Credit trading basis of Poland Strategy -- Major focus on wind

Wind energy is to be the focus of Poland's first renewable energy development program drawn up under a new regime aimed at increasing the percentage of renewables in the country's primary energy supply to 7.5% by 2010 and 14% by 2020. The Development Strategy for the Renewable Energy Sector was passed by the Polish legislative house, the Sejm, in August, a year after it was approved by cabinet. A series of programs will put the strategy into practice -- with the Polish environment ministry giving priority to wind power.

The wind program is being thrashed out at the Baltic Renewable Energy Centre, EC BREC. The centre's wind expert Robert Burzynski hopes to have a draft ready soon, with the wind sector proposals published by the end of November." The program is looking at 1600 MW of wind plant onshore and 300 MW offshore, but its main aim is to "establish a good legal, administrative and economic base for the development of wind projects and to support national industry and local communities," says Burzynski.

The program will not introduce a German-style fixed price system. "The environment ministry thinks it would be too expensive both for consumers and the national economy," Burzynski says. The EC BREC hopes to implement an "elaborated green certificate" system which allows wind plant owners to trade the environmental value of green kilowatt hours separately from the electricity.

Certificate trade

"This will hopefully correct the present problem where electricity companies often neglect to fulfil their existing obligation to take fixed minimum amounts of renewables onto their grids because there are no effective penalties," Burzynski says. Poland introduced a purchase obligation requiring the power sector to buy electricity from renewables plant in February 1999. But the electricity price paid to "green" generators has been too low to encourage renewables expansion. Only about 10 MW of wind capacity is turning in Poland.

Despite Poland's financial troubles -- reports say the country is heading for a huge deficit of up to EUR 23.6 billion or 10% of gross domestic product for 2002 -- Burzynski is confident that sufficient funds will be available for the wind strategy to represent a breakthrough.

The target of 7.5% by 2010 will involve investment of about POL 14.5 billion (¤3.48 billion), of which around 16% will be sourced from the state and 84% from private sources, states the strategy. It lists various institutions that can provide financial aid to get projects underway, including the National Fund for Environmental Protection and Water Management and Ekofundusz, a fund that obtains money from countries that are prepared to waive Polish debts if the funds flow into environmental projects.

Seeking EU aid

European Commission programs like PHARE and pre-accession funds for countries preparing to join the EU, such as ISPA and SAPARD, are also mentioned as sources, as are bilateral co-operation programs with countries like Denmark, Germany and Sweden. "We really weren't expecting such an important decision on renewables from the Sejm just three weeks before the country's general election," comments Rainer Heinsohn of Germany wind developer Plambeck Neue Energien, which opened a Polish subsidiary last November.

Another German developer, WindSolar, is also pleased with Poland's legislative progress. It set up a Polish subsidiary in Szczecin in August, just days before the Sejm passed the renewables strategy. The company reports making "rapid progress" on a 6 MW site near the town. "The potential in Poland, in terms of space as well as wind, is enormous and we anticipate exceptional market development," says the company's Ottfried Voigt.