RENEWABLE ENERGY MARKET

the case of

POLAND

Danish Embassy, Warsaw 24th Sept 2010 Michal Cwil, PIGEO

selected issues

Agenda

General information Targets and present statistics for RES Potential Rules and legal basis Barriers Energy prices and the certificates

photo: from wikipedia

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Short information about PIGEO

self-governmental organization

group of RES entrepreneurs

representative body of entrepreneurs in the RES market

important partner for Polish Government in consulting legal acts and strategic papers

for RES sector

3

National and international cooperation

PRK OZE

Commercial Sections

of Embassies in Poland

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Our main activities

legislation

consulting

education

promotion

5

Energy sectors

Heat sector

Electricity sector

Transport sector (sea, land, air),

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Renewable sources

wind (for electricity) hydro (for electricity) biomass (for electricity, heat or

fuels) biowaste (for electricity, heat or

fuels) biogas (for electricity, heat or

fuels) solar colectors (for heat) solar PV (for electricity) geothermal (for electricity or

heat) heat pumps (for heat)

all RES-electricity can supply vehicules

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Kind of energy

primary energysource

(e.g. biomass, wind)

equipment to convert

final energy (fuel, electricity, heat)

photo: from wikipedia

e.g.:PV panelwind turbineCHP engine

The most important parameter of the equipment is:efficiency measured in %

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Net value of energy use vs the gross

GROSS final energy consumption

=

self consumption

+transmission losses

+

NET final energy consumption

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General units in Energy sector

• Power, installed capacityW, kW, MW, GW, TW

1000 W = 1kW1000 MW = 1GW

• Energy = power x time = W x hour

Wh, kWh, MWh, GWh, TWh

1000 Wh = 1kWh1000 MWh = 1GWh

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Energy units convenient for different sectors

MWh (electricity), MJ (heat), ktoe (transport)

1 kWh = 1*1000*W*60*60*s = 3 600 000 Ws = 3 600 000 J= 3.6 MJ

1 MWh = 3 600 000 000 J= 3.6 GJ

1 GWh = 3 600 GJ

1 ktoe = 11.63 GWh

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tonne of oil equivalent (toe); 1 ktoe = 1000 toe

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EU targets related to energy sector

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RES target for Poland vs other EU countries

31%

13%

16%

13%

30%

18%

25%

16%

18%

20%

23%

17%

13%

42%

23%

11%

13%

10%

14%

34%

15%

25%

14%

38%

49%

15%

24%

EU-27: 20%

RES share in 2020

BEBGCZDKDEEEIEELESFRITCYLVLTLUHUMTNLATPLPTROSISKFISEUK

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National target for renewable energy

Poland's policy is adjusted to the EU strategy, which is based on the continuously growing share of energy generated from renewable energy sources (RES). The 2009/28/EC Directive provides that by 2020 the Member States jointly need to reach a 20% share of RES-generated energy in gross final energy consumption, and 10% of biofuels in transport fuels.

In Poland, pursuant to the Directive, these levels have to be no less than 15% for RES and 10% for biofuels.

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What does the target mean?

15%

the share of RES production on total gross final consumption in 2020

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What we have now?Primary energy share in Poland

Data based on the Ministry of Economy. For 2010, the data might be quite the same

lignite12%

coal48%

oil23%

gas12%

RES5%

Total use in 2007: ca. 100 000 ktoe

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What we have now?gross final energy consumption in 2007

Based on Eurostat

 Sector Gross final energy demand

Total RES deployment

RES share, by sectors

  ktoe % ktoe  %

Electricity sector 13 191.1 20.5 466.8 3.5

Heat sector 36 424.9 56.5 4 096.5 11.2

Transport sector 14 803.0 23.0 97.0 0.6

Total 64 419.0 100.0 4 660.3 7.2

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What we have now in RES?share of RES on gross final consumption

Data obtained basing on Eurostat statistics of December 2009

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What we have now in RES?Electricity sector

Breakdown by RES-electricity category (a) installed capacities

(cumulative),(b) electricity

production.

No cofiring technologyis included in Figure

(a).

Data on the basis of Eurostat statistics from

December 2009.

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What we have now in RES?Installed capacity of on-grid units – electricity sector (MW)

2005 2006 2007 2008 2009 2010*

biogas 32 36.8 45.7 54.6 70.9 76.2

biomass 190 238.8 255.4 232 252.5 252.5

wind 83.3 152.6 288 451.1 724.7 952.5

hydro 852.5 934 935 940.6 945.2 945.8

PV - - - - 0.001 0.012

co-firing biomass & coal - - - - 38 units 39 units

Total 1157.6 1362.1 1523.8 1 678.3 1 993.2 2 227.1

*) data valid for 16th of April 2010, URE

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What we have now in RES?Electricity, green certificates issued in 2009 (MWh)

data based on URE

Green certificates issued for electricity generated in 2009: 8 297 GWh

47%

co-firingbiogasbiomasswindhydro

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What we have now in RES?Heat production (ktoe)

data based on Eurostat

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What we have now in RES?Biofuels production (ktoe)

*) data based on Eurostat

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What we have now in RES?input of particular sectors, 2007

Share of RES on gross final energy consumption in 2007. The input of particular sectors (RES-E, RES-H and RES-T) in RES energy production.

Book on RES, Claeys & Casteels Publishing, Data obtained basing on Eurostat statistics of December 2009.

ca. 88%

ca. 2%ca. 10%

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Scenario for RES from policy

based on Polish Energy Policy up to 2030

Tab. Gross final RES energy demand according to the Polish Energy Policy 2030 (ktoe) and the share of RES in gross final energy demand (%).

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NREAP – draft of the Action Plan 2nd governmental scenario

Targets and trajectory for RES in Poland forecast by the government in 2020

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How do we prospect the RES development ?

visit www.repap2020.eu to get more about our proposals

RE

S fi

nal e

nerg

y de

man

d (k

toe)

scenario18.7% RES share

Legal basis

Energy Law of 10th April 1997 with further amendments (Energy Law). the Executory Regulation – Ordinance of the Minister of Economy of

14th August 2008 (amended by the Ordinance of the Minister of Economy, Journal of Laws from 2010, No. of 34 pos. 182)

the Executory Regulation – Ordinance of the Minister of Economy of 4th May 2007 on detailed conditions of operation of the electric power system

Law on Biocomponents and Liquid Biofuels of 25th August 2006.

Others:The Law on Environmental Protection of 27th April 2001,The Law on Environmental Protection of 27th April 2004, The Law on Agricultural and Forest Land Protection of 3rd February 1995, The Law on Waste of 27th April 2001, The Geodesic and Cartography Law of 17th May 1989, The Law on Real Estate Management of 21st August 1997, The Code of Administrative Proceedings of 14th June 1960, The Code of Civil Proceedings of 17th November 1964, The Law on Fire Security of 24th August 1991, The Public Procurement Law of 29th January 2004, The Ordinance of the Minister of Infrastructure of 12th April 2002 on the technical requirements to be fulfilled

by buildings and their location (Journal of Laws No. 75, item 690).

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How to realize the RES project?

Plot acquisition Environmental decision Localization decision Access to the grid Construction permit Concession / registration

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Localize the RES

Local spatial development plan (so called MPZP)

decision on conditions of construction and land development (so called WZ)

public utility project

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Access to the gridapply for conditions

document confirming the legal right to real property,

the spatial development plan or the situational plan,

a study of impact on the electrical system (if applicable),

advance payment against the grid connection fee 30PLN/kW,

submitting the extract and map extract from the local zoning plan or a decision about the conditions for development (acquisition of conditions for construction) of the real property on which the RES unit is to be constructed.

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Concession / registry

Concession from the Energy Regulatory Office

for all RES electricity generating units

excluding agricultural biogas

Registration by the Agricultural Market Agency

for agricultural biogas production or production of electricity from agricultural biogas.

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Some definitions

renewable energy – it is electricity or heat generated especially:

• in hydro power plants and wind power plants,• from sources generating energy from biomass

and biogas,• from photovoltaic cells and solar collectors,• from geothermal sources,

 and

part of energy retrieved from thermal processing of communal

waste (a relevant regulation will be adopted soon).

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Some definitions

biomasss – all biodegradable substances of plant and animal origin (...).

agricultural biomass – a biomass originating from energy crops, waste and remains from agricultural production and industries processing from agricultural products, as well as residues of other waste which are subject to decomposition.

biogas – gas derived from biomass. All kind of biogases are renewable energy source (RES);

agricultural biogas – gas fuel obtained from agriculture raw materials, agriculture by-products, liquid or solid animal excrements, by products or residues obtained from agriculture and food industry or forest biomass in the anaerobic fermentation process.

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Some definitions

gaseous fuels – various gases not being RES, which are supplied by the gas network, and agricultural biogas

cogeneration – combined heat and power (CHP)

cogeneration unit – a separate set of devices that can generate

electricity in a cogeneration

useful heat (ECHPth) – heat produced in a cogeneration process

to satisfy an economically justifiable demand for heat or

cooling

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electricity from cogeneration – electricity generated in a process linked to the production of useful heat: ECHP

el = total electricity production with an annual overall efficiency at a level of at least 75 %

ECHPel = C * ECHP

th when the level of 75% is not reached

high-efficiency cogeneration - primary energy savings (PES) obtained by combined production instead of separate production of heat and electricity of:

PES ≥ 10% for cogeneration unit with Pel ≥ 1 MW PES > 0% for cogeneration unit with Pel < 1 MWC – is related with power to heat ratio

Some definitions

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Types of certificates in the Polish support mechanism

RES CHP

all kind of biogas (electricity physically generated)

agricultural biogas pumped into gas network (equivalent)

non gaseous sources

agricultural biogas (no limit for Pel) and all kind of biogas and fuels (Pel < 1 MW) and all gaseous fuels

all kind of biogas (no limit for Pel); also methan from coal

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Types of certificates

RES CHP38

Link the certificates

RES CHP39

Link the certificates

RES CHP

or:

or:

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Link the certificates

RES CHP

or

producer

producer

recipient

recipient

*

*

*) 1 m3 biomethan 1 MWhel equivalent

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Types of certificateswhat is eligible

For total electricity generated from biogas including: self-consumption electricity generated in a separate production

(Eel)

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Types of certificates what is eligible

Each MWh of electricity equivalent* which results from the amount of biomethane pumped to pipeline (the same rules as green one).

*) Relevant regulation will define the algorithm for converting biomethane (m3) into equivalent amount of electricity (MWh).

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Types of certificateswhat is eligible

For each MWh of electricity from cogeneration ECHPel

ECHPel = Eel

(only if an annual overall efficiency reaches the minimum level)

or or

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Types of certificatesmeet conditions to get

license – concession by URE (or ARR registry if agricultural biogas)

generating unit should be connected to the grid

electricity is generated in high-efficiency cogeneration (this is applied only to yellow, red or violet ones)

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The procedure to receive the certificates

The certificates of origin are issued by the President of the Energy Regulatory Office, on the request of a producer of energy in RES, submitted via the grid operator of whose area of activity the RES unit is connected.

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Types of certificateswho is obliged to buy

The obligation is imposed on entities which sell electricity to end customers.

The obligation is fulfilled when an entity buy each year a specific number of certificates or alternatively pay a substitute fee. The number of the certificates of origin reflects the share of electricity supplied and sold by this energy company to end-users in a given year. According to the Ordinance of the Minister of Economy of 14th August 2008 par. 3,

This share amounts to (green one):10.4% for 201010.4% for 201110.4% for 201210.9% for 201311.4% for 201411.9% for 201512.4% for 201612.9% for 2017.

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Foresee the incomeRES unit generating electricity, not in CHP

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More about the market

more about the mechanisms and the market:

participate at the Green Power Congress, www.kongresgreenpower.pl

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Polska Izba Gospodarcza Energii Odnawialnej

ul. Gotarda 9, 02-683 WarszawaTel. +48 22 548 49 99, Fax +48 22 548 49 00

pigeo@pigeo.pl www.pigeo.org.pl

Michał Ćwil, michal.cwil@pgbiogaz.pl

Dziękuję za uwagę ! / Thank you for attention !

Dołącz do nas !

Join us !

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