A draft amendment to the Energy Law (the “Grid Act”), which proposes changes aimed at unlocking connection capacities among other measures, was recently submitted to the Council of Ministers for review. Despite controversies related to the retroactive effect of many regulations and increased financial burden of securing access to the grid, the Grid Act promises to deliver reforms that may facilitate further development of renewable energy sources in Poland.
The Grid Act introduces two new grid connection agreement types: flexible and configurable.
A flexible grid connection agreement will enable installations to connect at locations where a new connection would otherwise require grid expansion in line with the operator’s grid development plan. Such agreements will impose limits on production or consumption volumes and specify the necessary scope of grid expansion works. The production and consumption limits will remain in place until the grid is expanded, but for no longer than three years from the date the connected installation is completed and a final occupancy permit is obtained.
If grid connection without limits on production or consumption of electricity is not possible despite the planned expansion of the grid, a configurable grid connection agreement can be concluded. This agreement will also limit the production and consumption of electricity, except that such limits may vary over time or be triggered by defined events or operational parameters of the grid. In contrast to a flexible grid connection agreement, limitations imposed under a configurable grid connection agreement may apply for an indefinite period.
Currently, only renewable energy sources can be connected to the grid using the cable-pooling formula. The Grid Act expands the use of cable pooling to other installations, including energy storage systems.
Increase of the advance payment for the grid connection
The Grid Act increases the advance payment for the grid connection fee from PLN 30 (approx. EUR 7) to PLN 60 (approx. EUR 14) for each kW of connection capacity. The maximum advance payment will also be increased - from PLN 3,000,000 (approx. EUR 700,000) to PLN 6,000,000 (approx. EUR 1,400,000).
If, before the entry into force of the Grid Act, an investor received grid connection conditions with validity period expiring no earlier than 6 months from the entry into force of the Grid Act, but has not executed a grid connection agreement, such an investor will have to supplement the advance payment to match the amounts specified above. Failure to fulfil this obligation will result in the expiration of the grid connection conditions. Similar rules will apply to applications for grid connection conditions submitted before the entry into force of the Grid Act, which have not been processed yet.
New fee for processing the Grid connection conditions application
The Grid Act introduces a new, non-refundable fee for processing the application for grid connection conditions. The fee will amount to PLN 1 (approx. EUR 0.24) for each kW of connection capacity, up to PLN 100,000 (approx. EUR 24,000).
If, before the entry into force of the Grid Act, an investor applied for grid connection conditions, and the application has not been processed, such an investor will have to pay the application processing fee within 60 days from the entry into force of the Grid Act. Failure to fulfil this obligation will result in the application being disregarded.
Mandatory performance security
The Grid Act establishes an obligation for investors applying for grid connection conditions to provide a performance security for the grid connection agreement, in the amount of PLN 30 (approx. EUR 7) for each kW of the connection capacity below 100 MW and PLN 60 (approx. EUR 14) for each kW of the connection capacity exceeding 100 MW, but no more than PLN 12,000,000 (approx. EUR 2,800,600). The security should be provided not later than 30 days before the execution of the grid connection conditions, under pain of expiration of the grid connection agreement. The security may take form of a deposit, bank guarantee, insurance guarantee or a surety.
The obligation to provide the security will apply retroactively to projects that do not yet have a grid connection agreement. The retroactive application will depend on a number on factors, such as the validity period of the grid connection conditions and the deadline for grid connection specified in the grid connection agreement. Failure to provide the security will result in the application for grid connection conditions being disregarded, the expiration of the grid connection conditions, or expiration of the grid connection agreement by virtue of law.
Currently, grid connection conditions are valid for two years from their delivery to the investor. Under the Grid Act grid connection conditions will be valid only for one year, subject to certain exceptions for railway powering systems, offshore wind and nuclear power plants.
The Grid Act introduces an obligation to notify the relevant grid operators about obtaining final construction permits for the investment within specific deadlines. The scope of the investment for which the notification will be required and the deadline of the notification will depend on the installation type and the used devices. The obligation will apply retroactively to already executed grid connection agreements.
Failure to fulfil the obligation within the deadline will result in expiry of the grid connection agreement by virtue of law.
Following review by the Council of Ministers, the Grid Act will be passed on to the Parliament. If and when it is adopted by the Parliament, it will be submitted to the President, who has 21 days to sign it. The President may also veto the bill (the veto can be overridden by the lower chamber, in which case the bill becomes law) or refer it to the Constitutional Tribunal to verify its conformity with the Polish Constitution.
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