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POLAND WILL MISS THE 2020 RES TARGET AND PAY DEARLY FOR IT

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It is finally being acknowledged that Poland will miss the 2020 target for its share of renewable energy and will face a cost of up to 8 billion PLN.  The facts have been recognized by the Supreme Audit Office which suggested the huge cost of having to buy green energy from other EU member states.



The comes largely because Poland squander its first eleven billion zlotys in RES support by giving the funding to existing coal-fired power plants that added biomass fuel and to existing hydro plants that were already built before the RES obligation was even imagined. No new capacity for generation of renewable energy was created by this policy and the share of RES it promoted was largely temporary (as power plants closed or stopped burning biomass). The suppression of other technologies by deflated green certificate prices and the delays caused by the auction procedures thwarted new projects for years.  

Now the Polish Government is apparently accepting the notion of green energy, but only af…

CRITICAL BARRIERS TO MANAGING HAZARDOUS WASTE IN AFRICA

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Note: A shorter version of this post will appear as an article in ReSource Magazine (South Africa).

Discussions of hazardous waste in Africa all come down to the same issue: how to get from an essentially unregulated situation to a well-regulated system with adequate commercial waste management capacity.In some ways, the prevalence of open dumping of municipal wastes mask a possibly larger problem. As rules tighten, the incentives to avoids or ignore the rules grows. The plethora of new hazardous wastes rules in Africa creates huge incentives for non-compliance. These incentives reach a crisis level when there are few or no legal alternatives within many African countries and the ability to export the waste to better facilities in other African countries is overly restrictive. We will likely find that the literal mountains of municipal waste in open dumps have provided a low-cost – if illegal – option for hazardous waste dumping. Vast territory and limited enforcement capacities in Afr…

Renewable Energy Constructions Lags Due to Auction Mechanism

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You always hate to say later that your dire prediction was correct. Few folks get credos for being the bearers of bad news.

But when the auction mechanism was introduced in Poland and the EU a few years ago, many of us predicted that it would impact RES investment in a serious manner. And not for the good.

Ther auction requires projects be permitted and approved and have complete designs and building permits (which in Poland are vastly more detailed than in many other countries). The front-end requirements are serious and more serious for smaller projects, where they are a larger percent of the total investment.

Having cleared those hurdles, you are left with waiting for the auction and then going to construction. The period after the auction to build varies with the type of project, but it is considerable. The financial support for the project needs to be obviously closed in this period, it cannot be closed prior to the auction except in general terms.

So we have delays for project d…

Polish Government Has Systematically Under-Estimated the Difficulty of Switching Support Systems

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When the Polish Government began years ago to start the notion of completely changing the support system to an auction and away from Green Certificates, several of us raised issues about the difficulty in making a transition.

The European Commission's movement to auctions was largely sparked by the big utilities - who have huge advantages in this system. See comments of Polish Biogas Association. Smaller projects have disproportionately higher front-end costs and historically do poorly in auction systems wherever they are introduced.

To offset this problem, the Polish law has been amended to provide guarantee support for small biogas projects under 1 MW at a rate that is 90% of the reference price in the auctions. This is an excellent provision, although it is set at a level that is too low to optimize biogas development in Poland across many projects. [We suggested a 2 MW cap]. Most biogas projects selected under the old system were over 1 MW due to improved efficiencies at that …

Energy Storage Set to Change the Energy Sector

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I have been joining many others in predicting that energy storage will change forever the electricity sector. As its costs sharply decrease every year, we are seeing more and more projects.

The underlying dynamic is that the grid's electricity capacity is used very inefficiently.

This is as famous duck curve, which shows how the capacity is under-utilized over much of the day:


Source: Stanford University, California Independent System Operator (CAISO)'s "duck curve" (2016).


The average utilization ate for the grid's capacity is about 55%. A large chunk of the generation capacity is only used a fraction of the year. This is highly inefficient and expensive to energy consumers.

Energy storage breaks this pattern by flattening the curve, allowing electricity produced in low demand periods to be available in high demand periods.

Energy storage is now a market reality and will be an increasingly important part of the grid as well as individual end-user energy strategie…

Polish Legislature Passes New RES law: Great News for Biogas

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I have argued for several years that auctions are singularly ill-suited for biogas projects. The upfront cost of developing a biogas project is proportionally more than other RES technologies, so the risk of not obtaining support at the completion of project development is very high. See discussion on Polish Biogas Association on support mechanisms.  In English here. More discussion here.

Now the new government has recognized this and provides for biogas plants up to 1 MW to receive an guaranteed level of support. The reference prices have now also been adjusted to allow for profitable biogas projects that are well-structured and utilize heat. See Polish Biogas Association comments on reference prices 2015.  The direct sale of electricity is also allowed for these small projects which enormously incentivizes cooperation with food and meat plants that can provide their wastes in a nearby biogas plant. The full legislative text will be finalized shortly.

The critical issue now is the le…

New Rules on Polish Auctions for Biogas

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The shape of the RES amendments now proceeding in the legislature in Poland reflects what I predicted. This is the first set of rules to have been scrutinized by the European Commission DG Competition on state aid and the changes are generally better for RES developers. There is strong support for biogas in both pricing and procedures.

The reference price in the auction is quite acceptable, especially for projects that use waste feed stock and have heat sale contracts. The apparent shift in calculating state aid deductions from the energy price awarded will put plants without government grants on equal footing in the bidding.

These amendments were required by the European Commission to allow the auctions to proceed under compliance with EU state aid rules. This is the first major adjustment of the Polish system to comply.  It also adds some wind capacity to the auctions and signals a change in the dogmatic position on wind, which the European Commission no doubt found objectionable.  …