Investors hold fire as Polish renewables support wobbles

Poland runs the risk of losing new investors if it does not make a final decision over support for renewable electricity, analysts and company representatives have told ICIS.

German utility RWE said it is awaiting new legislation before it progresses with the expansion of its 197MW of installed wind power capacity.

“Poland is one of RWE Innogy’s core markets as it offers plenty of excellent wind farm locations,” said RWE Innogy spokeswoman Viola Baumann. “We have installed onshore capacity [in Europe] of some 1,800MW, of which 197MW is in Poland. And once a secure framework for renewables support is in place, we will expand our portfolio in Poland,” she said.

CEZ Polska, the Polish subsidy of Czech power company CEZ, said it will go ahead with building new wind farms with capacity of 700MW in Poland, but only once the final shape of support for renewable generation is decided on.

The spokesman added the price of green certificates, which stood at Zl213.57/MWh(€51.43/MWh) last week, is high enough for return of investment although he was concerned that ceasing the green certificates system in favour of a green power auction, which has been proposed, could adversely affect renewables generators.

Auction

A green power auction model was proposed as a replacement for the green certificate system last year.

But the proposed model caused concern, because analysts and market participants said replacing the existing certificates of origin with the auction would only benefit the biggest generators ( see EDEM 6 December 2013 ).

The doubts were echoed by 33 Polish organisations which on Thursday issued an open letter to prime minister Donald Tusk, urging him to leave the legislation unchanged on grounds that new proposals were too complicated, and repeating the claim that they only favoured bigger companies.

The support system for renewables was expected to be implemented before the end of last year but is yet to be finalised.

On Thursday the deputy prime minister Janusz Piechocinski told the Polish media that draft of new legislation will be passed for approval to the Sejm, the lower house of the Polish parliament, by the end of January.

‘Hostility’

Polish wind energy association chairman Tomasz Podgajniak said investment has been slowing in the country mainly because of “hostility” to renewable energy, which he said had been openly expressed by state representatives.

“We still have old regulations and they helped renewable investment to grow, but if the prime minister openly declares hostility towards renewables, it makes people uncertain what shape and form those regulations will take,” he said.

The remarks came after Tusk told the Polish parliament on 10 January that renewables would raise electricity prices and cause oversupply in the system.

Petr Bartek, a Czech analyst at Erste Bank said a number of other European other European countries had changed their attitude towards renewables.

“The postponement of granting one green certificate [of two] for wind power production in Romania for 2014 to 2017 ( see EDEM 5 June 2013 ) and the withholding of tax on solar production in the Czech Republic are just some examples that support for green energy in Europe is diminishing,” Bartek said.

But he added that Poland remained a good place to install more wind farms due to its location. “Wind power production makes sense along the windy north coasts of the country, so Poland has to come up with a final scheme and give incentives for future investment in renewable energy.

“CEZ and other companies will restart their wind farm projects once the rules have been set,” he said. Karolina Zagrodna