Wood-fired electricity generation would have potentially flooded the market with green certificates, thus lowering their market value.
The withdrawal of green-certificate support for large wood-based biomass in last month's government decree on the draft renewable-energy law was seen as a victory for the low-carbon energy-generation sector over conventional thermal generation. The Polish wind industry expressed surprise when wood-based biomass was included last year as it would potentially be burned in thermal coal power plants and was not deemed sufficiently low-carbon to deserve green-certificate incentives.
Electricity suppliers in Poland have to accumulate the certificates to demonstrate they are sourcing a set proportion of their sales from renewable-energy sources. Last year's draft gave the green light for large-scale wood-burning power plants to receive green certificates. Certificates when biomass was to be included stood at PLN 282/MWh (EUR67.14/MWh). Green-certificate prices have been on a steady growth path since their introduction in 2004 when they stood at PLN 240/MWh. Renewable generators get a guaranteed price floor of PLN 197/MWh.
Michal Cwil, director of Polish renewable organisation Polska Izba Gospodarcza Energetyki Odnawialnej, pointed out that small power plants with capacities up to 5MW would still be able to burn wood and receive green certificates. Large-scale coal power plants, which dominate the Polish power sector, will also still be allowed to burn wood fuel, but without financial incentives.
However, Ministry of Economy officials also said last month that the draft renewable-energy law through which the green-certificate changes will be implemented would not be published before government elections in October.
The draft was originally intended to be published in July and is already nine months late - it was required by a European Commission directive, which was supposed to be implemented by the end of 2010.
As the draft will not be published before the elections, the public consultations will also be delayed, meaning the law cannot be passed until the middle of 2012, extending the period of uncertainty for investors. Previously, the Ministry of Economy said that it had planned to cut the number of green certificates awarded to wind farms by 20%.