Auctions will replace green certificates in Poland

The Polish government intensively works on the new system intended to support the sector of alternative energy. Auctions were named the cheapest way of its development. According to the opinion of the experts specializing in Polish energy legislation, for the time being the scheme of combining preferential tariffs with differential contracts is being considered.

The team of officials from the Prime Minister’s Department as well as the representatives of the Ministry of Economy and the Ministry of Finance has already started working on the new concept of renewable energy support. This system will be solely based on the work of auctions. It is assumed that the current system of green certificates, as well as the system of green certificates with adjustments proposed in the latest draft law, will be completely replaced. As one of the members of the working group said, the development of the program may be completed after 2-3 meetings.

The leading analyst of Ukrainian Biofuel Portal pelleta.com.ua Sergey Kozlov informed that the proposed system provides the support for new installations using renewable energy through the contracts with differentiated amounts determined at the auctions. The owners of such installations will pay for energy according to market rates, moreover extra bonuses will be paid as well. The expert also said that the total revenue from the sale of power and bonuses will be set for the entire period of cooperation (possibly inflation will be indexed). Thus, if the market price of electricity declines the bonus will rise, and vice versa. This approach can be compared with the recently proposed scheme of orange certificates, the purpose of which was to support co-incinerators (the bill did not enter into force because of the objections of the Polish Ministry of Finance).

The total amount of support will likely be based on the results of the Dutch auction (now the option to monitor it online is under consideration). The final price of energy will possibly be calculated from the cost of the most expensive biofuel - biogas. It is still unknown whether the auctions will be conducted separately for different technological baskets presented in the National Action Plan for the development of renewable energy sources. The final proposal, which was discussed in the government, was to divide technologies into stable and unstable.

Also the period of transition when both the auction system and the system of green certificates will function is not determined yet. Probably the current system of green certificates with the opportunity to change over the new system gradually will continue to run within some time.

When developing the new concept the Polish government took the Dutch model of bioenergy support as a basis. Meanwhile, the latest report of Rabobank informed that the Dutch specialists are forced to modify it as according to analysts' estimation, with the current pace of development the Netherlands will be able to reach only 9 percent share of renewable energy sources by 2020 (instead of planned 14 percent). After developing the concept the Ministry of Economy will prepare a new draft law.