Energy buy agreements (PPA) are rising in recognition in Poland attributable to excessive power costs and the declining enchantment of renewable power auctions. Nevertheless, regulatory adjustments have created uncertainty and lowered attractiveness.
The Polish PV market has grown within the final two years, however not so many company and utility photo voltaic/wind PPAs, because of the aggressive public sale system. Nevertheless, final 12 months’s excessive power costs modified the equation.
“When market costs are rising, extra PPAs are signed, with the bulk being company PPAs (10 out of 13 introduced in 2022),” stated Ann Cocquyt, regional PPA transaction lead at Pexapark. “Now we have even seen some initiatives that intentionally exit the CfD scheme to go for a cPPA, an instance of which is the V-Ridium PPA with T-Cellular Polska.”
Progress in current renewables auctions has been disappointing.
“Competitors and low bid costs in comparison with elevated capex are the principle causes for oversubscription auctions,” stated Cocquyt. pv journal. “The photo voltaic PPA exercise was undoubtedly chosen because the [contract-for-difference] strike costs fail to observe wholesale market costs. Nevertheless, market costs have recovered since then, and there stays restricted danger urge for food for the long-term danger profile of the utility sector. “
He stated that there’s a robust demand from companies, however the query is at what costs and for what tenors, as a result of that can outline whether or not it is sufficient to substitute the contract possibility for in distinction. Going ahead, price effectivity, worth hedging towards rising electrical energy prices, and sustainability efforts are anticipated to proceed to drive PPA demand. Nevertheless, wind additionally has an impact.
“There are a selection of serious regulatory adjustments that make circumstances unsure and fewer enticing,” Cocquyt stated. “There shall be a income restrict till 30 December 2023, with a degree a lot decrease than the €180/MWh proposed by the EU.”
PLN 355/MWh ($83.50/MWh) income for PV installations with a capability of greater than 1 MW was launched in November 2022. It requires all installations promoting electrical energy underneath PPAs above the public sale worth of reference, plus PLN 50, who can pay revenue tax above this quantity. The answer has confronted criticism due to the numerous affect on photo voltaic plant revenues.
“There’s an intervention to stability the market (regulate costs) and an elimination of the alternate obligation for day-ahead volumes, which makes the day-ahead market much less liquid and the value isn’t very clear,” stated Cocquyt. “This might have a damaging affect on long-term urge for food from utility off-takers and buyers.”
Extra new rules are anticipated within the Polish PPA area within the coming months, together with potential permits for the development of direct traces associated to power provide underneath PPAs.
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