Auction-based support scheme

One of support schemes available in Poland is the auction-based support scheme regulated in the RES Act¹. It grants the winners of the auctions the right to cover the negative balance for the period indicated by the generator in its bid, but for no longer than the period indicated in the regulation² in force on the date the bid is submitted. This period may not extend beyond 30 June 2047 for existing and new installations or 31 December 2045 for modernised installations³.

The negative balance is the difference between the net value of energy sales in a given month (calculated on the basis of exchange prices of electricity) and the net value of this energy calculated by taking the prices indicated by the generator in the bid which won the auction.

The volume of generated energy, which is subject to settlement, is determined on the basis of indications metering equipment in a given month. The generator informs the dedicated settlement administrator, i.e. Zarządca Rozliczeń S.A., by the 15th day of the following month, about:

1. (a)     volumes and prices of energy sold in the previous month,

2. (b)     data concerning the value of energy (prices published by the Polish energy exchange, i.e. Towarowa Giełda Energii S.A.).

While providing the information above the generator applies to Zarządca Rozliczeń S.A. to cover the negative balance.

If there is a positive balance in a given month, it is settled against a future negative balance. The positive balance that has not been completely settled by the end of a given period of every full three calendar years and the positive balance remaining at the end of the period during which the right to cover the negative balance is granted is to be reimbursed within 6 months of the end of the given period, to Zarząd Rozliczeń S.A. by the electricity generator.

The prices specified in the successful bids are subject to annual adjustment by the annual average consumer price index for the previous calendar year announced by the President of Polish Central Statistical Office.

Cable pooling and auctions

The recent amendment⁴ to the Polish Energy Law introduced regulations enabling the sharing of a grid connection, the so-called cable pooling, came into force. Two or more RES installations of one or more kinds belonging to one or more entities may be connected to the electricity grid with a rated voltage higher than 1 kV at a single grid connection point.

For all RES installations connected to the grid using the cable pooling, there are issued single grid connection conditions followed by conclusion of a single grid connection agreement and a single transmission or distribution agreement.

In accordance with the official information issued by the President of the Polish Energy Regulatory Office⁵ the cable pooling may be applied in a situation where an application for gird connection conditions:

(a)    covers the first grid connection of two or more RES installations; or

(b)    is submitted in a situation where grid connection conditions have been previously issued for the ‘first’ RES installation and a grid connection agreement has been concluded, and the grid connected entity is applying for the grid connection of a second or subsequent RES installation; or

(c)    is submitted in a situation where an RES installation is connected to the grid (existing installation and constructed connection) and the grid connected entity is applying for the connection of a second or subsequent RES installation.

If RES installations belong to multiple entities, there is a legal requirement to conclude an agreement between the owners of the RES installations concerned. Such agreement should include i.e. parties of the agreement, terms and conditions for the joint exercise of rights and obligations arising from the grid connection conditions, the grid connection agreement and the electricity transmission or distribution services agreement, the terms and conditions for the distribution of funds received as financial compensation due to redispatching of RES installations.

Only one RES installation participating in cable pooling can benefit from any support scheme for renewable energy production provided for in the RES Act.

Redispatching rules

Recently in Poland redispatching of RES installations becomes more and more frequent. Only in May 2024 Polskie Sieci Elektroenergetyczne S.A. (the Polish Transmission System Operator, “TSO”) issued announcements concerning non-market redispatch of PV installations 14 times: 1, 2, 3, 4, 5, 9, 12, 13, 15, 16, 17, 18, 19, 26 May 2024.

The redispatching rules including manner of compensation calculation were incorporated into the Polish Energy Law⁶ and came into force on 7 September 2023⁷. Detailed rules regarding compensation for redispatching are to be determined in the official instruction of the President of the Polish Energy Regulatory Office (the “Instruction”). As of mid-June 2024 the Instruction has not been issued.

Until the date of entry into force of the Instruction the following rules apply for the issuance and execution of the orders to reduce power generation, as well as for the calculation and payment of the compensation for redispatching:

(a)        the compensation for redispatching is calculated and paid on the basis of an agreement determining the amount of such compensation concluded between the electricity system operator issuing the order and the generator or the holder of the energy storage facility;

(b)        the redispatching order should proportionally affect the concerned generating units.