Profitable Niches in Polish Renewable Energy

While the green certificate prices are wiping out anyone who depends on this support mechanism, and the next round of auctions for support under the new system are delayed by European Commission review, there still is emerging clear evidence of successful niche markets in Polish RES.

Biogas will receive 550 PLN/MWhr and will hopefully receive co-generation support under new legislation still to be passed. At this price, biogas from organic wastes from food, poultry and meat processing is profitable. Household food waste may promise to add to the substrates as the EU moves to require separate collections. However, biogas plants (mesophilic) using farm substrates (manure, silage and grain) are not profitable at the same level of support without capex grants. Virtually all of the farm-based plants in Poland started with grant support. Existing biogas plants on farms have moved to "blue certificates" based on a unique obligation of electricity providers to have a certain number of them. This was kept their value high, but their legal status in light of European Commission review is uncertain. They are clearly not technologically-neutral under the state aid rules. The final result is that organic waste biogas seems to be well-positioned under the new rules and has widespread political support.

PV solar projects in the 1 MW range are also winners under the new system. Over a hundred PV projects won support in the December 2016 auction. The 2017 reference price for PV up to 1 MW is 450 PLN/MWhr. Grants are also sometimes available for this type of project as well. An interesting ripple is that Polish law allows stored energy to be still considered green energy and entitled to support. However, the system is only set up to support sale to the grid. The grid is Poland does not provide for differential pricing on peak and off-peak supply. But changes in the Polish system - if possible - could seriously and positively impact PV in this area.


With the move to limit wind energy in Poland, these niches are the area with the most promise for investors. Some of the Polish wind restrictions will likely be thrown out in court, but the delays have created enormous problems for that sector. Being forced to rely upon green certificates that have dropped from 270 PLN/MWhr to below 40 PLN/MWhr is also raising questions about how many of this operators will be around to see the expected legal victories in their court challenges. The government can readily limit new wind projects via the size of the auction basket, so even with legal victories, it seems unlikely that wind will progress without a change in the policies of the Polish Government.

There are projects in PV/organic waste biogas that will draw investors, particularly if projects are bundled to make the investment more attractive. Any moves by the European Commission should not affect this situation, since it is most likely that they will push Poland to do straight-up technology baskets (dropping a couple of hybrid and more complex baskets) and possibly forcing existing biogas plants into the new support system by action on the "blue certificates."

INQUIRIES welcomed: randymott (at) ceeres.pl


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