energy | In Principle

In Poland, public opinion and the private sector agree that faster development of renewables is needed to free the country from dependence on fossil fuel imports, and to reduce domestic coal-fired generation. The private sector has funds to develop renewable energy, for its own use or to sell to the market. And no one needs to be persuaded that the current high energy prices will reduce the competitiveness of the Polish economy over time. So the will and the funds are there. But the barrier is connecting renewable energy sources to the grid, which is simply losing its capacity.

The first draft of the regulation on the maximum amount and value of electricity from renewable energy sources that may be auctioned in calendar years 2022–2027 in Poland was published on 5 July 2022. It is the first time such a regulation covers six consecutive years. This follows from the amendment to the Renewable Energy Sources Act spurred by industry voices asserting that announcing these values further in advance would allow developers to better prepare for the auction and thus offer more competitive prices.

In recent months, the wind power sector in Poland has observed the progress of work on a bill to amend the Wind Energy Investment Act and certain other laws. It is much-awaited by the industry, due to the stringent “10H rule” still in force. On 15 June 2022, the Minister of Climate and Environment submitted the bill to the government’s Legal Committee.

2021 witnessed a record increase in wholesale energy prices (in Poland, by almost 100%) and prices for EU ETS emission allowances (by about 105% compared to 2020). Additionally, a sharp increase in natural gas market prices (in Poland, by 470% compared to 2020) has made energy poverty a common phenomenon in Europe. The European Union has presented a set of tools to temporarily mitigate the effects of rising energy prices. However, the events of recent months, in particular Russia’s full-scale invasion on Ukraine, have shown that alongside the green transition, the EU’s priority should be to become less dependent on Russian fossil fuels.
2021 witnessed a record increase in wholesale energy prices (in Poland, by almost 100%) and prices for EU ETS emission allowances (by about 105% compared to 2020). Additionally, a sharp increase in natural gas market prices (in Poland, by 470% compared to 2020) has made energy poverty a common phenomenon in Europe. The European Union has presented a set of tools to temporarily mitigate the effects of rising energy prices. However, the events of recent months, in particular Russia’s full-scale invasion on Ukraine, have shown that alongside the green transition, the EU’s priority should be to become less dependent on Russian fossil fuels.

Companies’ increased interest in offshore wind energy makes the legal regulations in this area a subject of interest for the parliament, which is trying to upgrade the regulations. The latest changes are intended to ensure safety during construction and operation of offshore wind farms.

In Europe and worldwide, the battery market is undergoing revolutionary changes. The World Economic Forum predicts that global demand for batteries will be 14 times greater in 2030 than it is today. This means that the number of plants producing them must increase significantly. In 2030, the European Union could account for 17% of the global market demand for batteries. Among other things, this is influenced by the growth of the digital economy, low-carbon mobility, and renewable energy. The number of problems related to battery production and unregulated issues has inspired the European Commission to make decisive changes in European law, the effects of which will be felt not only by the battery industry but also directly by consumers.

Over the last few months, the natural gas market in Poland and Europe has been affected by historic price fluctuations, and the situation in Ukraine demands attention to the continuity of gas supplies from abroad. In the context of ensuring security of gas supply to end-users, we point to the potential for introduction of restrictions on natural gas consumption.

In recent months, the wind power sector has observed the progress of work on a bill to amend the Wind Energy Investment Act and certain other laws. It is much-awaited by the industry, due to the stringent “10H rule” still in force. The bill is expected to be sent to the Polish parliament in the first quarter of 2022, but the first draft by the Ministry of Development and Technology has already been released.

On 7 December 2021, the Polish government officially announced its Polish Hydrogen Strategy for 2030 with a view to 2040. The announcement came at a perfect time, amid price turbulence on the natural gas market in Europe and growing doubts whether natural gas (of which Europe has too little) is still a reasonable transition fuel for decarbonisation of the economy.

On 1 December 2021, the Minister of Infrastructure published a long-awaited regulation on evaluation of applications for licences to erect artificial islands (offshore location licences). Investors who obtain permits will be able to participate in future auctions for offshore wind farms.

The latest amendment to the Capacity Market Act (which came into force on 1 September 2021) finally introduces a preferential method of calculating the capacity fee, long awaited by companies. However, the rules for calculation of the fee are based on completely different assumptions than the relief initially expected.

On 25 June 2021, the president of Poland’s Energy Regulatory Office announced the results of the May/June 2021 auctions for sale of renewable energy. Unlike in previous years, the results of all auctions announced in 2021 were released on one day.