New legislation on renewable energy threatens wider Polish power system warns Moody's

By bne IntelliNews June 29, 2016

New legislation in Poland on the renewable energy sector is set to reduce investment, Moody’s warned on June 29. That could reduce crucial generation capacity.

Poland is pressing to reduce the role of renewable energy sector in its energy mix, in a bid to instead support the country's struggling coal mines, which already provide fuel for over 80% of power generation. The new law on energy from renewable sources, which was signed by the president on June 28, stipulates replacing the current system of green certificates with auctions, in which renewable energy companies would bid for subsidies. Poland also recently passed a bill specifically aimed at curbing wind power development.

The new legislation will clearly hit investment, Moody's notes, adding that will in turn lead to a reduction in the 'reserve margin,' or the country's level of capacity above anticipated peak demand. That would essentially wipe out the power system’s safety net. In theory, renewable energy capacity could cover for at least some conventional capacity that is set for decommissioning in the coming years.

Under the new legislation on the wider green energy sector, auctions would be organised separately according to the size of installation and type of technology. The ministry of environment has also said Poland should support biomass and biogas projects in particular, as that would in turn help Polish farmers.

The bill curbing the development of wind power restricts wind installations to areas no closer than ten times total height of the turbine from housing areas. That will rule out the vast majority of sites, the wind industry complains.

If there is upside to these recent regulations, Moody’s claims, it is that the reduction in reserve margin will "provide some upside to the wholesale power prices." That would clearly be a positive for conventional power producers, such as state-controlled utilities PGE or, which have been suffering because of low energy prices of late. Some have also been pulled into investment into the coal industry also.

Poland has an EU-imposed target of reaching 15% of energy from renewable sources in final energy consumption by 2020. The country was at about 11.45% in 2015, which represented growth of just 0.15pp against 2014, increasing concerns the target will not be met.

 

 

 

 

 

 

 

Related Articles

Poland eyeing second LNG terminal

Gaz-System has selected a contractor to carry out a feasibility study on the construction of a second Polish LNG terminal, the state-owned gas grid operator said on March 27. Poland has recently ... more

Latvia heads off Russian gas mischief with legislation on strategic companies

The Latvian parliament passed amendments to national security and commercial laws on March 23, handing the state the power to block the sale of companies considered strategic. The legislation will ... more

Enea buys French utility out of Poland

Enea has acquired a 100% stake in Engie Energia Polska - the Polish business of French power company Engie - for PLN1.26bn (€290mn), the state controlled Polish utility said on March 14. The ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss