New Rules on Polish Auctions for Biogas

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.  Poland can control the size of the baskets offered in the auction for each technology, but otherwise needs to apply a technology neutral standard.

"Agricultural biogas" is still its own basket and is a bit of a misnomer. It is not just farm-based biogas plants, but includes plants that use food and meat processing residues, which has been my model for project development.

The dilemma will be the relatively small number of projects ready to go in 2018. The lead time for biogas development is longer than any other RES due to the additional agreements necessary on feed stock and other issues. But the government has also announced 2019 total support for biogas at relatively high levels. Sound projects can now be planned knowing the support level and that it is approved by the European Commission.

For more information: randymott AT ceeres.pl

Comments

Randy Mott said…
It got even better with the latest amendments now providing for a feed-in tariff for up to 1 MW size plants that is 90% of the reference price. No auction in that case! Something we worked on for years as the biogas industry.

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