RWE halts Polish investment ahead of new renewables law

By bne IntelliNews September 26, 2013

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Boosting its renewables capacity to 200 megawatts (MW), RWE Poland launched its sixth wind farm on September 25. However, the German giant warned that it won't plough any more investment into the country until Warsaw finally offers some regulatory certainty.

Renewables arm RWE Innogy inaugurated the Nowy Staw wind farm, close to the city of Gdansk on the Baltic coast. The 45MW plant will meet annual demand from more than 50,000 homes, the company claims.

In a statement, chief operating officer Paul Coffey made all the right noises. "Wind power in Poland is a success story," he claimed. "Nowy Staw was rapidly realised like all of our wind projects in Poland. Our success here is thanks to the excellent cooperation with local partners and authorities as well as the support from our affiliated company RWE Polska."

However, other company officials expressed less optimism. Although RWE insists Poland is one its green energy unit's core markets, as it offers plenty of excellent wind farm locations, the company is unhappy with current investment conditions and called for regulation issues to be resolved for before making further investments.

RWE Innogy points out that Poland accounts for 200MW of its 1.8GW capacity in European onshore wind, and insists it would like to expand its Polish generation. However, Managing Director Hans Bunting told green energy magazine Recharge: "We want to resume this success story, but now first will await the new law for the build-up of renewables in Poland. Reliable framework regulations are essential for our continued investments."

It's the latest warning to bureaucrats in Warsaw, who are currently pushing a fifth draft of a new regulatory framework on support for the power industry. The ministries are locked in conflict with investors as they seek to write up legislation that would pull subsidies from onshore wind power projects to offer greater support to offshore projects - a segment dominated by state-controlled companies.

On September 17, following over 18 months of arguments with investors, the Ministry of Economy put forward its latest draft bill. Apparently, the deep disagreement over the details of which technology to support wasn't enough for the officials, who have now taken several steps back to announce that the entire support scheme will be completely changed, from one based on green certificates to an auction system.

Likely more controversially, the proposition would affect not only future investments, but also existing ones. It's estimated that under the current system, renewables support would hit PLN8.9bn (€2.1bn) in 2020. The new structure would trim that figure to PLN4.2bn, according to legal firm and consultancy Schoenherr.

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