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Draft Bill on Renewable Energy Sources. New regulatory system.

Draft Bill on Renewable Energy Sources. New regulatory system. Wojciech P. Cetnarski PWEA President. Warsaw, May 21, 2014. Agenda. About PWEA New regulatory system – the rules Case study Let’s bid ! Summary. About PWEA. Polish Wind Energy Association:

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Draft Bill on Renewable Energy Sources. New regulatory system.

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  1. Draft Bill on Renewable Energy Sources. New regulatory system. Wojciech P. Cetnarski PWEA President Warsaw, May 21, 2014

  2. Agenda About PWEA New regulatory system – the rules Case study Let’s bid ! Summary

  3. About PWEA Polish Wind Energy Association: • a non-governmental organisation, acting since 1999; • having more than 100 member companies; • a member of: • European Wind Energy Association, • Global Wind Energy Council.

  4. Current status of the legislative process • Version 6.3. of the draft Bill on Renewable Energy Sources, dated March 28, 2014, was approved by the Council of Ministers • The legislative process still ahead: • the draft Bill goes to the Parliament which approves it after three readings, possibly introducing amendments along the way; • the draft Bill is put before the Senatewhich may reject or approve it in its entirety or propose amendments. The Parliament may reject the Senate’s amendments or overrule the Senate’s decision to reject the Bill with an absolute majority of votes; • the Parliament’s Speaker delivers the Bill to the President of the Republic of Poland for passage into law ; • the President: • signs the Bill into law if he has no objections to it, and orders the text to be published in the Journal of Laws, or • refuses to sign the Bill and returns it to the Parliament, within 21 days, for re-examination with a justification of this move (the Presidential veto), or • asks the Constitutional Tribunal to examine the constitutionality of the Bill; • notification of the law to the European Commission.

  5. New regulatory system – introduction of auctions Source: PwC analysis

  6. Auctions – general rules 1/2 • New projects may seek support exclusively viathe auction mechanism. • Biomass-fired installations with a capacityin excess of 50 MW, as well as hydro witha capacity in excess of 5 MW are excluded from the auction system. • The Council of Ministers shall issue regulations setting the maximum quantity and value of the energy that may be purchased in the next year (25% for installations with a capacity below 1 MW) by November 30 every year.

  7. Auction – general rules 2/2 • Auctions to be organized and conducted by the President of URE at least once a year. • Separate auctions for sources with a capacity ≥1 MW. • A cap to be set for technologies < 4000 MWh/MW/year. • The winning bidders shall be those offering the cheapest energy. • The bids must not exceed the reference price set by the Minister of Economy at least 60 days before the scheduled date of the auction.

  8. Auctions – the pre-qualification process • Prospective bidders shall be subject to a formal assessment – they will be required to deliver specific documents: • compliance with area development plan; • grid condition conditions or interconnection agreement; • environmental decision; • building permit; • schedule of implementation of the project. • The President of URE shall issue a certificate of eligibility to take part in an auction or refuse to grant this certificate within 30 days of having received the prospective bidder’s application. • The refusal to grant the certificate shall be appealable. • The certificate shall remain valid for 12 months.

  9. Contracts for Differences (CfD) The RES Act draft implements a contracts for difference support system to be distributed via a non-technology based auction system for RES installations with more than 1 MW capacity. According to this support scheme the electric energy produced by RES installations permitted in an auction is sold at the wholesale market price, whereas RES producers are refunded with the difference between the auction (“strike”) price and the arithmetic average daily price for electric energy at the POLPX (i.e. index IRDN24). Example: Producer is awarded the strike price of 380 zł/MWh (indexed annually by CPI) and sales the energy OTC, or trough POLPX (above 1 MW), at the price of 170 zł/MWh. Then applies to OREO for reimbursement of 200 zł/MWh, which is the price difference between the strike price and the arithmetic average daily price of 180 zł/MWh, for electric energy at the POLPX.

  10. Bidding process • Main criteria: price.Additional criteria: A cap set for technologies < 4000 MWh/MW/year. • Maximum price set every year (the reference price set by the Minister of Economy). • No minimum price. • Obligation of commencing the generation in 4 years since winning the auction.

  11. Let’s bid – case study Auction volume

  12. Let’s bid – case study Average productivity of RES technologies Source: TPA Horwath

  13. Let’s bid – case study Reference prices Source: E&Y

  14. Thank you for your attention Wojciech Cetnarski President of Board Polish Wind Energy Association www.pwea.pl

  15. Create your wind business in Poland! This two-day event will explore the financial, technical, environmental, policy and regulatory issues that will shape the development of wind energy in Poland REGISTER NOW Book your stand now (limited space available) www.psew2014.psew.pl Organizer:

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