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The Warsaw Voice » Business » April 8, 2009
Business coping with the crisis
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Renewable Energy in Poland: Conditions for Power Grid Connection
April 8, 2009   
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Wind power is currently experiencing a surge of interest in Poland. Analyses of wind conditions indicate that two-thirds of the country is suitable for wind farm construction. Under European Commission directives, renewable energy should constitute 15 percent of Poland's overall energy balance by 2015. To meet these requirements, Poland must amend its laws, creating a friendlier regulatory framework that will foster the development of this industry.

One of the major difficulties that green energy producers have to grapple with is "power blocking"-a process whereby investors who are not necessarily interested in wind farm development obtain permission for connection to the power grid. The permit is valid for two years, which means that the entity that obtained it may, upon complying with the conditions specified therein, require that they be connected to the grid, which as a consequence entails a reduction in the grid capacity available for others. As such projects are currently extremely popular, by "booking" a place for grid connection, companies make a profit reselling the land with the conditions for grid connection.

The Ministry of Economy is currently working on amendments to the Energy Law. Under the draft prepared by the ministry, investors applying for the connection will need to make an advance payment of PLN 30 for every kilowatt of the connection power. There is reason to believe that speculation in "green energy" will be curbed and thus the development of wind energy will accelerate. However, some experts believe that determining the amount of the advance payment will only be possible after several months from the date of submitting the application and that smaller investors will not be able to afford the advance payment, which might subsequently be lost due to failure to comply with the connection requirements.

In Spain, where wind energy accounts for 9 percent of the country's overall energy balance, obtaining conditions for grid connection is regulated by autonomous regional institutions that determine the requirements for the connection to the power grid. If the capacity of future wind farms exceeds certain limits, the decisions need to be made by central authorities.

Similar solutions have been successfully implemented in other European countries. In countries where mandatory advance payments are required, the amounts are much lower than those proposed in Poland. So while amending Poland's energy law it is worth considering the experience of neighboring countries that have used wind energy for years.

Agata Jurek-Zbrojska, legal advisor, manager of the real estate department at Garrigues' Warsaw Office
Jakub Gorzelnik, lawyer at Garrigues' Warsaw Office
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