Mott's Blog

With 85% of the electricity in Poland supplied by coal, the country is in a unique position of vulnerability in Europe. While the use of coal throughout Europe is declining sharply, it is not changing significantly in Poland. Couple this fact with the steady decline in the profitability of operating coal plants,(1) and you can see nothing to suggest a very bright energy future in Poland under this policy. Recent changes in Poland also seem to clearly have stopped major new wind and PV energy capacity. What we now see in the interim in Poland are the consequences of a lack of energy diversity in the supply.  For the second summer in a row, the coal plants are struggling due to schedule maintenance in the warm weather but also due to low water levels. While the wind can also be lower in these hot and dry months, our neighbors with extensive PV capacity are seeing a nice natural balancing with the hot and clear weather. Poland does not have that asset. Even the long-term st...

Leaked information published in Poland today suggests that the PiS Government will fundamentally change the nature of renewable energy support contained in the prior government's version of the new law.  'State support in the form of a contract does not have to get the source of the most cost-effective, but the disposition by the greatest number of hours per year.  Among the defined limit at the auction they would have been performed in a specific order: the renewable energy sources for power exhibiting the best stability, but not necessarily the cheapest, and finally to the least controllable and disposable....  This means opening up  co-firing  [eg.  coal and biomass from wood], will take precedence.  Then the next blocks will be biomass and biogas, as well as clusters, also considered self-sufficient and stable systems - indicates our source close to the government sources, and knowing the draft amendment. - If a designated  pool of ene...

Never make predictions, especially about the future.                                                                          Casey Stengel By now everyone's predictions on the state of the renewable energy support system in Poland are wrong. The new government has gone back to square one and is working on an overhaul of the law passed last April. The European Commission is finalizing a decision on the green certificate program, including support for co-firing and old hydro, and - at the same time - looking into the law passed last April. It is likely that the Commission is discussing the changes in the new law with the Polish Government right now. Adding to the confusion, much of the RES that the new government in Warsaw seems to like is also problematic.      Whether by the c...

Any day now we expect the European Commission, DG Competition, to announce its decision of the Polish green certificate system as state aid.  Several issues will be addressed and possibly some complex cost recovery issues raised but not entirely answered. The thrust of the complaint in SA 37244 was that support of co-firing was too much and was out of line with the cost of production via that technology. This fact was admitted by the Ministry of Economy and even the former Prime Minister's website. In addition, the support for old hydro plants that were built many years ago was attacked as illegal or incompatible with the rules, since the law precludes providing operating support for projects already fully depreciated.  Much of the law is set out in earlier posts on this blog. Taking the incontrovertible facts about co-firing and old hydro, it appears that co-firing might get a 50% retroactive*  reduction (maybe more?) of aid already provided in line with the adjust...

Ninety-nine percent of the Polish Government has been lying to us or is so uninformed that they do not know the difference. Poland's state support of renewable energy from 2005 to date (old law and new law) are state aid under the European Treaty. No doubts and no qualifications. The only Polish leader who was honest and professional in their opinion on this was Malgorzata Krasnodebska-Tomkiel, head of the Office of Competition and Consumer Protection (UOKiK), for several years.[1] Before the Prime Minister fired her and replaced her with an English teacher, she also was clear that elements of the new law were also state aid. Tomkiel was fired on a Monday that followed the Friday on which the Prime Minister's office received notice of the complaint about the green certificate system from the Commission. This does not mean that the aid under the old law or new law is wrong,, only that it has to be reviewed for consistency with state aid rules designed to minimize the distort...

Increasingly it appears that the new law on renewable energy will not be in effect until substantially later than the latest government prediction. This is no surprise, since the government has been promising a new law within six months for the last two years.  Final approval by both houses of Parliament will go over into 2015, an election year, which will make final consensus difficult. The final figures for renewable energy production and investment for 2014 will reflect the uncertainty and doubts in the market. Perhaps the fact that investors are lined up to invest in Poland in this sector (perhaps as in no other sector) and are only blocked by the government, will leak into the elections themselves. The fact that electricity bills for everyone are higher than legally permitted by the inclusion of subsidies for co-firing and old hydro would seem to be a political liability. Much of this support does nothing to help compliance with the 2020 target, since it is either superfl...