Amendment to the RES Act

25 October 2019

In August this year new regulations regarding renewable energy sources entered into force. The Act of 19 July 2019, referred to, amending the Act on renewable energy sources and some other acts is an amendment with high hopes, because it should provide significant support and solid protection for the interests of RES electricity producers.The new legal solutions concern both support through the auction system and FIT / FIP guaranteed tariff systems.The amendment to the aforementioned Act takes into account the maximum amount and value of electricity that can be allocated to auctions in 2019. According to the Ministry of Energy's estimate, the total increase in RES electricity production from the auction in 2019 should reach the level of 10 TWh, which together with auctions that took place in 2018 will reach a value of about 35 TWh.The provisions of the new act also extend the definition of a prosumer who will not only be able to generate energy and sell it to an obligated seller under certain conditions, but also to any other seller under the conditions agreed with it.

 

Not all provisions of the Act have already entered into force, because some of them will come into force from the beginning of 2020, such as the new definition of biogas or provisions with the maximum permissible age of installations that will generate energy for the first time.From February 29, 2020, the legal basis will come into force for the Minister of Energy to issue a regulation on the detailed technical requirements of micro-installations, issue conditions and connection, and notification of connection.

The Prosumer Package, included in the amendment to the RES Act, will enable entrepreneurs to generate energy for their own needs and settle surpluses in a favorable system of discounts. The obligation to prepare a construction design for micro-installations with a capacity of up to 6.5 kW is also repealed, and the possibility of locating micro-installations on land that is intended for other purposes than production.

 

As far as the changes that have been made to the above-mentioned Act are worth looking at a few, the most interesting proposals or suggestions that have not been included in the legislative process.

 

For example, one of the consultants pointed out that ME decided to support the development of mainly wind energy in the pursuit of the National Index Target."The public is not informed by ME and wind lobbyists do not care about disclosing the fact that there is practically no stable energy from wind installations. The efficiency of wind installations is in practice 10-15% of the nominal power. From the planned connection 250000W of power actually connected 250-300 MW of unpredictable energy sources will be for huge amounts! In addition, additional costs are necessary to stabilize the system associated with wind farms, they are based on the need to keep the reserve of rotating conventional power plants ready, which increases the cost of the state budget.

It is very strange to subsidize wind investors for the energy they generate when all social, environmental and technical costs are passed on to the state and other citizens!?

Just look at the statistics related to the German Energiewende, where after spending trillions of Euro, the energy yield from windmills is still unpredictable and due to the need to work more and more conventional power plants to stabilize the network and protect real power and energy, CO2 emissions increased by 1.5% ".

The legislator rejected the possibility of any substantive discussion in this matter, specifying the above remark as a remark outside the scope of the draft regulation.

 

Another remark made by an external consultant is the proposal to extend the origin guarantee to include gas from renewable sources. The purpose of such an extension is to guarantee the end users of the origin of renewable gas such as biomethane and to facilitate the development of cross-border trade in such gas.

It should be noted that in order to fulfill the obligations arising from the RES Directive, it is necessary to introduce appropriate amendments to the Act on renewable energy sources, in particular to Chapter 5, which at the moment deals only with guarantees of origin for electricity generated from renewable energy sources in renewable energy installations.

The introduction of the above changes corresponds to current market trends, which are aimed at increasing the share of gases from renewable sources in gas transmission and distribution systems in the European Union. Despite the fact that GAZSYSTEM does not currently deal with the transmission of gas from renewable sources on a large scale, it cannot be ruled out that such activities will be carried out in the future (mixing of renewable gases with natural gas). What's more, due to the clearly defined deadline in the RES Directive for transposing its provisions into the Polish legal order, the above change of regulations will be necessary in the near future.

The above remark was also not accepted and in the justification the legislator's representative justified it by the lack of purposefulness of extending the substantive scope, which may extend the duration of the project.

 

The next remark made at the consultation stage regarding migration from the previously operating support system to new systems was also rejected with justification for going beyond the scope of the proposed regulation.

Full application content:

Due to the fact that the Biogas (Blue) Certificates System is not notified and will be rather difficult to notify in its current form, the continuing stay of agricultural biogas plants in this System creates an unacceptable risk for the owners of these installations and financing banks, and additionally prevents owners from obtaining financing bank for any modernization or extension of a biogas plant.

The only solution, consistent with the Ministry of Energy's declarations from the second half of 2016, is the fastest possible migration of all agricultural biogas plants to the New RES Support System (FIP / FIT Tariffs and Auctions).

Adequate volumes for 2019 (at least twice as high as proposed in the draft amendment), in addition to reference prices reflecting the LCOE of existing biogas plants, are key - especially for installations with a capacity> 1MW, which cannot use the FIP / FIT Tariff System - for efficient migration these installations to the New System.

To effectively expire the Old System, due to the requirement to reject 20% of the most expensive bids in each auction, 2 migration auctions should take place during 2019; the first as soon as possible and for the full volume requested in this amendment. The remaining (after both migration auctions) several biogas plants could be moved at the beginning of 2020 to the New System in a simplified mode agreed with the European Commission.

 

Another example of the rejection of a comment justifying this going beyond the scope of the regulation was the proposal to extend the definition of biogas to "uncontaminated bottom lake sediments" (Article 2 (1)). Justification - eutrophication of lakes, their overgrowing and silting, accumulates a huge amount of organic material, which has not been used so far. Semi-technical experience confirms its suitability for biogas and investors are interested in building this type of biogas plant.

 

The next, seems important proposal was to supplement art. 75 clause 4 point 4 letter e as follows:

"(E) substrates other than those listed in Article 2 point 2 - in the case of electricity production from agricultural biogas or equivalent amount of electricity resulting from the amount of produced agricultural biogas introduced into the gas network ”.

According to the person proceeding over the Act, the above remark, as well as the previous one, is outside the scope of the draft regulation.

 

Another comment, not accepted for the same reason as above, was the proposal to amend art. 79 paragraph 3 pt. 2 and 9 lit. e, which was worded as follows:

"7) diagram of the installation of a renewable energy source with an indication of the devices used to produce electricity or biogas and devices used for power or biogas output included in this installation, with the location of measuring and billing devices as well as the place of connection of this installation to the distribution or transmission network, marked on an overview map including plot numbers of plots and precincts."

 

TAnother comment, not accepted for the same reason as above, was the proposal to amend art. 79 paragraph 3 pt. 2 and 9 lit. e, which was worded as follows:

 "2) type and installed electrical capacity expressed in MW or annual installation capacity measured in m³ / year of renewable energy installation, in which electricity or biogas will be respectively produced by the auction participant;"

"(E) substrates other than those listed in Article 2 point 2 - in the case of electricity production from agricultural biogas or equivalent amount of electricity resulting from the amount of biogas produced"

Justification: In the bid form, the given producer indicates what type of installation is submitting to the renewable energy auction, while in the case of an agricultural biogas plant entering the gas distribution network its annual capacity should be indicated, in accordance with the data declared in the entry in the register of agricultural biogas producers. In this regard, also compare the justification to Article 73 item 3b in relation from paragraph 4 and art. 75 clause 4 item 2 of the Act on civil law"

 

Another unaccepted remark was the remark made by the Renewable Energy Association regarding art. 5 paragraph 3 point 1 of the Project with the content: "auction volume for biogas installations <1 MW

In addition, considering the volumes planned for new biogas installations with a capacity of no more than 1 MW, which were admitted to the auction in 2018, and also taking into account the number of biogas projects on the market, the decision to reduce support completely is incomprehensible to us as part of the auction system for this sector and no volume dedicated to small biogas installations."

 

And the last, also unacceptable comment, submitted by the Warmian-Masurian Voivode, whose content is worth reading:

"I allow myself to give to the Minister a few remarks with which people and entities interested in the implementation of investments in renewable energy sources refer to me in the Warmian-Masurian Voivodeship, because I know that preparatory works are underway to amend the RES Act. One of of entities is the company Biogal Sp.z o.o., which was the first to set up a biogas installation in the province and can certainly be called a precursor of activities in the field of renewable energy sources in the region.

Opinions are paid by attention to the provision of art. 80 clause 1 item 2 of the Act, which says: Auction is won by auction participants, whose bids together did not exceed 100% of the value or amount of electricity from renewable energy sources specified in the auction announcement and 80% of the amount of electricity covered by all offers. Such a record means that 20% of bids submitted in a given auction with the highest price are rejected in advance. The sources of such a record should be sought in counteracting possible "price collusion" on the market, but in the case of the biogas market, which is developing with great difficulty in Poland, this record does not seem to be justified. The more that the bids at the auction in this "basket" "there is little and the pool of money allocated for it remains unused.

Attention is drawn to the fact that the "Climate and energy package" signed by Poland obliges our country that by 2020 it will increase the share of renewable energy sources in the energy balance by 15%. As the applicants write, "blocking existing renewable energy sources that have all possible permits and approvals for launching is incomprehensible. ”It would be worth looking at the provisions of the Act, especially in the context of the biogas market.

Production of electricity from biogas is a much more difficult process than its production from photovoltaic or wind farm installations.In addition, biogas installations perform another important environmental function, which is the utilization of "difficult" wastes from the agricultural market (e.g. slurry) or agri-food (e.g. out-of-date food or its components). "

 

I leave the reason for not considering the comments cited above and the significance of the content contained therein.

 

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