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Showing posts from September, 2014

Shale Gas in Poland: Different Conditions Seem to Foretell Failure

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With the number of concessions falling, more companies dropping out, and the general negative reaction to the new Polish rules, shale gas here seems to be an illusive dream.  The depth to the Polish reserves is greater than almost anywhere is the United States. You cannot own the mineral rights in Poland and must make expensive accommodations with the government. The number of exploratory wells is a very, very tiny fraction of what was done in the United States before commercial development was feasible. The major international firms have left the market.

Reliance on shale gas in the Polish national energy plans (and dreams) seemed naive from the get go to experts.

This wishful thinking continues right up to the plans for the 2050 energy blueprint. Something that reminds us that these national planning documents are frequently about as probative as Stalin's Five Year Plans. They do seem to come from the same socialist tradition!

With Polish coal-fired power units struggling to e…

Grid scale Energy Storage is Commercially Feasible and Cheaper than the Polish Plan

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Yesterday, Gramwzielone in Poland posted an article on the first commercial grid scale energy storage project to go in operation in Germany. The Schwerin local power company Wemag is starting operations on a 5 MW magnesium ion battery storage system. The technology is from the United States, acquired by the purchase of the American company Xtreme Power. Because of its response time and its ability to make a contribution to both the top and the bottom of the energy demand curve, the supplier "Younicos ensures that energy storage with a capacity of 5 MW will provide the same stabilization of the network as a conventional power plant with a capacity of 50 MW. "



This result can be expected given the studies of the cost-effectiveness of energy storage versus the use of entire power plants as "peakers" - just operating during the times of peak demand. See EPRI California Study.  Some slides from Janice Lin's presentation at the Third Annual Energy Storage Internatio…

Developments in the EU on Waste Producer Issues

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On December 4th, 2014, CHWMEG (www.chwmeg.org) will sponsor a one-day conference in Warsaw on recent developments in the EU that affect the producers of industrial waste. The meeting will include experts across a variety of organizations, discussing regulatory developments in Central Europe that affect companies generating wastes.

From the interpretation of recent European Court of Justice (now CJEU) in new cases under the Environmental Liability Directive to regulatory changes implementing EU directives, the expert panels will cover the issues that matter to manufacturers in this region. Multiple laws now allow authorities to make waste producers responsible for the final safe disposal or treatment of their waste. Participants will also learn how the major companies reduce their exposure to financial liability and protect their brand names by pro-active programs to monitor their waste vendors.

The meeting is modestly priced and will be held at the Westin Hotel in  Warsaw. For detai…

In Defense of the Unlawful State Aid: Superficial Gibberish

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The law firm of K & L Gates recently published an analysis attempting to defend why the Polish Green Certificates were not state aid. Although both the learned former head of UOKiK and the European Commission DG Competition have signaled that they are state aid, and every single certificate program[1] to promote renewable energy has been found by the Commission to constitute state aid, this law firm provides not even a fig leaf of law to support the opposite conclusion.

Their memorandum neglects to mention the very important Dutch NOx decision by the European Court of Justice as well as numerous Commission decisions that undermine their premise (that only systems that guaranteed the certificate value with state money are state aid - a fanciful notion that is completely at odds with the case law).[2]

 This legal pandering is worst than useless because it encourages the Polish Government to run the gantlet on this issue.[3] The inevitable result of such a gamble will be a total disa…

Biogas Support Levels Compared to the Cost of Producing Electricity

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I have put together this interesting graphic to depict what the different assumptions about support mean in the new Polish law being debated now. This does not reflect the value of heat sales or support for co-generation, which are critical to having a profitable project. It does show the relative inefficiency of smaller projects. The graphic also clearly illustrates the problem of buying substrates (such as grain or silage) and their very high contribution to the end price per kWhr.

The values used cover a variety of scenarios. The 1.4 correction factor was the original Ministry of Economy proposal. The 2 factor is slightly lower than the IEO report recommended last year. The auction value would be the reference price (maximum in the auction) which will be lower somewhat, but not significantly since there will be too few projects below 1 MW to create real competition in the bidding as the proposal now stands. It is questionable whether the Polish proposed auctions can be approved und…

Polish Biogas Association Comments on New Draft Law

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PBA filed detailed comments on the new law, stressing changes that do not require higher subsidies, but improve biogas productivity. More waste substrates can be handled to reduce the impact of their management on consumers. Green Certificates should continue for small projects that allow direct sales of electricity, again saving consumers money. All types of biogas should benefit the same from regulatory procedural incentives, with support levels adjusted by cost of production as required by the EU state aid rules.

These issues have been raised for the four years that the draft legislation has been circulating. Since biogas remains a major part of the national plan to meet the 2020 EU renewable energy mandate, as well as providing many additional benefits, the revisions should be oincluded in the amendments as a priority matter.

The Polish version of the comments is here. An English version is available on request.

Reality Bites

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The last meeting of the Polish Parliamentary Energy Committee several days ago  may represent a turning point on the law. For the first time in four years, there was a real discussion of the implications of state aid requirements in the European Treaty. Don't expect to Google this and find a sophisticated discussion of the past Commission decisions or the ECJ decision in the Dutch NOx case, but there was a glimmer of realization.

Hey, we need to actually have a RES support system that meets the European Commission rules on state aid. That seems to require that the Commission approve of what support system is implemented.  The critical step of figuring out what is actually required to meet the state aid rules is still seemingly beyond the scope of legislative discussion... but there seems to be a new awareness that something important is involved.

This is ironic in many ways. The Polish Government had a competition specialist heading the Office of Competition and Consumer Protectio…