Poland’s struggling renewable sector could collapse over “unpredictable” government moves
Polish renewable energy companies have warned of a likely wave of bankruptcies in the sector, resulting from a recent revamp of the national renewable energy law.
The Polish senate passed an update to the law last week tieing the amount of the so-called substitution fee to the market price of green certificates.
The fee is paid by companies failing to produce a certain amount of green certificates. These are traded by power companies to prove that some of the energy they transmit or distribute comes from renewable sources.
Green certificates have lost about 90% of their value in the past few years due to oversupply. According to the new bill, the substitution fee must not exceed 125% of the certificates’ market price.
The substitution fee – designed to encourage use of renewable power – is currently set at a fixed level of just over PLN300 (€70.6) per megawatt hour.
Hedging against volatility in green certificate prices, many renewable energy companies have their sales contract indexed to the fixed amount of the substitution fee.
These companies are now concerned that energy buyers will insist on renegotiating these contracts. Moreover, they argue the new law will limit the potential for growth in the green certificate price.
"[The changes in the law] constitute yet another proof how unstable the regulations concerning renewable energy are, how unpredictable state actions are and how risky investing in renewable energy sources is Poland has become," a statement from the Polish Wind Energy Association said last week.
Polish renewable energy companies have been hit by regulation under the administration of the conservative Law and Justice Party.
In a controversial change last year, new wind developments were restricted to locations not closer to residential areas than the ten-fold height of a wind turbine.