New market mechanisms for renewables in Poland. Opportunity or threat?

Transcription

1 New market mechanisms for renewables in Poland. Opportunity or threat? Adam Jodłowski Deloitte Legal, Pasternak, Korba i Wspólnicy Kancelaria Prawnicza sp. k. Vienna 6 June 2013

2 Agenda I Overview of Polish renewable energy sources market (electric energy). II Outline of regulatory environment for renewables in Poland (electric energy). III Upcoming changes to regulatory environment. IV Conclusions. Potential impact of changes on the renewables market. 2

3 Overview of Polish renewable energy sources market Capacity of installed renewable energy sources in Poland (electric energy) Source type Biogas 103,49 MW 131,25 MW Biomass 409,680 MW 820,7 MW Photovoltaic 1,12 MW 1,3 MW Wind farms 1 616,36 MW 2 496,75 MW Hydro plants 951,39 MW 966,1 MW Total 3 082,043 MW 4 416,09 MW Y/y increase 525,62 MW 1334,04 MW Data published by Polish regulator (URE). Overall capacity in 2012 Essentials 22% 3% 19% Ø Poland has virtually no photovoltaic sources; 0% Biogas Biomass Photovoltaic Wind farms Ø In 2011/2012 Poland had 42 % increase of renewable energy sources capacity; 56% Hydro plants Ø These statisitics do not include co-firing of biomass. 3

4 Overview of Polish renewable energy sources market Production of green energy from particular sources (electric energy) Source type Biogas MWh MWh Biomass MWh MWh Photovoltaic 177 MWh 1048 MWh Wind farms MWh MWh Hydro plants MWh MWh Co-firing of biomass MWh MWh Total MWh MWh Data published by Polish regulator (URE). Overall green energy production in % 3% 14% 9% 0% 30% Biogas Biomass Photovoltaic Wind farms Hydro plants Co-firing of biomass Essentials Ø Biomass sources (cofiring biomass with fossil fuels) amounts to ~55 % of overall green energy produced in Poland; Ø 3,6 GW of renewable energy sources that do not require firing biomass stand for ~45 % green energy production in Poland; 4

5 Overview of Polish renewable energy sources market Micro-generation and green energy production target Increase of percentage of green energy in overall energy sold to end users in legal regula4ons in Poland Data published by Polish regulator (URE). Essentials green energy development Source type Number of concessions issued by Polish regulator (URE) Biogas 156 Biomass 19 Photovoltaic 526 Wind farms 746 Hydro plants 47 Total 1515 Data published by Polish regulator (URE). Essentials microgeneration Ø Polish regulations governing certificate system assume that by year 2020 green energy sold to end users will amount to 19 % of total sold energy; Ø To meet the 19 % target Poland would have to increase its current green energy production by approx % by year Ø Each green source needs a concession to participate in support system; Ø Number of issued concessions shows that currently development of microgeneration of electric energy in Poland is very limited. 5 5

6 Outline of regulatory environment for renewables in Poland (electric energy) Sources of revenue of renewables Sale of green energy Sale of green certificates Ø Certain energy firms are liable to buy all green energy produced on the territory of their activity; Ø Law guarantees the minimum level of price of green energy (set annually, in 2013 it is 201 PLN approx. 50 EUR). Ø Green certificate = tradable security; Ø 1 MWh of produced green energy = 1 green certificate; Ø Each supply undertaking is liable to redeem 1 green certificate for a certain % of each sold MWh (currently 12 %; up to 19 % in year 2020). Ø Each certificate not redeemed payment of 297,35 PLN (approx. 75 EUR); 6

7 Outline of regulatory environment for renewables in Poland (electric energy) Revenue resulting from certificates Ø Support for each source is set on identical level; Ø Radical decrease of prices of certificates in the last 12 months; Ø Risk of insolvency; Ø Difficulties with financing. Data published by Polish commodity stock exchange (TGE). Ø There generally are no preferences for micro0generation other than general ones; Ø Necessity to obtain concession regardless of capacity; Microgeneration Ø Virtually the same formalities need to be fulfilled to produce energy in micro-source as in respect to huge sources; Ø Registration of business activity. 7

8 Upcoming changes to regulatory environment Ø Novelisation of the Energy Law Act; Ø Expected to come into force in Small Tri-Package Microgeneration Grid Ø Producing energy with micro-sources will not be considered a business activity (considerably less formalities required to produce energy); Ø In some cases connecting a microsource by end user will require only a notification (no separate connection agreement); Ø No fee for connecting a micro-source. Ø Termination of old and unutilized connection agreements; Ø Connection terms will include a schedule of connection and outline of required connection works; Ø Regulations leading to increased transparency in respect to plans of the operator on development of grid. 8

9 Upcoming changes to regulatory environment Upcoming changes to regulatory environment Big Tri-Package Ø Expected to come into force in Ø Higher support for particular technologies and micro-generation; Ø Expected to come into force in Source type Coefficient x est. cert. price Est. energy price Est. total/mwh Wind farms - < 0,5 MW 1.20x(270 PLN/68 EUR) 200 PLN/50 EUR 524 PLN/131 EUR Wind farms > 0,5 MW 0.90x(270 PLN/68 EUR) 200 PLN/50 EUR 443 PLN/111 EUR Off-shore wind farms 1.80x(270 PLN/68 EUR) 200 PLN/50 EUR 686 PLN/172 EUR PV plants of 0,1-1 MW 2.85x(270 PLN/68 EUR) 200 PLN/50 EUR 970 PLN/243 EUR PV plants of 1-10MW 2.45x(270 PLN/68 EUR) 200 PLN/50 EUR 861 PLN/215 EUR Biomass dedicated 0.95x(270 PLN/68 EUR) 200 PLN/50 EUR 457 PLN/114 EUR systems of >50 MW Co-firing of biomass 0.30x(270 PLN/68 EUR) 200 PLN/50 EUR 281 PLN/70 EUR Hydroplants >5-20 MW 2x(270 PLN/68 EUR) 200 PLN/50 EUR 740 PLN/185 EUR Hydroplants >20 MW 2.30x(270 PLN/68 EUR) 200 PLN/50 EUR 821 PLN/205 EUR Data resulting from latest version of The Big Tri-Package draft.. 9

10 Upcoming changes to regulatory environment Selected market expectations/informal declarations of Polish government Upcoming changes to regulatory environment drafts Ø Discussion about coefficient value Ø for particular Discussion sources about coefficient is still open; value Ø Favourable support for solar open; plants Ø only Favourable up to a certain support capacity; for solar plants Ø only Methods up to a of certain fixing the capacity; certificate Ø Methods of fixing the certificate system: Co-firing biomass current support only until year 2017; Special fund to purchase surplus of certificates; Increase of green energy to develop smart-metering; Resignation from support for 10

11 Upcoming changes to regulatory environment Act on Transmission Corridors decision, building permit, decision on expropriation) by one decision; Ø A number of improvements related with administrative and court proceedings. owners; proceedings; (ii) delivery of mail to registered address; construction Ø Penalties or tacit approval when deadlines are breached; Ø Short deadlines for courts to hear any potential complaints; 11

12 renwables market. Regulation outcome Potential market outcome hydro plants, off-shore wind farms, Ø New investment opportunities for investors; Ø Higher demand for promoted technology; Fixing the certificate system Ø More opportunities to obtain financing; Ø Increased number of investments; micro-generation Smart grid Ø Demand for technology and services related with micro-generation; Easier construction of grid New obligations of grid operators Ø More locations available for investments; Ø Shorter deadlines for connection; Decrease of support for co-firing biomass Ø Slower dynamics of biomass demand; Ø Increased demand for other sources; 12

13 Thank you! Contact details: Adam Jodłowski Managing Associate +48 (32)

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