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Seminar - A new model of Green Certificates Market

By Maria Przekopowska, CBE Polska

New announced law about renewable energy sources is at the moment on the level of social consultancy. The one of key elements of the law are big changes in functioning of the current model supporting the energy from the renewable sources- so called "green certificates". New law will keep in force a part of a current certification system, as well as the fact that the system is changing to the way in which the majority of European systems functions. Starting from now, we can notice an objection of Representatives of the branch and investors regarding the solutions proposed. According to Andrzej Rubczynski, Director of Development Department in PGNiG Termika SA: "Because of incoherency of the new regulations, year 2012 will be a very hard year for renewable energy investors. The regulations which are in a level of social consultancy, will probably come into force in the end of 2012 and it means that in connection to such uncertain situation it is very unlikely that new investments will be made"
A large number of energy market representatives, are predicting a bad scenario for the market after the new regulations implementation. The companies are warning that the current shape of regulations will block instead of stimulationg,the development of renewable energy sources. Experts emphasize that the corrections should be made at the moment, as now is a right time to do so. In connection to significant changes in the regulatory environment, on 31st January 2012 in Warsaw, there was held a seminar entitled" A new model of green certificates market" organized by CBE Polska Team. The partners of the event were an international law office Linklaters and a Dutch brokerage company - STX Services. The patronage was taken over by Instytut Energetyki Odnawialnej (The Institute of Renewable Energy)-EC BREC IEO and Związek Pracodawców Forum Energetyki Odnawialnej- ZP FEO ( The Association of Employers od Renewable Energy Forum). During the event Polish and foreign experts analized the project of new regulations, presented foreign experience and possibility of implementation of the best solutions in Poland. According to Dr. Zdzislaw Muras: " According to the new project of regulations about renewable energy, there aren't many opportunities for the balanced development. What we should do is to take the best examples of European solutions and implement them into the new project of Polish system. A good support system is a key stimulus for renewable energy market development. System should be coterminous as in another case there is no pressure for innovations development"
Thomas Schultz, Partner and a Head of Renewable Energy Team from the Office in Berlin, Law Office Linklaters says : " A good system is the one, which secures business of renewable energy developers. The regulatory institution and legislator should create such regulatory environment to enable stability of investments environment. The great example od such system is Germany. The federal governemnet pressumed a part of renewable energy of 35% until 2020 and 80% until year 2050.To achieve it, there were the following implementations made, for example: regulations regarding acquired law,transitional periods and constitutional rule of reasonable business protection. Furthermore, the rules for reception of new sources were precisely defined as well as the rules of adding new sources and the permanent guaranteed tarriff ( for a period of 20 years). The second example of well-functioning market is the Great Britain, where, besides the standard quotation system, there was added the feed in tarriff module. Except big manufacturers, the support can be given to micro sources as well as to all the units, despite the fact if they use the energy for themselves or for networks". Dr Bartosz Solinski from the Institute of Management in Energetics from the Department of Management in AGH University of Science and Technology talks about the systems that function in Czech Republic, Ukraine, Spain and Romania.

National regulations and the model of support system in proposed new Renewable Energy Regulations.

The new law regarding the functioning of support system was divided into two separate regulations: a new one called " Energetic Law" and a regulation about Renewable Energy Sources. There are advantages and disadvantages of this. According to Dr. Zdzislaw Muras: There is no conherence between the regulations. Moreover,there is no coherent definition in these regulations. Because of unprecise writings there is a possible danger of double accounting of obligations". Dr. Agnieszka Koniewicz, Law Advisor from Warsaw Department of the Linklaters Law Office shows problems that are a result of regulations according the rules of joining networks. According to her" the new law about renewable energy sources doesn't indicate the rules of energy accounting. There is a risk that the transmission system operator will deny to bring the energy to the system in the case of lack of sales agreement and lack of the namely defined unit responsible for balancing. Lack of these rules will result in conflicts with operators which may finally result in problems with execution of this responsability". Expert speaks also about the proposed periods of grants in the regulations " it should be considered whether the proposed period of 15 years should relate to all the technologies. Probably it is worth to grade it". Dr. Koniewicz adds that the big industrial consumers of the energy are not mentioned in the new project of the system. "If it stays this way- they will be a majority of the group that will be making compalints to the Energy Regulatory Office."

The new rates proposed by the Ministry of Economics are being find very controversial. Representatives of energetics branch who participated in " A new model of green certificate market" held on 31st January 2012 in Warsaw, emphasized that they would like to obtain a reasonable and reliable explanation from the Ministry of Economics about the height of rates.
Maciej Chmielonski from RWE Polska while analyzing the current and planned renewable energy support system from the point of view of a big investor, singalizes the key problems, including:
  • risk connected to the liquidation of energy purchase duty
  • the change in accounting of compensatory payments, which will result in limitation of potential income for a new Renewable Energy projects
  • the solution that enables TSO not to reply to the application of attaching renewable energy to the system- which may indispose an appeal of negative decision or even in blocking the whole system
The experts adds that " because of wrong written project regulations the companies with foreign capital are waiting with realization of their project in Poland. The markets becomes less prospective from the business point of view". Furthermore, he says that " The influenece of new Renewable Energy Sources will be undoubtedly positive for producers of "green energy" for micro-sources of renewable energy, below 40kW of installed power and thank to this a dynamic entrance into force of new regulation will be possible. At the same time the regulation minimalises the support and increase the uncertainity of big and future installations of renewable energy sources- as wind power plants, a big percentage of Polish fullfilment of a duty of renewable energy sources in the final use (gross). It may result in limitation of some investment and in decrease of renewable sources part in the energy mix.

Benefits for Polish Renewable Energy Enterprises from joining European System of Guarantees of Origin

The next update included in the regulation is the implementation of so called "green certificates" and of the system of guarantees of origin of energy. The essential issue is to put them into the regulations in the right way so that in the future they will bring benefits for the potential investors. The guarranty of energy source of origin produced from the renewable sources is strictly related to "green energy" and the main aim of it is to guarantee an ecological character of the energy. But when it comes to so called transferable green energy certificates can be the subject of trade, independently from the real trade of energy. According to Max van Meer and Grzegorz Bilinski from the Dutch STX Services : " Starting from now, despite Poland is only applying for the system, we have got a lot of enquiries from foreign investors interested in Polish guarantees of origin. It is a very prospective market. That is why is it very important for the projected system to comply to standards of key international organizations of certification. We should beware of the situation which occured in Spain, where the system doesn't comply to any standards. The consequences are severe for the country as in result Spain the trade is limited as none of European countries buys guarantees from Spain, because they are incompatible with the standards. Poland is on stage of creating the rules and necessarly has to take on the consideration mistakes made by Spain. We have to be aware that we're playing for high stakes... because according to the Ministry of Economy's report dated to November 2011- in 2010 in Poland there was produced 10,895 Twh of energy. With the average level of GoO prices of 0,50 EUR- it gives a profit of 5,5 mln EUR a year. It is something what is worth fighting for"

Further debates on a topic of Renewable Energy Sources Regulations

"Thanks to the systematic research and our experts' support, as the first ones in the market, we organized a debate on the topic of European renewable energy market and prospects of the best polish legislative solutions implementation. In a very short period of time from the publication of the project we managed to start cooperation with the key Speakers and Representatices of power energy companies, who had an oportunity to share their opinions and to show the biggest risk of regulations.Good points and opinions of participants of the seminar resulted in desion of debate continuation during upcoming event organized by our company- assured Maria Przekopowska, Managing Director of CBE Polska." Starting from 9th March 2012, we invite you to our next workshop " The new regulations and mechanism of Renewable Energy support. Range, Validation, Consequences for the market", which will be held in Warsaw. The event will be divided into two blocks- the first one will be dedicated to discussion on the topic of changes made in the law, while the second one will be anlysis of new mechanism and support instruments in relation to renewable energy regulation- she added.

As Organizer- Center for Business Education company would like to say thank you to all the participants, Experts as well as Partners and Patrons.
Once again, we'd like to thank you for your trust and we would like to invite to participate in our upcoming projects. Furthermore, we inform that there is a possibility to publish all conclusions of the guests and Experts.
If you have any suggestions or comments- please send it to us and we will publish them on the website of the event. Additionally, if the comment will be related to the topic of biomass use for energetic purposes, we will publish them on the webgage of our thematic portal: www.spalaniebiomasy.pl