Marek Dolatowski, Karolina Przygoda

Amendments to the Energy Law concerning electricity

An overview of issues of particular importance to electricity businesses under a recently adopted proposal to amend the Energy Law

On 21 June 2013, the Sejm (the lower house of the Polish Parliament) passed the Act Amending the Energy Law and Certain Other Acts. The act fully implements the Renewables Directive (2009/28/EC) in Poland and amends the implementation of the Electricity Directive (2009/72/EC) and the Gas Directive (2009/73/EC). When they become law, the amendments will have a significant impact on the functioning of electricity businesses and may influence decisions of prospective investors considering entering the Polish energy market.

The act will now be submitted to the Senate, and should it decide to introduce any amendments, the act will be referred back to the Sejm. The act is expected to come into force in autumn this year.

Unbundling

More precise provisions regarding the functioning of transmission grid operators have been proposed to fully separate production and trade in electricity from transmission of electricity.

Under the act, it would be prohibited:

  • to serve simultaneously as a management board or supervisory board member of a transmission grid operator and of another business that produces or trades in electricity
  • for board members to exert “significant influence” or other rights in relation to another business producing or trading in electricity or to appoint board members of such businesses.

The President of the Energy Regulatory Office will issue “certificates of independence” which will be a precondition for applying to be a transmission grid operator or a combined system operator.

Grid operators will have six months to achieve compliance with the act after it enters into force.

Rules regulating the activity of distribution grid operators have generally not been amended, save for editorial changes.

The act shifts supervision of transmission grid operators from the Minister of Treasury to the Minister of the Economy.

Renewable energy sources

The act provides for guarantees of origin of energy, which for the final user will be confirmation that the energy from the grid originates from renewable sources.

Guarantees of origin are separate from certificates of origin and unlike the latter do not give commercial rights.

Grid connection of a micro-installation (a renewable energy installation with a total installed electricity capacity of 40 kW or less connected to an electricity grid of rated voltage below 110 kV, or with a total installed heat capacity of 120 kW or less) would be free of charge.

The act defines industrial power consumers as final energy users whose main business is in one of the areas listed in the act, e.g. extraction of coal or production of chemicals, metals, paper or food. It is proposed that those which in the preceding calendar year used more than 100 GWh of electricity, the cost of which exceeds 3% of the production value, would be entitled to benefit from the renewables support scheme regardless of whether they are a member of the Polish Power Exchange. Those users would be required to acquire certificates of origin and present a certain number of them to the President of the Energy Regulatory Office for redemption, or pay a substitute fee.

Other amendments

The act seeks to ensure the independence of the President of the Energy Regulatory Office through direct appointment by the Prime Minister and requiring specific grounds for dismissal. The President of the Energy Regulatory Office would be appointed for a term of five years and would be eligible for reappointment only once.

Other provisions include:

  • Rules for international cooperation in joint development projects and renewables
  • Procedures for certification of micro-installations and small installations for renewables (with a total installed electricity capacity greater than 40 kW but no greater than 200 kW connected to an electricity grid of rated voltage below 110 kV, or with a total installed heat capacity greater than 120 kW but no greater than 600 kW)
  • Protection for household electricity consumers, requiring specific information in contracts on the consumer’s rights, complaint procedures and dispute resolution
  • Specification of end users’ right to terminate contracts with an energy supplier
  • Introduction of the category of “sensitive consumers” of gas and electricity, enjoying special protection and entitled to gas and electricity subsidies.

Marek Dolatowski and Karolina Przygoda, Energy Law Practice, Wardyński & Partners