April 18, 2012

Poland to reverse course over new renewables law

Coal-reliant Poland will reverse course and push through a law providing guaranteed purchase prices for power generated from wind turbines, an economy ministry official said on Wednesday.

The European Union member in December presented an overhaul of its renewable support plan that sought to retract guaranteed purchase prices for renewables, a move that raised investor concern in the rapidly growing wind sector.

Industry members said the lack of a purchase guarantee and a cut in the size of state support for wind by a quarter would shrivel up financing over worries costly projects would not provide a return in the European Union nation.

But Janusz Pilitowski, head of a recently established department for renewables at Poland's Economy Ministry, said discussions with industry representatives and others have shown the market was not ready for the government to move away from a guaranteed purchase price.

"I am treating the draft from December as historical", Pilitowski told a wind energy forum. "It seems that today the market is not ready for these proposals."

The updated draft will restore a designated vendor required to buy energy from a renewable source at a price set under a formula still under discussion, Pilitowski said.

He added he did not expect radical changes in the size of support for the wind sector in a country that generates nearly all its electricity from coal and which must meet tough European Union renewable targets by 2020.

The bill was originally expected to be enacted in July 2012 but the ministry, flooded with opinions on the draft bill, needed more time to work them through and it now looks that January 2013 is the earliest possible date, Pilitowski added.

"It seems that it will be May, when we are ready to publish a revision with the changes," Pilitowski said.

"The bill could then be approved by the government by the end of the first half of 2012 and this means it will not be enacted before January 1, 2013."

Renewables investors greeted the new proposals with cautious optimism, saying they still had questions over the timing of the proposed regulations.

"The initial feeling is positive as it seems that the main points we put forward were understood," Mikel Garay Garayoa, managing director at Taiga Mistral, a private equity firm investing in wind energy in Poland, said at the conference.

"But I am concerned about timing. I still can't go on with my investments."


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