2023 Energy Summary

15 December 2023 | Knowledge, News, The Right Focus

The beginning of a new year is the perfect time to summarise the past twelve months, taking stock of our successes and challenges. So, within the pages of this article we check, which of the legal regulations introduced in 2023 support the Polish energy transition energy and create new investment opportunities, and we highlight the challenges facing the energy market in 2024.

The most significant legal changes introduced in the last year for the Polish energy market include:

  • Liberalisation of direct line legal regulations
    • Enabling the direct connection of an electricity generating unit with an energy company, other than the generator of the installation, selling energy, for the direct supply of electricity to facilities, devices or installations of that entity, instead of, as before, the ability to connect between the generating unit and the installations of the energy company concerned
    • Replacement of the obligation to obtain approval from the President of the ERO for the construction of a direct line before issuing a construction permit in favour of the obligation to notify the President of the ERO of the construction or further use of a direct line
    • Exemption from the obligation to prepare an expert report on the impact of a given direct line or of devices, installations or grids connected to it on the power system containing generating units with an installed capacity of up to 2MW
    • However end-users of energy supplied by a direct line will be charged with a solidarity fee and a fee to cover the costs of maintaining system quality standards and reliability of the current electricity supply

[Art. 7aa (4) of Energy Law Act of 10 April 1997 (Polish Journal of Laws of 2022 r. item 1385 as amended)]

  • Extention of cable pooling
    • Removal of the obligation to connect installations sharing a connection (hybrid RES installation) to the same grid, as well as the limitation of the voltage rating of this grid to 110 kV
    • Removal of the restriction of the location of a hybrid RES installation to the area of one poviat (local entity) or five bordering municipalities,
    • Introduction of an obligation to install energy storage within a hybrid RES installation
    • Introduction of regulations concerning exceeding the connection power specified for a given connection point – in this case, the grid operator will charge a fee for exceeding the connection power by the generator, in the amount corresponding to the fee for illegal electricity off-take in relation to the excess electricity that was injected into the grid by the generator as a result of the exceeding, and the operator may also introduce appropriate restrictions

[Art. 2 (11a) of Renewable Energy Sources Act of 20 February 2015 (Polish Journal of Laws of 2023 item. 1436 as amended)]

  • Creating a market for renewable hydrogen
    • Introduce into legislation of a definition of renewable hydrogen meaning hydrogen produced from RES or by electrolysis
    • Extension of the guarantee of the origin system to renewable hydrogen
    • Legislative work has been conducted on enabling hydrogen to be transported through gas grids by proposing solutions for the introduction of hydrogen operators and the operation of hydrogen – the project has not yet been the subject of parliamentary work

[Art. 2 (36a) and Art. 120 of Renewable Energy Sources Act of 20 February 2015 (Polish Journal of Laws of 2023 item. 1436 as amended), project nr UD382]

  • Creating a market for biomethane
    • Introduction into the legal system of a definition of biomethane, meaning purified gas extracted from biogas, agricultural biogas or renewable hydrogen, fed into a gas grid or transported in compressed or liquefied form or used for fuelling motor vehicles
    • Extension of the guarantee of the origin system to biomethane
    • The gas distribution system operator is obliged to indicate an alternative nearest location for the installation of biomethane in case connection conditions are refused
    • Increasing the range of permissible differences between the average combustion heat value of gaseous fuels for a given day and the combustion heat value of gaseous fuels determined at any point in a given area from 3 per cent to 4 per cent in the case of injection of biomethane into gas networks,
    • Introducing a support system for biomethane installations with an installed capacity of 1 MW or less – whereby large-scale potential for biomethane development is estimated in Poland

[Art. 2 (3c) in relations to Art. 120 and Art. 83l Renewable Energy Sources Act of 20 February 2015 (Polish Journal of Laws of 2023 item. 1436 as amended), Art. 7 (1e) of Energy Law Act of 10 April 1997 r. (Polish Journal of Laws of 2022 r. item 1385 as amended), project nr 1090]

  • Development of dispersed and citizen energy
    • Introducing the obligation of participation in an energy cluster agreement of at least a local government unit (LGU) or a capital company established by an LGU with its seat in the territory of the energy cluster or a capital company whose share in the capital of the above-mentioned company is greater than 50% or exceeds 50% of the number of shares or stocks
    • Enabling the creation of citizen energy communities entitled to operate in the following areas: generation, distribution, sale, trading, aggregation, storage of energy, development of energy efficiency projects, provision of other energy services (including flexibility services) or production, consumption, storage or sale of biogas, agricultural biogas, biomass and biomass of agricultural origin – the purpose of the community is to provide environmental, economic or social benefits for its members, shareholders or partners or the local areas in which it operates

[Art. 2 (15a) of Renewable Energy Sources Act of 20 February 2015 (Polish Journal of Laws of 2023 item. 1436 as amended) and Art. 3 (13f) of Energy Law Act of 10 April 1997 r. (Polish Journal of Laws of 2022 r. item 1385 as amended)]

Challenges in the Polish energy market for 2024

The above legal regulations introduced to the Polish energy system are only part of the legislative changes adopted in the past year. The effectiveness of the new solutions will be tested in the coming year.

However, the legislative works started in 2023 have not been completed in many areas.

The challenge still remains to return to market principles for the operation of the energy, gas and heat market. The adopted amendment to the specific acts for the above-mentioned markets, extending the maximum energy prices until 30 June 2024, should be a transitional solution, in particular not stopping the development of renewable energy in Poland.

Meanwhile, the wind sector is looking forward to the liberalisation of the Wind Power Investment Act.

The draft amendment was proposed in November, but was ultimately not adopted and is likely to be subject of a separate legislative process.

A positive effect of the draft is that it restarts the debate on socially acceptable rules for the location of onshore wind farms. The adoption of a minimum acceptable distance of 300 m for the lowest noise wind turbine proposed in the above-mentioned draft will be subject to further consultation.

There are many more challenges facing the Polish energy sector.

The update of the PEP2040, in accordance with the legislative direction of the EU, is expected to, among other things: increase the ambition of the share of particular RES in the energy mix, accelerate the development of offshore wind and nuclear energy, define a plan for phasing out or converting high-emission power plants, and accelerate the modernisation of electricity grids to increase their capacity. If we see the Polish energy transition as a necessity for protecting the planet and boosting the economy, the above goals should not be just mere wishes, but should be solid plans, solidified into energy milestones for the coming 2024.

Any questions? Get in touch with us

Wojciech Wrochna

Jacek Kozikowski

Kamila Jachnik-Czarnecka

Aleksandra Pinkas

 

 

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Contact us:

Wojciech Wrochna, LL.M.

Wojciech Wrochna, LL.M.

Partner, Head of Energy, Infrastructure & Environment Practices Group

+48 734 189 743

w.wrochna@kochanski.pl

Jacek Kozikowski, PhD, LL.M.

Jacek Kozikowski, PhD, LL.M.

Attorney at Law, Partner, Head of Infrastructure and Asian Desk

+48 660 765 914

j.kozikowski@kochanski.pl

Kamila Jachnik-Czarnecka

Kamila Jachnik-Czarnecka

Attorney at Law, Senior Associate

+48 788 474 359

k.jachnik@kochanski.pl