CEOC Conference EU Energy Policy “New Challenges for Third Party Inspection and Certification Bodies”

Warsaw30th May 2011

Development of Renewable Development of Renewable Energy in PolandEnergy in Poland

Michał ĆwilMichał ĆwilDirector General of the Polish Economic Chamber of Renewable EnergyDirector General of the Polish Economic Chamber of Renewable Energy

Who we are & what we do?Polish Economic Chamber of Renewable Energy

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Where do we stand now?Primary Energy use in electricity, heat & transport

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lignite coal 12%coal 48%

oil21%

gas 12%RES 7%

Total energy amount: 100 000 ktoe (1150 TWh), (4150 PJ)

Coal represents much higher share in the electricity sector (up to 94 %)

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ca. 6 %

ca. 12 %

ca. 7 %

Final consumption: ca. 65 000 ktoe (750 TWh), (2700 PJ)

from biomassoff-grid95%

100%1st

generationof biofuels

from biomass co-fired with coal

from large hydro

50%25%

Where do we stand now in RES?Gross final energy consumption

electricity

heat&

cooling

transport

8 % (?!)

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What is the target for RES (PL vs. EU) Share of gross RES in gross final energy consumption

15%18%

17%

49%

24%23%

20%31%

15%

38%

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

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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

8%by all “RES” installations

2010

1%by RES build in 2000-2010

15%by all RES installations

2020

next 10 years

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What Poland plans to has in RES in 2020?Based on National Renewable Energy Action Plan

heat & co

oling

electrici

ty

transp

ort

17.05% 19.13%10.14% 15.5%

5 921 ktoe 2786 ktoe 2 018 ktoe

5921+2786+2018

69 200

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How to reach the target in 2020 in Poland?Existing support mechanisms for renewables in Poland

green certificatesRES unit is in operation

grant subsidiesRES unit is in a development process

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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?

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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 coalMore than 50% (in total of PLN 3 billion/y) of the support does not move

into new investments

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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

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How to reach the target in 2020 in Poland?Support mechanisms – 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

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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.

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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?

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Mission of the Ministry of EconomyFor doing business in Poland

To create the best in Europe

conditions 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.

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

criteria for ranking

What will be the future of RES regulations?17

The Governmentis 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 !

Can we reach the target by specified mechanisms ?

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These are not the ways to reach the target !

What are our expectations?

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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

What are our expectations for grants?Aid funds are limited and the target is established

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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:

1. Final building permit,

2. Valid technical terms and conditions for grid connection or other document

confirming the connection/possibility of connection of RES to the grid,

3. 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.

The conclusion

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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.

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Thank you for your attention

Polska Izba Gospodarcza Energii Odnawialnej

ul. Gotarda 9, 02-683 WarszawaTel. +48 22 548 49 99, Fax +48 22 548 49 00

pigeo@pigeo.pl www.pigeo.org.pl