Development of renewable energies in Poland – Overview of 2017 and prospects for 2018

When the Energy Ministry announced the first auction round for the supply of electricity from RES in Poland, it justified the small energy volumes available for purchase at that time by stating that the first auction round was a trial auction only and that auctions for all technology baskets with a much larger volume would take place in 2017. The plans providing for large auctions in 2017 were implemented to a modest extent only. It is true that auctions were organised and contracts were awarded to 352 projects for plants of up to 1 MW (mostly PV installations) at the end of June 2017. But no more auction rounds will be organised in 2017.

Two further auction rounds had been scheduled for the beginning of October – one for biomass und hydro power plants with a capacity of over 1 MW and one for small and large agricultural biogas plants. Both were unexpectedly cancelled. The total value of the aid to be awarded to the winners of the cancelled auction should have reached PLN 23 billion within 15 years. The government even annulled the regulations already in force. This abnormal fact results from the lack of communication between the government and the Polish Energy Regulatory Authority during negotiations with Brussels. The auctions were launched when the notification procedure with the European Commission was not yet finished. The plans of URE [the Polish Energy Regulatory Authority] to announce 8 further auctions in this year were put on ice.

Existing plants are not to be envied – many of them have lost profitability due to extremely low prices for green certificates. The deterioration in prices is significant and is posing a threat to the existence of RE plants. From the peak value of over PLN 300 per MWh some years ago, the price for certificates dropped to the historic low of PLN 22 per MWh at the end of June. During the next months the price picked up a bit – the value of green certificates rose by nearly 160% (up to PLN 58) – only to drop again later. And for most of the wind farms to remain profitable, the price of green certificates must be at least PLN 100-150.

 

A knockout for RE plant operators could be the recently enacted

Poland is still far behind the EU‘s 2020 climate goal. If Poland misses the climate goal, it will have to pay penalties or import green energy from other countries by way of so-called statistic transfers. Both options would be expensive. Therefore, it can be expected that in 2018 the government will finally organize auctions of much larger volumes than it has done so far. This at least would be a rational decision.