Time to Invest in Renewables in Poland

As the situation is developing in the Polish RES market, everyone with a viable project is rushing to build it. Construction in the next 18-24 months, means that a project can opt for the auction or Green Certificates (which ever appears more advantageous. While uncertainties are keeping the biggest and most conservative investors and banks on the sidelines, the most entrepreneurial folks are jumping in. Smart investors know that the certificate values will go up dramatically due to the European Commission future actions. The small developers will have big problems with an auction system, but well-funded developers will win support and the small auction (now under 1 MW) will create a situation of limited competition.

I have argued without a break that the auction mechanism is bad for small projects. Over 90% of the Polish biogas developers are small investors, often only doing one or two projects. Biogas has difficulties in the auction experiences from other countries. I will continue to make this argument for the sector both in Warsaw and in Brussels.

However, well-funded and well-organized developers can be successful in auctions. Ironically, the DG Competition is pushing a practice that actually results in decreased competition in practice. Companies must make a commitment to develop the projects well in advance of the auction itself in order to prequalifiy and have approvals in place. Those development costs have to be optimized by using "templates" that reduce front-end costs and, most important, by having enough of a pipeline to assure some successful bids to cover the cost of pre-bid work. Successful bids will also be projects tailored to maximize revenue and produce the optimum energy output at the lowest cost. This will not work well for farm-based biogas, so ironically the Ministry of Agriculture's pet RES projects will have the most difficulty, if and when these procedures are implemented.

We are working to organize the funding to proceed to construction on a bundle of some biogas projects in the near future. At the same time, I am looking at energy storage technology from the US which will be the fastest growth sector as wind and PV both will require "smoothing the curve" in the future. Potential partners are welcome to contact me: randymott  @  envirosolutions.co.



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