Bill amending the 10H Act to enlarge the area accessible to onshore wind farms is closer and closer to adoption | In Principle

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Bill amending the 10H Act to enlarge the area accessible to onshore wind farms is closer and closer to adoption

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.

Investors’ and customers’ expectations

The expectations of the onshore wind sector have been known for a long time. First and foremost is liberalisation or abolition of the 10H rule, which has effectively blocked the development of new onshore wind projects in Poland. Under the 10H rule, a distance of at least ten times the height of an onshore wind power plant must be maintained between the wind power plant and residential buildings, in practice making it impossible to build new wind capacity on land. Also, investors expect improved transparency and streamlining of the wind power siting process, improved clarity of rules for cooperation with local government, and clear rules for conducting dialogue with the local community, which will make work on onshore wind projects faster and more efficient.

But it is not only the energy sector that is hoping for a breakthrough in wind power construction rules. So are business and industry, especially energy-intensive industry. The new wind capacity would reduce wholesale electricity prices, which have been at record levels on the Polish Power Exchange for several months. For large customers, the availability of electricity supply under PPA and cPPA contracts would also increase (in this aspect, a separate issue necessary for the spread of corporate long-term contracts for the purchase of electricity from renewables is the permissibility of building direct lines, or at least providing companies virtual access to electricity from renewable sources). Liberalisation of the 10H Act would also boost the local and national economy.

While the sector’s expectations are clear, the question remains how far the current proposal would achieve these demands.

Proposed changes: liberalisation of the 10H Rule

First of all, the bill maintains the basic minimum distance of a wind power plant from development at the 10H level. But this rule would become more flexible, as considerable authority would be vested in local governments to determine the location of wind power plants under the procedure of amending the local zoning plan. The obligation to prepare or amend a local plan for the needs of a given development would apply not, as before, to the entire area designated under the 10H Rule, but at least the area in which the given wind power plant is located within the statutory distance. This distance, in turn, under the general rule, would still be ten times the total height of the wind turbine away from a residential building, but in the future the local plan could set a different distance, but no less than 500 metres. Analogously, Art. 4(4) would permit residential buildings to be sited on the basis of the local plan or a decision on development conditions at a distance of not less than 500 metres from a wind turbine. Under the bill to amend the 10H Act, the local zoning plan under which a wind power plant would be sited would specify the maximum total height of the wind power plant, the maximum diameter of the rotor, including the blades, and the maximum number of wind generators. These changes should be regarded as realistic, and most importantly as a feasible compromise between the rigid 10H rule and the demands of the onshore wind power industry. Introduction of these changes during the upcoming work in parliament will be vital for the future growth of onshore wind capacity and increase in Poland’s renewable energy sources.

The draft upholds the principle of siting wind turbines based on a local plan. Moreover, if the distance of the wind generator from a residential building were less than ten times the total height of the wind generator and extended beyond the boundary of the commune in which the wind generator is located, a local zoning plan would also have to be prepared by the “nearby commune.” But the draft defines the term “nearby commune” within the act, which should make it easier to identify the neighbouring communes obliged to undertake a specific planning action. The proposed new wording of the 10H Act would expressly exclude the possibility of locating wind farms in the territory of national parks, nature reserves, landscape parks, or Natura 2000 areas. The distance of a wind power plant from a national park would be at least ten times the total height of the wind turbine, and in the case of a nature reserve, at least 500 metres. The updated version of the bill to amend the 10H Act from the Standing Committee of the Council of Ministers also contains provisions addressing the siting of wind turbines near grid infrastructure belonging to the transmission system operator (Polskie Sieci Elektroenergetyczne). Under the proposed new rules, wind turbines could be sited at a distance at least the total height of the wind turbine or three times the diameter of the rotor, whichever is greater. Significantly, these rules would not apply to proceedings for issuance of a building permit already commenced and ongoing, which means that current projects in the course of execution would not have to comply with this rule.

Also noteworthy is the proposed Art. 6g of the act, under which the investor carrying out a project would have to undertake, under an agreement with the commune, to bear the costs of preparing or amending the study or local zoning plan insofar as necessary to execute the planned project. From the investor’s perspective, this is actually a favourable change, allowing the economic burden associated with drafting the local plan to be shifted to the entity executing the project. Local governments are sometimes sceptical of adopting or updating a local plan for this reason, while for the investor this cost may be acceptable within the context of the ability to implement the entire project.

However, departure from the basic 10H rule would not be entirely discretionary, as making the distance rule for locating wind turbines from buildings more flexible, subject to a minimum distance of 500 metres, would involve additional obligations to consult with local residents during public discussions. The bill proposes a period of at least 30 days, but no longer than 45 days, for submission of a draft local plan, along with a forecast of environmental impact, for public examination. The same amount of time would be set aside for submitting remarks on the proposed local plan. The term “nearby commune” reappears here, and the head of the nearby commune (such as the mayor of a city) would have to issue an opinion on the local plan under which the wind power plant would be sited.

As an additional element of the proposed amendments, it is important to note the strengthening of the obligations of the wind power plant operator with respect to safe operation of the plant. The proposal would introduce additional obligations regarding technical activities relevant to ensuring safe operation of technical elements of wind turbines, to be performed by the Office of Technical Inspection (UDT) and specialised commercial services (whose activities would also be monitored by UDT). The proposal would expand the definition of “wind power plant operator” to mean an entity with its registered office or residence in a member state of the European Union, the Swiss Confederation, or a member state of the European Free Trade Association which is a party to the Agreement on the European Economic Area, conducting business in the field of electricity generation in a renewable energy source installation using onshore wind energy to generate electricity. The purpose of this provision is to identify the entity acting as a party before the president of the Office of Technical Inspection with respect to implementation of activities and obligations concerning the rules for safe operation of technical elements of a wind turbine.

Conclusions: a possible 25-fold increase in area available for onshore wind power

Will the proposed amendment to the 10H Act meet the hopes placed on it by the wind power industry? At the moment, it is too early to issue a final verdict, as the wording of the bill may still change in the course of legislative work in parliament. However, the proposed solutions ensure significant liberalisation of the current rules, and the drafters seem to be aware of the importance of the bill for the development of the onshore wind energy sector in Poland. This is evident, for example, in the shifting of the current Art. 8 of the 10H Act to Art. 1(1a), at the beginning of the act. This suggests that the drafters believe that the 10H Act should be treated as a more specific law (lex specialis) in relation to other laws, in particular the Planning and Spatial Development Act, the Construction Law, and the Act on Disclosure of Environmental Information.

According to a study prepared by the Instrat Foundation for Strategic Initiatives, the proposed changes would allow for the placement of onshore wind turbines on nearly 7.08% of the area of Poland (up from the current 0.28%), increasing the area available for wind turbines by more than 25-fold and enabling construction of nearly 31–32 GW of new wind capacity.

In addition, the amendment to the 10H Act would lay the groundwork for development of an attractive new industrial sector related to hydrogen production. Indeed, the hydrogen industry is closely watching the progress of legislative work on this bill, as the desired model for hydrogen production identified in the “Polish Hydrogen Strategy for 2030 with a view to 2040,” which we discussed in an earlier article, ultimately includes the use of low-cost renewable sources of electricity.

The changes described above are undoubtedly a necessary step toward amending the 10H Act and liberalising the current rules restricting investments in onshore wind capacity. At the moment, it can be considered a strategic document, anticipated not only by investors, but also by customers, including energy-intensive industries. The bill to amend the 10H Act includes solutions aimed at facilitating access to electricity generated using onshore wind technology. The regulations would also increase the degree of control of local authorities and communities over the planning process by creating a real channel of communications between the local authorities and residents of communes where new wind capacity is to be installed.

Igor Hanas, adwokat, Damian Brudzyński, Energy practice, Wardyński & Partners