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Poland Moving to Feed-in Tariffs

Poland, a country that produces 90% of its electricity with coal and once a seemingly impregnable bastion of neoliberalism in the heart of Europe, has announced that it will introduce a new law on renewable energy. The new law will introduce feed-in tariffs for the first time.

The new law, the Renewable Energy Sources Act in English, will likely not take effect until early 2013.

The announcement was made by Poland's deputy minister, Mieczyslaw Kasprzak, at a press conference 27 July 2012.

Other former East Bloc countries have introduced feed-in tariffs for renewable energy with varying degrees of success and consistency, most famously the Czech Republic.

Poland, however, through its long association with émigré communities in the U.S., and its early rebellion against Soviet rule, became the poster child of neoliberal "reforms" following the fall of Communism. Thus, any move by the generally conservative Polish government to move away from its troubled system of Tradable Green Certificates and toward feed-in tariffs is potentially groundbreaking.

Perhaps it's not unrelated that the other conservative bookend of the European Union, Great Britain, had previously made a decision to scrap its Quota system (Renewable Portfolio Standard in US terminology) and introduce a form of feed-in tariffs dubbed Contracts for Difference. Britain had previously introduced a wildly successful feed-in tariff for microgeneration that resulted in the installation of more than 1,000 MW of solar photovoltaics.

Few details of the draft bill circulating within the Polish government are available in English. From news reports and partial machine translation, here's what little is known.

  • Program expansion will be limited by a budget.
  • Microgenerators will receive expedited interconnection.
  • Reviews every three years.
  • Wind, solar, geothermal, hydro, biogas, biomass, wave, and tidal power will be included.
  • New renewable target of 15.5% by 2020
  • Contract term: 15 years with the exception of co-firing.
  • Exemption of excise tax on generation.

Currently there is only 2,000 MW of wind capacity installed in the country, generating 2.8 TWh per year or less than 2% of supply.

Most "renewable" generation in the country is through the questionable practice of "co-firing" coal-fired power plants with biomass. Co-firing allows utilities to trade in and profit from "green certificates" under the Polish renewable obligation system. Demand for biomass by utilities — some foreign owned — has become so great that it has exhausted domestic resources and led to rising imports. The proposed Renewable Energy Sources Act will be introduced in part to redress this imbalance.

The proposed act will limit the terms of co-firing to only five years.

European and Polish environmentalists had long criticized Polish reliance on "co-firing" as a means of meeting its renewable obligations. However, it was the foreign exchange costs of importing biomass to meet Poland's demand for "green certificates" that moved the government to action.

Poland is not part of the Euro currency zone, though it is a member of the European Union and consequently has a legal obligation to meet its renewables target.

Lead image: Old Windmill in Poland via Shutterstock
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