RES auction round in 2020, with a total volume and budget indicated in the regulation of 2019
2. further RES auctions in 2021, with a minimum total volume and budget equal to those specified in the regulation of 2019. In case of 2021 auctions, however, it would be advisable to divide the total volume into two RES auction rounds, according to the assumptions of January 2020.

 

According to PWEA, RES auctions planned for the first half of 2020 will face difficulties due to the epidemic situation.

Below we present the arguments:

• We are currently facing major problems related to administrative procedures. The current situation is hindering the timeliness of administrative activities and the issuance of relevant documents and permits by local government bodies.
• Extension of the auction announcement will allow the investors to prepare the auction prequalification applications. The Energy Regulatory Office will thus gain more time to carry out the prequalification procedures.
• There have been clear disruptions in the supply chain of RES installation components. There are also limitations in cooperation with business partners on local and international markets. This is related to restrictions to free movement for subcontractors and partners. Therefore, equipment suppliers are unable to declare delivery times for installation components. It is also impossible to specify the schedules for assembly and commissioning of new installations in renewables, including wind.
• The current situation raises various concerns about the project funding policy of financial institutions. The banks are currently reviewing their future loan policies in the changed economic conditions. A large share of investment projects under the RES auction scheme is built based on bank loans. Therefore it would be justified to postpone the auction until the end of the year.

 

It is also reasonable to limit the number of auctions in 2020 to one round, to be carried out in the 4th quarter. The next auction should be carried out in 2021.

We also believe that the prolonged uncertainty as to the economic situation and postponing the planned auctions would constitute negative signals for the entire energy market. Stabilization in the RES market would lead to lower energy prices and help stabilize the economic situation in Poland as a result.

Download the full version of PWEA’s position paper on RES auctions in 2020-2021