Budapest, September 28-29, 2004 RES – E market developement in Poland

Budapest, September 28-29, 2004 Polish Energy Law since 1997, many times amended The Energy Law aims at: sustainable development of the country, energy security, efficient and rational use of fuels and energy, development of competition, counteracting natural monopolies, protection of consumer’s interest, minimisation of costs, all under consideration of environmental protection.

Budapest, September 28-29, 2004 Quota support system establishment The basis of the present support system for RES has been established by amendment of Energy Law in May 2000 and ordinance of Minister of Economy in December 2000 on obligatory purchase of electricity and heat from renewable energy sources and cogeneration heat and power. Indicated RES-E targets for every year from 2001 to The ordinance states that the share of electricity produced from renewable energy sources should be 7,5% in 2010 (like indicative target for 2001/77/EC Directive).

Budapest, September 28-29, 2004 Main assumptions of the Polish RES-E support mechanism Separated market system only for RES-E Internal competition between varied RES types Price of every sold kWh includes costs of RES-E (all electricity consumers are charged with the costs) President of Energy Regulation Authority supervised realisation of obligatory purchase

Budapest, September 28-29, 2004 RES in Polish Energy Law For July 2003 has operated an ordinance of Minister of Economy, Labour and Social Policy on obligatory purchase of electricity and heat from renewable energy sources and cogeneration heat and power. This ordinance is effect of amendment of Energy Law in July Main changes: Stopped double counting possibility Definitions of RES (in the Energy Law) and biomass (in the ordinance) the same as in 2001/77/EC Directive Opening for counting of RES-E part proportional to primary renewable energy share in case of co-firing biomass and fossil fuels In addition the Energy Law states that the local energy planning shall take into accord RES utilization.

Budapest, September 28-29, 2004 From May 2004 is in force amendment of Energy Law which reached two targets: Main – full implemented of the EU directive for renewable electricity (2001/77/EC), Additionally - partly corrected distribution system operators obligations according 2003/54/EC directive. EU accession (May 2004)

Budapest, September 28-29, 2004 Main changes in RES-E field Guarantee of Origin system establishment Purchase obligation for every suppliers: turnover companies (like earlier) and producers (included TPA) Transmission priority Periodic reports required by the Directive introduction Introduction of a minimal level of penalties in case of lack of fulfilment of the obligation. Penalties proportional to the quantity of not purchased energy and an average annual price The National Fund of Environmental Protection and Water Management has allocated funds from the fines for RES investments supporting

Budapest, September 28-29, 2004 RES-E producer System operator (DSO/TSO) Control of obligation targets realisation Supplier (turnover company or non-RES electricity producer using TPA) Physical electricity Issuing GO PaymentGO way GO application Obligatory purchase Measurement and data confirmation President of Energy Regulation Authority Priority GO discontinuance Periodic reports

Budapest, September 28-29, 2004 New ordinance proposal The new ordinance – consultation process and notification by European Commission – shall be in force from January 2005, and its draft has included: Separation of ordinances for RES and for CHP More detailed rules for renewable energy counting in case of hybrid power plants and co-firing After 2010 internal RES-E share target is stopped on 7,5 % level – opening possibility for EU common support scheme establishment

Budapest, September 28-29, 2004 New, extemporary actions Governmental proposal of amendment for the Energy Law sent by the Prime Minister to the Parliament in July 2004 (actions only to 2010): 50 % grid access costs of renewable energy power stations covered by system operators Special rules for wind generators electricity balancing

Budapest, September 28-29, 2004 Renewable energy generators development

Budapest, September 28-29, 2004 Thank You GERARD LIPINSKI MINISTRY OF ECONOMY AND LABOUR Department of Energy Security Phone +48/22/ Plac Trzech Krzyzy 3/5, Warsaw POLAND