Mott's Blog

Some really bad things will start to happen as the auction in Poland for renewable energy support gets closer. Despite the long discussion over the new law and the guidelines from Brussels (which were relatively rushed through without full consideration of their consequences), there are some real problems looming. First, the auctions to be competitive under EC policy should have at least as many losers as winners. This allegedly allows for competition in the bids for support. The reality is that the small auction (below 1 MW) will have much larger support offered than will be covered by bids. There will be no serious competition and the reference prices will set the limits. That, of course, could be done without an auction and would achieve a much higher rate of quality projects. But the large auction (over 1 MW) is likely to have many more bids than awards. Thus, the EC rule of thumb of 50% losers may occur. That means that 50% of the projects ready to go in Poland will not procee...

We finally, it appears at least, have a new law on renewable energy in Poland. The process has been ugly, ignorant and often deceitful. Like all efforts at government control of economic activity, it will be full of unintended consequences. The day of reckoning in Brussels has been postponed until now, but not canceled.  The two biggest issues facing the country in RES are first the transition from one support system to another (understanding that many facilities will continue to have Green Certificates, that the quota system remains in place,  and that auctions in 2016 or 2017 may do relatively little to affect the mix of RES in 2020). This issue also has the enormous problem of revolving around unnotified unlawful state aid in the form of the certificates. This year, Poland will likely get the final notice from the Commission that this has to stop, meaning that another piece of legislation trying to retroactively adjust the current system to EU law will be required. This...