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28 October 2019
Application procedure for individual cogeneration bonus
The first implementing regulations of the Act of 14 December 2018 on the Promotion of Electricity from High-Efficiency Cogeneration were published on 21 August 2019. The President of the Energy Regulatory Office recently announced an individual cogeneration bonus, applications for which will be open from 8:15am on 18 December 2019 to 4:15pm on 20 December 2019.
To date, four implementing regulations have been published. The Regulation of the Minister of Energy of 21 August 2019 on Reference Values for New and Significantly Modernised Cogeneration Units in 2019 entered into force on 17 September 2019 and expires on 31 December 2019. It sets out the reference values for (depending on the investment costs incurred for the modernisation of comparable new cogeneration units):
The Regulation of the Minister of Energy of 21 August 2019 on the Maximum Amount and Value of Electricity Produced by High-Efficiency Cogeneration Covered by Support and Unit Amounts of Guaranteed Bonuses in 2019 and 2020 entered into force on 17 September 2019 and expires on 31 December 2020. The regulation sets out:
The Regulation of the Minister of Energy of 21 August 2019 on the Maximum Value of Investment and Operating Costs for the Construction and Operation of New Comparable Cogeneration Units came into force on 17 September 2019. It sets out:
The Regulation of the Minister of Energy of 6 September 2019 on Application Methods for the Individual Cogeneration Bonus and the Value of Coefficients to be Taken into Account came into force on 1 October 2019 and specifies, apart from the parameters for individual cogeneration bonus applications, the value of coefficients to be taken into account regarding the location of cogeneration units and the types of fuel used to generate electricity in cogeneration units.
The publication of the Regulation of the Minister of Energy of 6 September 2019 allowed the President of the Energy Regulatory Office to announce its call for applications for the individual cogeneration bonus. The European Commission approved the individual cogeneration bonus on 15 April 2019 (Case SA.51192 (2019/N) – Poland – CHP support).
Pursuant to the Act of 14 December 2018 on the Promotion of Electricity from High-Efficiency Cogeneration, the individual cogeneration bonus is an additional payment for electricity produced by:
This electricity must be generated, introduced to the grid and sold by a producer of electricity from a high-efficiency cogeneration system which had a successful bid under the application procedure. The conditions to take part in the call for applications, the size of the bonus, the period of support and the producer's obligations after winning an intake are specified in the act and its executive regulations.
On 17 September 2019 the President of the Energy Regulatory Office announced a call for applications for the individual cogeneration bonus. Applicants must request permission to take part from the President of the Energy Regulatory Office, who will notify applicants thereof within 30 days of receipt of a completed application. According to the call for applications the maximum amount of electricity permitted from high-efficiency cogeneration (the sale of which may be covered by the individual cogeneration bonus), is 36 million MWh (the maximum value of the cogeneration bonus in such cases will be Zl4,297,230,000), including the maximum amount of electricity from high-efficiency cogeneration units located outside Poland (the sale of which may be covered by the individual cogeneration bonus), which is 1.8 million MWh (the maximum value of the cogeneration bonus in such cases will be Zl214,861,500).
The Act of 14 December 2018 on the Promotion of Electricity from High-Efficiency Cogeneration aims to exploit the potential of cogeneration to improve air quality in Poland and increase the efficiency of heating and cooling systems. The individual cogeneration bonus for units with an installed electrical capacity of not less than 50MW aims to protect auctions conducted for smaller units, as due to the economies of scale achieved, units with a capacity exceeding 50MW could submit bids in auctions significantly below those of units with smaller capacities.
Further, it was found to be impossible to construct a separate competitive process for these types of unit due to the fact that an insufficient number of projects of this scale was expected to be realised. For this reason, the legislature decided to exclude larger units from auctions and create an individual bonus for each installation depending on their capacity and market situation in order to not exceed the needs of each unit.
For further information on this topic please contact Aleksandra Kolenda or Kamil Zawicki at Kubas Kos Gałkowski by telephone (+48 22 206 83 00) or email (email@example.com or firstname.lastname@example.org). The Kubas Kos Gałkowski website can be accessed at www.kkg.pl.
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