Polish Renewable Energy Developers want Feed-in Tariffs

The unpredictability of the prices of renewable energy certificates (‘green certificates’) was identified in a survey of Polish developers as the greatest obstacle to renewable energy investment in the country. The difficulty of obtaining grid connections, permitting administration, and planning difficulties follow close behind, according to the survey report ‘Investments related to renewable energy’ published by legal firm BSJP in October 2011.

The Polish government requires utilities to produce ‘green certificates’ that prove that a proportion of their electricity was generated from renewable sources. That means developers are not guaranteed a fixed support price for the energy they supply from renewable energy sources. The value of the green certificates will rise and fall with market demand.

Financing not a problem

Less than 30% of respondents to the survey viewed subsidies or funding as very problematic. Almost 40% of respondents viewed bank financing as not problematic at all. In fact, commercial bank financing was seen as the least problematic of the 11 potential difficulties identified in the survey.

While installed renewable energy capacity in Poland has more than doubled since 2009 (from a very low base), renewable energy developers argue that the present system does not supply sufficient incentive to stimulate renewable energy investment. They have been pressing for a feed-in tariff regime. The EU has also been pressing Poland to reform its legislation in the area. They pointed out that the present regulations are not sufficient for proper implementation of Directive 2009/28/EC on the promotion of the use of energy from renewable sources.

The Polish government was due to publish a Renewable Energy Sources law in December 2010 but a year later the proposed law had still not been published. Poland is largely energy-independent because of the country’s huge reserves of hard coal. More than 90% of the country’s electricity is generated from coal. But it is not rich in renewable energy resources and Poles consume more energy per capita than most of their counterparts in Western Europe. While Poland’s economy performed well through the recent economic crisis, moving away from coal will be difficult. A recent report by the World Bank - "Transition to low-emissions economy in Poland" concluded that the EU climate policy will cost Poland 1% of its GDP every year up to 2030.

The BSJP survey was based on telephone interviews with 52 companies in Poland’s renewable energy sector. Between them, the surveyed companies are investing in around 3GW of new energy and heat capacity projects that are due to be completed during 2012 or 2013. They ranged from 74 projects of 1MW or under, up to seven projects of over 100 MW. Some 73% of the companies were in wind power; the remainder were involved with biogas, biomass, hydropower; and other technologies. A little under half of the companies surveyed had ten employees or less, while one third had more than 250 employees.

Technology-specific FiTs wanted

Some 78% of respondents to the survey said the most important action that would promote manufacture of renewable energy solutions would be a fixed price support over a set number of years. And 70% of those respondents want Poland to move away from certification systems, replacing them with a feed-in tariff adjusted to the needs of each type of renewable energy technology.

“We can’t go forward without establishing a consistent renewable energy support system,” according to Michał Siembab, a Director at EWE Zielona Energia and one of the respondents to the survey. “The current green certificate system does not differentiate between sources of green energy, which leads to too much support to installations that require lower investment outlays (e.g. coal and biomass co-firing) and small support to others, e.g. photovoltaics.”