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Poland

Poland

Wind industry fights for better rules

POLAND: Wind-farm developers and investors in Poland are hopeful that new legislation more favourable to the sector will emerge within weeks, after the introduction of a draft renewable-energy law in December was met with a wave of objections.

The industry was strongly opposed to the draft law's clauses introducing correction factors reducing the number of green certificates issued for electricity generated from wind. Under the proposal, onshore wind farms with more than 200kW capacity would be eligible for only 0.75 of a certificate per megawatt hour. This poses a threat to the viability of many wind farms already planned in Poland, the industry argued.

The new law, in contrast to current regulations, would not oblige electricity distributors to buy electricity generated from wind at a price at least equal to the mean electricity market price - currently PLN 200/MWh (EUR48.45/MWh). Wind investors claimed this would hit the very foundation of their business.

"The lack of obligation to buy wind-generated electricity at the mean market price is the most disturbing issue for us," said Mary Czulowski, director at West Coast Energy, a British developer active in the Polish market. "We simply could not operate without this obligation as we invest using project finance, and the risk profile of the banks requires financial stability in regard to revenue forecasts."

Reducing the number of green certificates would mean that only sites with the highest wind productivity might be developed, she added.

Wind developers and investors fear that the lack of an obligation could make it more profitable for electricity distributors to pay a penalty fee for not taking electricity from renewable sources than buying electricity along with green certificates.

Currently electricity distributors have to buy wind-generated electricity - at PLN 200/MWh - along with green certificates from the same source on long-term contracts, explained Maciej Stryjecki, president of the Polish Foundation for Sustainable Energy.

"But once the obligation to pay the mean price has gone, electricity distributors might pay the penalty fee instead, and thus force wind-farm operators to accept much lower electricity prices," she warned. The 34MW Windpark Dobrzyn project, for example, could see its revenues cut by PLN 505 million over the wind farm's 30-year operational life, the owner estimates.

West Coast's Czulowski believes that the objections to the new law, amounting to more than 2,000 negative submissions, might produce a revised draft that is more favourable to the wind sector. But Michal Cwil, director of the Polish Economic Chamber of Renewable Energy, is more cautious, advising the industry to wait and see what the amendments to the law will look like before celebrating.

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