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On August 29, 2019, the „Corporate Power Purchase Agreement (PPA)" seminar organized by CBE Polska was held at the Courtyard by Marriott Hotel in Katowice.
The seminar was opened by moderator Hanns Koenig, director of Aurora Energy Research. He delivered the presentation "The transition to renewable energy sources without subsidies and the role of PPAs". In his speech, he pointed to the problems facing the development of the renewable energy sector like the lack of government subsidies for such sources. The speech pointed to PPAs as a kind of security for investments in renewable energy sources and further development of this sector.
The introductory lecture with the presentation entitled "Corporate Power Purchase Agreements in Poland" was followed by legal advisor, Associate Partner at Rödl & Partner in Poland - Piotr Mrowiec. The possibilities of PPA application in Poland and their scope were presented. The issue of some kind of interpretation problems affecting these agreements was raised. "There are many discrepancies in the understanding of PPAs, because until recently there were no clear standards for the creation of these contracts" - said Piotr Mrowiec. The issues of restrictions on the use of PPA, the determination of energy sales prices in the contract were explained.
The presentation of the General Partner was given by Dr Rafał Rzeszotarski, General Manager at Sun Investment Group Polska. Using the figures, he presented in the presentation "The most important information on CPPA contracts", the practical application of CPPA in industry and retail. Examples of specific successful projects were pointed out, the possibilities brought by CPPA agreements and measurable benefits associated with their use.
Anna Żyła, Chief Ecologist at Bank Ochrony Środowiska - Strategic Partner of the seminar, talked about what approach to financing renewable energy investments banks have and what dedicated banking products they offer. It was pointed out that on the above mentioned investments are influenced by, among others, support systems and various business formulas in which they are implemented can be financed with a dedicated banking product.
Lars Meckenstock, Head of Asset Commercialization at E.ON Climate & Renewables, showed current trends on the PPA market by comparing the Polish and American markets. E.ON's experience in this matter in Poland has also been described.
A valuable point of the seminar were networking time during the coffee break, when participants of the event exchanged experiences and discussed together with the speakers on the topics raised in the presentations. It was also a good opportunity to visit the exhibitors' stands and learn about the solutions they offer.
Michał Lubieniecki, Partner in the Financial Advisory Department of Deloitte discussed the issue of corporate renewable energy purchase agreements from the perspective of energy producer and business recipient. The mutual benefits of "green" PPA and important aspects important for both sides have been shown. The lecture aimed to show that such agreements create a win-win situation for producers and consumers. After the speech, an interesting discussion ensued with the participants, which dispelled many doubts related to the use of "Green PPA".
In the speech "Practical Corporate PPA Agreement", presented by Paweł Wierzbicki, Head Origination Axpo Polska - the Strategic Partner of the seminar, referred to the challenges faced by recipients and manufacturers bound by the CPPA agreement. Possible solutions and alternatives to these challenges were presented.
The last lecture was given by Annkathrin Rabe, Customer Solutions Manager at Inogy Renewables, which pointed out the risk of not having renewable PPAs in Poland. She referred to the "coal addiction" in the Polish energy sector and showed possible scenarios for the future. In her speech, she also called for renewable energy development based on PPAs to be common sense, securing and strengthening such energy sources.
The substantive part of the seminar ended with a discussion panel "Possibilities of implementing PPAs in Poland", which was attended by:
- Marcin Jamrozik, Partner at the Polowiec & Partners law office,
- Piotr Czopek, Director of the Renewable and Distributed Energy Department at the Ministry of Energy
- Dr Rafał Rzeszotarski, General Manager at Sun Investment Group Polska.
- Grzegorz Wiśniewski, President of the Board of the Institute for Renewable Energy,
- Tomasz Bodetko, Head of the Department of Cooperation with Manufacturers of the Management Division at Energa Obrót,
- Maciej Kowalski, Member of the Board of Enefit,
- Edward Górniak, Director of the Originaton Enea Trading Department,
"Listening to the lectures given today, I come to the conclusion that the interest in corporate PPA will be bigger and bigger. Today there were a lot of interesting speeches, which touched on many topics, starting from legal conditions enabling the creation of such contracts, through investment financing and "banking" of contracts. I would like this discussion panel to be a small summary of today's considerations "- Marcin Jamrozik began. He addressed the first question to Maciej Kowalski, Enefit representative: "How would you describe the level of interest in the market in PPAs?"
"It will definitely be easier for me to indicate who the CPPA is not interested in - households and public administration. Almost all large, medium and small enterprises are very interested. It should also be noted that large state-owned enterprises declared to consider such solutions. The market is still at an early stage of development, therefore there are not too many successes in Poland but it is already visible that this trend will change. A lot of market queries come to us." - summarized President Kowalski.
Another question was directed to President Grzegorz Wiśniewski from the IEO and concerned the identification of the main beneficiaries of PPAs as well as the greatest benefits for producers and consumers. "When we think about producers, we mean mainly owners of solar farms and wind farms. These are, as we all know, the cheapest sources, which gives a huge benefit to the business side of the manufacturing and end users. Due to the limited support system for these energy market segments - PPAs are an incredible development potential. Small and medium-sized companies pay the most for energy on a European scale. If we look at the cost of energy in terms of the overall production costs of an enterprise, in many cases it reaches as much as 12%. In the European Union, the average level is 3-6%. Here, we see a huge difference and a chance for a guaranteed energy price for industrial customers from cPPA. "- he emphasized.
Edward Górniak from Enea Trading was asked about for how long in his opinion we will sign contracts in Poland and how it will affect the electricity market: "I think the electricity market in Poland is changing regardless of whether PPAs are widespread or not. Changes in the energy mix and regulation are striving for more and more renewable energy. We all see the transformation of the Polish energy sector and I think that PPA is a kind of response to market demand. As Enea Group, we are working on such solutions that will meet the requirements of industrial producers and recipients. Here a very large role to be played by trading companies to associate the needs of both parties. We are thinking about building a PPA manufacturing portfolio and a portfolio of industrial entities. By managing both sides' portfolio, we would minimize price and volumetric risk. Thanks to this, we could propose favorable conditions to both parties. As for the length, expectations should be weighed because the recipient would like a contract for a period of 5-7 years, and the producer, mainly due to the desire to make further investments, is interested in a minimum ten-year contract. We need to work it out." - Director Górniak summed up his statement.
Tomasz Bodetko from Energa Obrót assessed whether corporate PPAs are a chance for the development of renewable energy: "As the example of the United States shows, CPPAs can significantly contribute to the development of renewable energy. Current energy prices on the market and technology prices already allow renewable energy sources to be built without state funding. PPAs seem to be an interesting alternative to auctions. The participation of producers in auctions is not dictated by attractive prices, but by the fact that bank financing is needed. PPAs, due to their length, are an interesting answer to this demand. In the long run, the PPA can be more beneficial than the guaranteed price resulting from the auction." - he concluded.
Piotr Czopek, Director of the Department of Renewable and Distributed Energy at the Ministry of Energy, was asked to comment on the auction: "According to the regulations, auctions may take place even in 2021, but it is difficult to go so far at this moment because we do not know whether they will be needed and on what scale. The situation of last year and fluctuations in energy prices have shown that the market is very dynamic. It is thanks to this that wind and solar energy has become very attractive in terms of price and investment, which is reflected in PPAs. "
Continuing the discussion, the Moderator asked if the Ministry of Energy is planning any legal solutions allowing the development of CPPA: "We are absolutely not closed on this topic, now we see ourselves as an observer. The topic arose more widely a year ago and during this time we are watching it. At the moment I see barriers other than regulatory - mainly related to the agreement of the two parties to the contract and the definition of their expectations. During today's discussion, I did not see any elements that require specific strictly legislative intervention. We want to avoid overregulation and making changes for the sake of being "active." Until the market reports barriers, comments and problems, I see no reason why we should change anything. Of course, the Ministry's door is open all the time and we are open for discussion with market representatives about potential changes and support that the Ministry may propose." - concluded Director Czopek.
Rafał Rzeszotarski PhD from Sun Investmet Group responded to the statement: "I would definitely not agree with the statement of Director Czopek that there are no regulatory barriers. Considering the PPA on-site issue and asking the law firms to propose an on-site model for the sales team, trying to meet the expectations of the recipient, considering what to do with excess energy, we get ten completely divergent model descriptions and each must have a production or distribution license. Not only we see this problem, because it appeared in discussions with the Enefit representative and with many other entities as well. I see here a huge field for talks and refining the regulations. Today, the amendment to the RES Act has entered into force, which introduces the possibility of a one-off change in the production capacity at the source, but unfortunately the declared volume cannot be changed. Financing is another issue that requires talks and consideration - I see banks' very limited confidence in PPAs. This has to change, because without this basic work we won't move on. "- the SIG representative finished his speech.
Director Czopek referred to the statement: "I would like to refer to the previous speaker's statement and point out that, as the Ministry, we do not claim that changes in PPA regulations are not needed. We do not identify them at the moment, because the industry does not report any problems or barriers requiring intervention. We are open to any consultations "- he emphasized.
The seminar was of a high standard and the participants were enriched with a lot of valuable knowledge about CPPA contracts and their impact on energy and business.
This article was edited by the CBE Polska team based on an article written by kierunekENERGETYKA.pl and presentations given / showed during the "Corporate Power Purchase Agreement (PPA)" seminar, which took place on August 29, 2019 in Katowice.
Sun Investment Group was the General Partner.
The Strategic Partner was Axpo Polska and Bank Ochrony Środowiska.
The Legal Partner of the seminar was the Polowiec i Wspólnicy Law Firm.
The seminar was moderated by Hanns Koening, Director at Aurora Energy Research,
In addition, the seminar involved: the Ministry of Energy, Rödl & Partner, E.ON Climate & Renewables, Enefit, Innogy Renewables, Deloitte, Energa Obrót, Enea Trading, Institute of Renewable Energy
The event has been held under the Honorary Patronage of: Ministry of Energy, National Fund for Environmental Protection and Water Management, National Energy Conservation Agency, Association of Renewable Energy Friendly Communes, National Energy Conservation Agency, Cracow University of Technology, Agricultural University, Institute of Renewable Energy, Lewiatan Confederation, Mining Academy Metallurgy in Krakow, Silesian University of Technology, Polish Solar Energy Association, Photovoltaic Industry Association.
The translation of the event was provided by BIRETA Professional Translation.
