Property Rights in Poland

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Act on Renewable Energy Resources (RES)

• New law about renewable sources of energy was signed by the

president on the 11th of March and will come into force as of

May 2015

• The green certificates system, which is a market mechanism,

will be replaced by an auction feed-in tariff

• The property rights market holds several certificates such as

the green certificate and is commonly referred to as the

“colours market”

• Property rights support the production of electricity from

renewable energy and cogeneration

- Green certificate: certificate of origin for electricity generated with renewable energy sources.

Regarding electricity coming from the RES, Poland had to adjust its relevant regulations to the

regulations stipulated in Directive No 77/2001/EC. The directive determines the share of

electricity coming from RES in total electricity consumption in the member countries as well as

it imposes the obligation to implement the system of so-called “certificates of origin” that is

aimed at supporting the development of the renewable energy sector.

- Red certificate: similar to the green certificate, used in the so-called “cogeneration” directive”

as of 2004 (Directive No 2004/8/EC) that promotes production of electricity in cogeneration

with thermal energy.

- Yellow certificate: certificate or origin for electricity generated from high-efficient CHP

(combined heat and power) units fired with gaseous fuels or when the total installed power is

lower than 1 MW.

- Violet certificate: certificates of origin for electricity generated from high-efficient CHP units

fired with methane or with gas obtained during processing of biomass.

- White certificate: introduced to stimulate companies to achieve a certain target of energy

efficiency.

Different certificates

Share of property rights in my energy price

Distribution price (Capacity fix price, Long term contract

cancellation fee, Distribution fee, Quality fee, Monthly fee )

Wholesale price

Excise tax

Property rights

Profile, balancing, all risks, margin, other

The calculation is based on the following formula:

share(%) x certificate price (PLN/MWh)

- Share(%) – set by the Goverment:

EXAMPLE: impact of green energy on your electriciy price based on replacement fee:

12% x 297,35 = 35,7 PLN/MWh

*Replacement fee: used when there was not enough liquidity on the POLP or if it was not possible to buy the certificate on the market

Required minimum share/part of PR 2010 2011 2012 2013 2014 2015 2016

PMOZE_A (green certificate) % 10,40% 10,40% 10,40% 12,00% 13,00% 14,00% 15,00%

PMGM (yellow certificate) % 3,10% 3,30% 3,50% 3,70% 3,90% 4,90% 6,00%

PMEC (red certificate) % 21,30% 22,20% 23,20% 23,20% 23,20% 23,20% 23,20%

PMMET (violet certificate) % 0,60% 0,60% 0,60% 0,90% 1,10% 1,30% 1,50%

PMWhite (white certificate) % 1,00% 1,50% 1,50%

Orange Certificate (planned) %

- Certificate price (PLN/MWh):

The calculation of the supplier depends on the following factors:

a) Amount of own generation

b) Amount of electricity from the market (POLPX)

c) Replacement fee*

Replacement fee: 2010 2011 2012 2013 2014 2015

PMOZE_A (green certificate) PLN/MWh 267,95 274,92 286,74 297,35 300,03 300,03 300,03

PMGM (yellow certificate) PLN/MWh 128,80 127,15 128,80 149,30 110,00

PMEC (red certificate) PLN/MWh 23,32 29,58 29,30 29,84 11,00

PMMET (violet certificate) PLN/MWh - 59,16 60,00 60,00 63,26

PMWhite (white certificate) PLN/MWh

Orange Certificate (planned) PLN/MWh

How to calculate the price of each colour?

Name of Certificate

(„color”)2010 2011 2012 2013 2014 2015

PMOZE_A (green

certificate)YES YES YES YES YES YES

PMGM (yellow certificate) YES YES YES NOYES

from 29/04YES

PMEC (red certificate) YES YES YES NOYES

from 29/04YES

PMMET (violet certificate) YES YES YES YES YES YES

PMWhite (white certificate) NO NO NO YES YES YES

Orange Certificate (planned) NO NO NO NO NO NO

Evolution of the obligation for buying “colors”

1. Fix the price for the next year(s)

2. Formula based on POLPX – Futures (buy now for delivery in the future)

3. Formula based on POLPX – „Spot” (buy now for delivery now)

4. Formula based on the replacement fee* (e.g. % of replacement fee)

5. Cap price

6. Mix of all of the above

*Replacement fee: used when there was not enough liquidity on the POLP or if it was not possible to buy

the certificate on the market

Options available on the market

On 11 March 2015 the President signed the Act on Renewable Energy Sources

(the ”RES Act”).

1. As of 1/1/2016, there will be a new auction scheme for green energy next to

the green certificates. The price is guaranteed for 15 years

- RES installations commissioned after 1/1/2016 will no longer follow the

green certificate system, which will be replaced by a new auction scheme*.

- The green certificate support scheme remains in force in relation to the

existing RES installations (with certain exceptions) commissioned before 1

January 2016 and should last until 2035 (as a general rule).

2. RES fee of 2,51 PLN/MWh part of electricity distribution tariffs as of 1/1/2016

*Feed in tariff system. The producer can participate in the auction and the one offering the cheapest price wins and receives a guaranteed fixed

price for the electricity produced the next 15 years.

Green certificates or fixed price

More information?

Bartosz Palusiński

Operations Director Central Europe

m: +48 509 82 00 25