Poland Photovoltaic Market Outlook 2013 - 2018

POLAND PHOTOVOLTAIC MARKET

Outlook 2013 ÷ 2018

Inea Consulting is well established renewable energy advisory firm focused to emerging markets of Eastern Europe, CIS countries and MENA countries. Through its analytical arm Inea Research, the company provides independent renewable sectors watch, customized analysis, market outlooks and sector studies. What makes us different is the quality and accuracy of information, which is interpreted in the best way to take your investment decisions.

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POLAND PHOTOVOLTAIC MARKET: OUTLOOK 2013 ÷ 2018

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This market report offers an incisive and reliable overview of the photovoltaic sector of the

country for the next 5 years period 2013 ÷ 2018. Poland is very interesting market due to its

political and economic stability, high prices for electricity and heavy dependence on coal

and lignite in power generation, which should be changed to comply with EU renewable

policy. In view of recent cuts in FIT’s announced in Germany, Spain, France, UK, Czech

Republic, Slovakia, Bulgaria and Italy, Poland represents a stable investment environment

in Central-East Europe with clear rules and fair FIT rates. Current cumulative installed PV

capacity in the country is insignificant, but a number of fully permitted and ready to build

project will promptly increase in 2013. Polish market has good chances to reach more than

300 MWp in the next 2 years. The report provides a complete picture of the market

situation, dynamics, current issues and future prospects. You will find more than 60 pages

of valuable information in this unique in-depth analysis of the Polish photovoltaic market.

With comprehensive market data this report brings clear and concise insights, to help

investors in their decision making process. As 2012 was challenging year for photovoltaic

industry, the time for taking right decisions during 2013 and the next years is limited. Fast

changing market environment with falling module prices, requires relevant and accurate

information. For your convenience we offer opportunity for orders with customized report

content. Reasons to buy this market report include:

Brief overview of the Polish political and economic environment

Solar resource potential in Poland

Overview of Polish photovoltaic market development 2000 ÷ 2018

Grid connected photovoltaic installations for 2012/2013

Future market trends and planned photovoltaic projects for 2013 ÷ 2018

Current market prices of fully permitted and operational photovoltaic projects

Polish legal and energy regulatory framework for renewable projects

Key companies and competitive landscape in photovoltaic sector

Review of most relevant financing and supporting incentives

SWOT Analysis

At next pages you will see the full table of content of this report. To order the report just fill in and send us the enclosed at the last page order form. If you have any other questions please do not hesitate to call us on ++359 887 342 475 or write an e-mail to [email protected]

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4 TABLE OF CONTENTS | INEA CONSULTING LTD.

TABLE OF CONTENTS

TABLE OF CONTENTS ......................................................................................................... 3

FOREWORD ...................................................................................................................... 7

1 Methodology and limitations .................................................................................. 9

Methodology ............................................................................................................... 9 1.1 Limitations ................................................................................................................. 10 1.2

2 EXECUTIVE SUMMARY ........................................................................................... 11

3 POLISH POLITICAL AND ECONOMIC ENVIRONMENT ............................................... 14

Basic country data ..................................................................................................... 14 3.1 Government structure, political climate and ruling party......................................... 17 3.2 GDP and Economic Growth ....................................................................................... 19 3.3 Electricity Imports And Exports. Electricity Prices For Business And Huoseholds .... 22 3.4 Taxes .......................................................................................................................... 24 3.5

3.5.1 VAT ......................................................................................................................... 24 3.5.2 Income and Corporate Taxes ................................................................................. 24

4 POLAND PHOTOVOLTAIC ENERGY MARKET ............................................................ 25

General electricity market information ..................................................................... 25 4.14.1.1 Electricity consumption and production ............................................................... 26 4.1.2 RES targets ............................................................................................................. 27 Why invest in photovoltaic energy in Poland? .......................................................... 29 4.2 Polish solar resource potential .................................................................................. 30 4.3 Overview of Poland photovoltaic market .................................................................. 32 4.4 Market prices for photovoltaic projects in Poland .................................................... 35 4.5 Key development photovoltaic projects in Poland ................................................... 35 4.6

5 EUROPEAN RENEWABLE ENERGY POLICY LANDSCAPE ............................................ 38

RES REGULATIONS AND EU DIRECTIVES .................................................................... 38 5.15.1.1 Precedent EU regulations ...................................................................................... 38 5.1.2 Most recent EU renewable energy policy developments...................................... 39

6 POLAND RES LEGAL AND REGULATORY FRAMEWORK ............................................ 40

Main laws and regulations ......................................................................................... 40 6.1 Applicability of the promotion system ...................................................................... 41 6.2 Trading green certificates .......................................................................................... 41 6.3 Fulfilling annual mandatory quota of green certificates ........................................... 42 6.4 Zoning, planning and construction related authorizations ....................................... 43 6.5 Environmental related authorizations....................................................................... 43 6.6

6.6.1 Natura 2000 Network ............................................................................................ 43 6.6.2 Clean Development Mechanism (CDM) and Joint Implementation (JI) ................ 44 Energy law authorizations ......................................................................................... 45 6.7

6.7.1 Power Generation Licensing .................................................................................. 45


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6.7.2 Grid Interconnection .............................................................................................. 45 6.7.3 Power Off-Take ....................................................................................................... 46 6.7.4 Green certificates (certificates of origin) and purchase price of electricity ........... 47 Key Co-Financing Opportunities ................................................................................. 50 6.8

6.8.1 Poland Sustainable Energy Financing Facility (PolSEFF) ......................................... 50 6.8.2 National Fund for Environmental Protection and Water Management (NFEP&WM) ....................................................................................................................... 54

7 KEY ORGANIZATIONS AND INSTITUTIONS ..............................................................56

Government ............................................................................................................... 56 7.17.1.1 The Ministry of Economy (MoE) ............................................................................. 56 7.1.2 Poland’s Energy Regulatory Office (ERO) ............................................................... 56 7.1.3 Ministry of Environment (MoENV) ......................................................................... 57 7.1.4 Ministry of Finance (MoF) ...................................................................................... 57 7.1.5 Polish Power Exchange (POLPX) ............................................................................. 57 7.1.6 Polish Transmission System Operator (TSO) .......................................................... 57 7.1.7 Polish National Conservation Agency (KAPE) ......................................................... 59 ELECTRICITY GENERATION AND ELECTRICITY DISTRIBUTION COMPANIES ............... 60 7.2

7.2.1 PGE - Polska Grupa Energetyczna S.A. .................................................................... 61 7.2.2 Tauron Polska Energia S.A. ..................................................................................... 64 7.2.3 ENEA S.A. ................................................................................................................ 65 7.2.4 RWE ......................................................................................................................... 67 7.2.5 ENERGA S.A. ............................................................................................................ 67 Key photovoltaic companies operating on POLISH market ....................................... 68 7.3

8 SWOT ANALYSIS ....................................................................................................70

9 CONCLUSIONS .......................................................................................................73

10 LIST OF ABBREVIATIONS ........................................................................................75

11 REFERENCES ..........................................................................................................77

12 DISCLAIMER ...........................................................................................................79

APPENDIX I. SOLAR MAPS OF EUROPE AND POLAND ........................................................80

LIST OF MAPS, CHARTS AND TABLES


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Map 1: Where is Poland on the European map ....................................................................... 14 MAP 2: Polish Road Map .......................................................................................................... 15 MAP 3: Poland regions administrative map ............................................................................. 18 Map 4: Solar irradiation and solar electricity potential for optimally inclined photovoltaic modules in Poland, JRC PVGIS 2008 ......................................................................................... 31 MAP 5: Natura 2000 areas in Poland ....................................................................................... 44 MAP 6: Plan of high voltage grids (> 110 KW) in Poland (2010) .............................................. 58 Map 7: Solar irradiation and solar electricity potential for horizontally mounted photovoltaic modules in Poland, JRC PVGIS 2008 ................................................................... 80 Map 8: Solar irradiation and solar electricity potential for horizontally mounted photovoltaic modules in Poland, GeoModel Solar s.r.o. 2011 ................................................ 81 Map 9: Solar irradiation and solar electricity potential for optimally inclined photovoltaic modules in Europe, JRC PVGIS 2008 ........................................................................................ 82

Chart 1: Real GDP growth for the period 2000-2018 (including estimates) ............................ 20 Chart 2: Poland’s GDP growth compared to EU-27 for the period 2002-2018 ....................... 21 Chart 3: Electricity imports and exports for the period 2000-2018 (in GWh) ......................... 23 Chart 4: Structure of Polish electricity market ......................................................................... 26 Chart 5: Share of renewables in gross final consumption of electricity 2012 ......................... 26 Chart 6: Poland RES targets for 2020 in % according to NREAP .............................................. 28 Chart 7: Cumulative developments of photovoltaic power plants in Poland in MWp from 2000 to 2018, including estimates ........................................................................................... 36 Chart 8: PolSEFF structure ........................................................................................................ 51 Chart 9: Market Shares by Sales of the Distribution System Operators in Poland in 2012 ..... 60 Chart 10: Organization structure of PGE .................................................................................. 62

Table 1: Electricity prices for business and households ........................................................... 23 Table 2: Support schemes for RES generation in the EU countries ......................................... 29 Table 3: Correction factor in GC's for PV systems in Poland in new draft RES law ................. 34 Table 4: Market prices for photovoltaic projects in Poland for 2012 ...................................... 35 Table 5: Proposed green certificates for electricity from renewable sources in Poland in new draft RES law .................................................................................................................... 49 Table 6: Proposed feed-in tariffs (FIT) for electricity from renewable sources in Poland in new draft RES law ..................................................................................................................... 50

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