Development of Renewable Energy in Poland

1. Development of Renewable Energy in Poland Michał ĆwilDirector General of the Polish Economic Chamber of Renewable Energy Warsaw 30th May 2011 CEOC Conference EU Energy Policy “New Challenges for Third Party Inspection and Certification Bodies”

2. Who we are & what we do?Polish Economic Chamber of Renewable Energy • legislation • consulting • education • promotion • B 2 B integration

3. Where do we stand now?Primary Energy use in electricity, heat & transport Total energy amount: 100 000 ktoe (1150 TWh), (4150 PJ) RES 7% gas 12% oil 21% coal 48% lignite coal 12% Coal represents much higher share in the electricity sector (up to 94 %)

4. Where do we stand now in RES?Gross final energy consumption Final consumption: ca. 65 000 ktoe (750 TWh), (2700 PJ) from biomass co-fired with coal from large hydro 50% 25% electricity ca. 7 % heat & cooling from biomass off-grid 95% ca. 12 % 1st generation of biofuels 100% ca. 6 % transport  8 % (?!)

5. What is the target for RES (PL vs. EU) Share of gross RES in gross final energy consumption 2020 • 15 % in Poland • 20% in the EU Directive 2009/28/EC and the Polish Energy Policy respectively 2030 • only 16% in Poland (!?) set in the Polish Energy Policy • 45% in the EU is discussed on the EU level 38% 49% 15% 15% 18% 23% 24% 31% 17% 20%

6. Is it really not much to do to reach the target?We start not from 8%, but from 1% of RES to reach 15% in 2020 2010 2020 next 10 years 8% by all “RES” installations 15% by all RES installations 1% by RES build in 2000-2010

7. What Poland plans to has in RES in 2020?Based on National Renewable Energy Action Plan transport heat & cooling electricity 5921+2786+2018 69 200  19.13% 17.05% 15.5% 10.14% 5 921 ktoe2786 ktoe2 018 ktoe

8. How to reach the target in 2020 in Poland?Existing support mechanisms for renewables in Poland green certificates RES unit is in operation grant subsidies RES unit is in a development process

9. How to reach the target in 2020 in Poland?Support mechanisms – green certificates • national funds • provided for electricity from RES • for all new and old RES installations connected to the grid and licensed • no dependence on RES technology • no dependence on RES installed capacity • no dependence on efficiency • all producers (if the above are met) can receive only if the obligations are projected properly • the mechanism exists up to 2017. It could be prolonged !? So who is going to invest now?

10. What in fact is the outcome of the green certificates!?Total RES electricity production vs. „RES” electricity from biomass co-firied with coal TWh co-firing  The production increases mainly due to cofiring of biomass with coal  More than 50% (in total of PLN 3 billion/y) of the support does not move into new investments

11. What in fact is the outcome of the green certificates!?Share of biomass not cofired with coal in final RES electricity produc.  The share of electricity from biomass in total RES electricity production decreases

12. How to reach the target in 2020 in Poland?Supportmechanisms – grant subsidies • mainly the EU funds from Operational Programmes (ERDF&CF) • new RES based on electricity, heat and transport are supported • excluded are: PV, electrical geothermy!?and cofiring • criteria of evaluation are the same for all RES !? • support up to 70% of eligible expenditure !? Banks consider this as a risky funds • but limit for 1 project up to PLN 40 million • long-lasting and bureaucratic competition procedure leads to numerous infringements of legal provisions and erroneous decisions • Lodging an appeal instrument does not suspend the competition course !? • available allocation is limited, so only selected projects can be supported

13. By such support mechanism can the target be achieved? Grant subsidies: how the firs call under 9.4 OPI&E is realised? The closed competitions for co-financing announced by the Implementing Authority was 14th April 2009 Until today: the evaluation is not fulfilled ! Applicant has only 7 days to make any possible clarifications of application’ documentations. If deadline is exceeded the applicants are deleted from a ranking list for subsidies. But there is no, in fact, limit time for evaluation by the Implementing Authority. The appeal procedure does not stop the evaluation in order to not cause any additional delays. This is acceptable only if the applicant has no right! In case when Implementing Authority is wrong, this means that despite of the effective filing of an appeal, the applicant may run out of funds.

14. By such support mechanism can the target be achieved? Grant subsidies: how the firs call under 9.4 OPI&E is realised? Whether there are only dissatisfied investors? No, those which received 70% of eligible costs to co-financed the RES project do not criticize the evaluation’ criteria. PIGEO proposed 20% for wind, for example, to grant much more projects. But it’s not the case! Why the Program provide a possibility to support RES project up to 70% ?! Because of small projects !? BUT is the € 14,3 million project a SMALL PROJECT ? Is this true that more than 50% of applications are represented by a low quality?

15. Mission of the Ministry of EconomyFor doing business in Poland To create the best in Europeconditions for doing business For the next 14 applications the evaluation is prolonged due to the process of sending claryfications induced by the questions of experts providing the evaluation.

16. But what is the reality ? For doing business in Poland: Word Bank ranking for 183 countries criteria for ranking

17. What will be the future of RES regulations? The Government is obliged (under 2009/28/EC Directive) to adopt new Law on renewable energy sources. This had to be done up to 5th of December, 2010 with all regulations/ordinances ! Up today there are even no assumptions of the Act !

18. Can we reach the target by specified mechanisms ? These are not the ways to reach the target !

19. What are our expectations? Improvements in administrative procedures Environmental impact assessment, construction permit, spatial planning. Access to the grid Priority grid access for large units and guaranteed access for small should be ensured. A transparent mechanism for connection requirements and for sharing of the cost of connection between RES producer and operator. The introduction of a stable and long-term support mechanisms For at least 15 years from the start of operation, which in terms of achieving the objective for 2020 corresponds to its operation until 2035. In order to ensure that all RES technologies are promoted, a well designed feed-in-tariff system should be implemented. The introduction of sustainable use of biomass for energy purposes

20. What are our expectations for grants?Aid funds are limited and the target is established • The subsidies should provide many new and effective installed capacities from RES: a specified level of support for different technologies (e.g. 20% for wind, 35% for biogas) and no limit for one project. • The procedure of the application evaluation should be reduced to the assessment of the disposal of three documents only: • Final building permit, • Valid technical terms and conditions for grid connection or other document confirming the connection/possibility of connection of RES to the grid, • Confirmation of the possibility of investment financing given by a bank statement detailing financial means available on a bank account, or by a bank’s promise or a Credit Agreement.

21. The conclusion • According to Article 3, paragraph 2 of the 2009/28/EC Directive: • “Member States shall introduce measures effectively designed to ensure that the share of energy from renewable sources equals or exceeds that shown in the indicative trajectory set out in part B of Annex I.” ... the rest will be done by investors.

22. Thank you for your attention Polska Izba Gospodarcza Energii Odnawialnej ul. Gotarda 9, 02-683 Warszawa Tel. +48 22 548 49 99, Fax +48 22 548 49 00 pigeo@pigeo.pl www.pigeo.org.pl