On April 8, 2014, after two years Poland working on new renewable law, the government approved a draft law that would provide long-term subsidies for renewable energy projects. The draft law requires final approval by the parliament and the president before it can be passed.
The government’s hope with the new act is to reduce dependency on fossil fuel, cut costs to consumers, reach EU green energy targets and raise the cost of subsidy system to 7.5-11.5 billion zlotys (1.8 – 2,7 billion EUR) a year by 2020.
Based on these exemplary initiatives, the energy produced by new renewables will be awarded by an auction system, instead of through registration for feed-in tariffs and green certificates. The country’s energy regulator URE would buy electricity at guaranteed prices for 15 years, after holding a set of auctions for projects of between 40kW and 1MW in size, and another set of auctions for projects of between 1MW and 50MW capacity. A quarter of approved projects will be in the smaller range. The polish government will set auction prices and capacity limits for each auction.
Another target is to allow the producers already in operation to join the auctions.
The previous subsidy system did not provide enough sustainability for investors in Poland and the legal environment prevented new investments. Poland must increase renewable energy with 15% by 2020 to meet the EU targets.