Bloomberg News

Poland to Amend Renewables Bill Amid Wind-Farm Investor Concern

April 11, 2012

Poland, which boosted wind-power capacity 37 percent last year, will amend a proposed renewable- energy law after investors said a December draft would hamper development of new ventures and erode wind-project finances.

The December plans, aimed at saving the government as much as 1 billion zloty ($313 million), would reduce support for onshore wind farms, boost subsidies for costlier technologies and scrap an obligation for utilities to buy fixed-rate power from renewable sources.

“We are going to restore the obligation to buy energy from renewable sources at a guaranteed price, based on a formula set by the market regulator,” said Janusz Pilitowski, director of the Economy Ministry’s renewables department. The government also plans to keep subsidies for current and planned wind farms unchanged for 15 years after commissioning, he said today at a conference in Warsaw, adding that the level of subsidy for new projects remains undecided.

Poland, which relies on coal for about 90 percent of its electricity generation, is seeking to spur development of alternative energy while shoring up funds to bolster economic expansion. The nation’s growth is slowing from last year’s 4.3 percent, the fastest annual increase in three years, as demand for its exports from the euro area wanes.

May Draft

The Economy Ministry received opinions on the December legislation proposals from almost 100 organizations and plans to present a new draft law in May.

The Polish Wind Energy Association, representing investors in Poland such as GDF Suez (GSZ) SA, EON AG and Vestas Wind Systems A/S (VWS), said the earlier plan may have halted wind-farm construction because developers would have been unable to gauge their economic viability. The group welcomed the new proposals.

“It’s not a revolution but definitely a large step in the right direction,” said Christoph Sowa, the group’s deputy president. “The crucial element is the restoration of the obligation to buy renewable output at a set price as it guarantees revenues.”

Poland’s wind-energy capacity in the Baltic Sea could reach 10,000 megawatts, generating 30 terawatt-hours a year, or almost 20 percent of annual consumption, according to the Polish Offshore Wind Energy Society. The Transport, Construction and Maritime Economy Ministry said in February it had 47 applications to build Baltic wind projects after extending the validity of permits to attract investors.

Poland has more than 2,000 megawatts of installed wind capacity, grid operator PSE Operator SA said in February. Wind farms generated 2.8 terawatt-hours of electricity last year, or 1.8 percent of the nation’s consumption, grid data show.

To contact the reporter on this story: Marek Strzelecki in Warsaw at mstrzelecki1@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson in London at lpaulsson@bloomberg.net


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