January 29, 2014

In Poland the New Law on Renewable Energy is Finalized

Polish Ministry of Economy finalized the draft law on renewable energy sources (RES) and sent it to the Standing Committee of the Council of Ministers with the request as soon as possible to decide on this issue. According to Ukrainian Biofuel Portal pellets-wood.com, the law primarily defines the new rules of alternative energy support by the state.

The representatives of the Ministry stressed that the project is designed in accordance with the obligations for the EU climate policy, in particular with due regard to the share of renewable resources in energy production. Along with that the mechanism involves the reduction of the costs for supporting energy industry.

The draft law envisages the rejection of the existing system of subsidizing alternative energy production in favor of the auction system, in which the company, offering the lowest cost of energy produced, receives the guarantee on its purchase at the proposed price for 15 years. The price will be indexed according to inflation.

The Polish Ministry proposes that the law comes into force in early 2015, and the auctions on purchasing "green" energy are conducted at least once a year. The Minister of economy will announce in advance the cost of energy for today, the maximum price that can be offered at the auction, as well as the alternative energy sector, which will receive support from the state this year.

The law warrants that there will be separate auctions for renewable energy production plants with the capacity above and below 1 MW. At the same time, at least 25 percent of energy production which is supported by the government should be generated from low-power sources (less than 1 MW). Thus, not only large but also small power generation companies will be able to receive the support. Under the bill, energy consumers will bear these costs in the form of so-called payments for renewable energy, the amount of which for 2015 is set at 2.27 PLN/MWh excluding VAT. It is planned that the calculation of such fees will be performed by a specifically authorized company Orec (operator of renewable energy calculation).

The project presented the forecast according to which in 2015 the average quarterly price of energy will be 220 PLN/MWh, while the average price of electricity from renewable energy sources will be 362 PLN/MWh. The project also provides the definition of mikro installations - low-power equipment used for generating alternative energy for own needs. There is no need to purchase the license for such kind of production or register the business. The scheme of support also provides the obligation of the state to purchase excess energy from renewable sources at the rate of 80 % of its market price.

Polish Ministry of Economy affirms that the new bill does not provide the support for co-firing biomass with coal in large power units, with which today about half of Polish "green" energy is produced. Nevertheless, the support will be provided for a so-called hybrid combustion, when biomass is burned separately but connected to the coal or gas fired boiler in the following parts of the installation station. The officials also claim that the new law is aimed at preventing the use of full timber during co-firing.

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