Page 73 - European Energy Innovation - Autumn 2014
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Autumn 2014 European Energy Innovation 73


document entitled “European from the Government and market Arkadiusz Sekscinski
Commission guidance for the participants, i.e. inflation. No
design of renewable energy substitution fee indexation would entrepreneurs to accordingly
support schemes” , developed by lead to a number of adverse plan their business operations.
DG Competition and published effects for both the Government MWh limits unused in a particular
on 5 November 2013. The and investors. year shall increase the next year’s
document stipulates the so-called limits.
technological neutrality criterion In such circumstances investors
as one of the fundamental will expect higher rates of return SUMMARY
criteria. This means that each RES from the support scheme, what The renewable energy industry
technology shall be assessed and will have to be ensured by higher stresses that the draft RES Act is
considered only and exclusively auction bids, resulting in higher an opportunity to introduce stable
in terms of a single criterion, support scheme costs. However, solutions for further development
i.e. the cost of construction such an approach is contradictory of the sector. Although the sector
of capacity or production of to the Government’s approach is critical in its remarks, it has to
electricity in a renewable source. under the so-called “optimisation” be admitted that many of the
Furthermore, such a provision of the support scheme, which in remarks have been accepted
contradicts Directive 2009/28/ principle is to create a scheme during the governmental works,
EC, in accordance whereof that is less expensive compared enabling the green certificates
Member States shall ensure to the current one. Therefore, it is scheme and the new auction
guarantee of transmission and necessary to restore substitution scheme to operate efficiently.
distribution of electricity from RES fee indexation by inflation. The wind energy industry solely
by transmission and distribution expects to build at least 3 000
system operators as well as ONE-YEAR TIME HORIZON MW of new capacity by 2020
priority access to the network FOR THE SPECIFICATION OF (current installed capacity
system for energy from RES. The AUCTION VOLUMES AND amounts to approximately 3 500
solution is subject to a discussion REFERENCE PRICES MW). However, to achieve the
and might be modified – The frequency of announcement goals we need a stable legal
obviously, there are not only legal, and methodology for the framework. The discussion on the
but also technical and economic calculation of Reference Prices RES Act is pending, shifting from
premises to do so. is also subject to discussion. The the government to the Parliament.
Reference Prices are to constitute It is clear that the decision-
NO SUBSTITUTION FEE a price cap – the fundamental makers and the industry head
INDEXATION auction scheme entry criterion. for a compromise, which means
The draft Act stipulates that unit In the opinion of the Polish Wind that the new law can be adopted
substitution fee (constituting a Energy Association the Reference before the end of 2014. l
benchmark for certificate prices Prices shall be announced for a
in the current scheme) will not be period of three subsequent years,
subject to indexation and will be subject to annual “rolling” update
fixed at PLN 300.03 per 1 MWh. as well as potential application of
The substitution fee substantially a degression factor in subsequent
affects green certificate prices. years to reflect the expected
Therefore, the substitution fee technological progress for
substantially affects the value of particular technologies (a solution
green certificates, and its freeze proposed in the previous version
might result in the decrease of of the RES Act).
market value of green certificates,
leading to adverse financial Similarly to Reference Prices, also
results for investors. auction volume (MWh limit) for
each year shall be planned for at
In accordance with the draft Act least five years in advance and
the nominal unit substitution announced upon introduction
fee would remain unchanged of the new scheme. The auction
irrespectively of the inflation size would then be announced
level in Poland. It is crucial pursuant to a rolling scheme
that the support cannot be to always maintain the three-
regulated on the basis of a year period. This will ensure
parameter independent both system transparency and enable
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