Energy Efficiency Act

1. Energy Efficiency Act • Key legal aspects • Grzegorz Filipowicz • Associate • 17/05/2012

2. Legislative background • Energy Efficiency Act of 15 April 2011 – Journal of Laws from 2011, No. 94, item 551 • implements Directive 2006/32/EC of the European Parliament and of the Council of 5 April 2006 on energy end-use efficiency and energy services and repealing Council Directive 93/76/EEC >>> PLEASE NOTE – No secondary legislation exists!!! • The Energy Efficiency Act entered into force on 11 August 2011, BUT • 1 January 2012 – provisions relating to the obtaining of energy efficiency certificates (white certificates) • 1 January 2013 – requirement to submit white certificates to the President of the Energy Regulatory Office (ERO) for redemption • The Energy Efficiency Act shall remain in force until 31 December 2016

3. Energy efficiency support scheme • White certificates –requirements (1) Energy sector companies selling electricity, heat or natural gas to final customers Requirement to obtain white certificates and submit them to the President of the ERO for redemption or pay a substitution fee Final customers with respect to transactions entered into on a commodity exchange on own account Brokerage houses andcommodity brokerage houseswith respect to transactions entered intoon a commodity exchangefor the account of final customers

4. Energy efficiency support scheme • White certificates – requirements(2) • Option I – obtain and submit to the President of the ERO for redemption a white certificate with a value - in tonnes of oil equivalent – equal to no more than 3% of the product of: • energy sector companies selling electricity, heat or natural gas – their revenues from the sale of electricity, heat or natural gas to final customers, in a given year in which the requirement is being fulfilled • final customers trading on a commodity exchange on own account as well as brokerage houses and commodity brokerage houses – the value of their electricity, heat or natural gas purchases on a commodity exchange in a given year in which the requirement is being fulfilled AND • a Substitution Fee Unit

5. Energy efficiency support scheme • White certificates – requirements (3) • Option II – pay a substitution fee • Payable by March 31st of each year to the account of the National Environmental Protection and Water Management Fund >>>tonne of oil equivalent - ”TOE” - the amount of energy released by burning one tonne of crude oil, equal to 41 868 kJ/kg Volume of primary energy in tonnes of oil equivalent covered by the requirement but not accounted for under white certificates submitted for redemption Substitution fee Substitution fee unit = X > no less than PLN 900 but no morethan PLN 2,700 PER per tonne of oil equivalent > set by the Minister of Economy

6. Energy efficiency support scheme • White certificates – issuance (1) • Tender – organised and conducted by the President of the ERO at least once a year • conducted separately for 3 categories of projects aimed at improving energy efficiency: 1) improving energy savings by final customers 2) improving energy savings in own equipment 3) decreasing electricity, heat or natural gas losses in transmission or distribution operations • the value of white certificates to be issued is stated by the President of the ERO in the announcement • projects (or group of projects) aimed at improving energy efficiency that are to result in average annual energy savings of at least 10 TOE may be submitted

7. Energy efficiency support scheme • White certificates – issuance (2) • The following projects cannot take part in a tender: • completed prior to 1 January 2011 • for the implementation of which: >a thermal modernisation bonus referred to in Article 3 of the Act of 21 November 2008 on Supporting Thermal Modernisation and Renovation Projects was awarded > EU or state funding was obtained • specified in the statement referred to in Article 13 of the Energy Efficiency Act • Parties which declare energy savings within the following range win the tender: (t X ωaverage) and ωmax t – bid acceptance ratio set by the Minister of Economy ω average– average declared value of energy savings ω max – highest declared value of energy savings

8. Energy efficiency support scheme • White certificates – issuance (3) • Projects completed prior to a tender – a white certificate is issued by the President of the ERO upon the investor’s request within 60 days from the receipt of such request • Projects completed after a tender: • the Investor notifies the President of the ERO about the completion of the project within 30 days from such completion • the President of the ERO confirms the issuance of a white certificate within 30 days from the receipt of the notification • Randomised verification of energy efficiency audits and compliance of achieved savings!!!

9. Energy efficiency support scheme • White certificates – issuance (4) • Property rights under white certificates are transferable and may be traded on a commodity exchange • Property rights under a white certificate originate upon the entry of such certificate for the first time in an account in the register of white certificates • Transfer of property rights under a white certificate is deemed effectuated upon the making of a relevant entry in the register of white certificates

10. Energy efficiency support scheme • White certificates – fines • Energy sector companies, final customers, brokerage houses and commodity brokerage houses – a fine of no more than 10% of revenue generated in the fiscal year preceding the year in which such fine is to be imposed, if such party: • fails to fulfil the requirement to obtain white certificates and submit them to the President of the ERO for redemption or to pay the substitution fee • fails to submit documents or information requested by the President of the ERO by specified deadlines • submitted to the President of the ERO a request for the redemption of white certificates that contained false data • Parties implementing projects aimed at improving energy efficiency – a fine of no more than the PLN equivalent of EUR 2,000,000, if such party, among others: • provided false or misleading information in its declaration in a given tender • failed to complete a project as promised • failed to notify the President of the ERO on time about the completion of a project or provided false or misleading information • achieved energy savings lower than those stated in its declaration submitted in a given tender, as confirmed during the verification of such data

11. Thank you for your attention • Grzegorz Filipowicz • Associate • grzegorz.filipowicz@nortonrose.com • +48 22 581 49 45 • Norton Rose Piotr Strawa and Partners, LP • Pl. Piłsudskiego 2 • 00-073 Warsaw • nortonrose.com

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