ATM.LEGAL ALERT: New law on the promotion of offshore wind farms

On January 15, 2020, the Legislative Center under the Polish government presented a first draft of a law on the promotion of offshore wind farms.

The new offshore law is intended to ensure that Poland fulfills the EU requirements regarding the share of renewable energy sources in energy consumption (at least 15% by the end of 2020 and 21% by 2030), that the construction of new offshore wind farms is actively promoted and that the current legal regulations will be adapted to the industry-specific requirements.

The new draft contains in particular the following regulations:

Financial support for offshore wind turbines

The financial support is to be based on the support model previously known from the Polish EEG and by covering the negative balance, which is the difference between the market price for electrical energy and the price specified in a decision by the chairman of the Polish market regulator URE (for the years 2020 – 2022 ) or between the market price and the price offered and fixed in a public auction.

A first auction is planned for 2023, with a maximum funding period of 25 years.

Optimization of administrative requirements and procedures

The draft law provides for the existing administrative requirements to be relaxed or procedures to be accelerated, this applies in particular to environmental permits, water permits, building permits and usage permits. All of these permits should be issued within 90 days and immediately enforceable.

Use of the local supply chain

The explanatory memorandum to the draft law states that more than 100 Polish companies currently have expertise in the construction of offshore wind farms. The draft therefore stipulates that when applying for funding, it is mandatory to state how the local supply chain will be used.

However, it should be emphasized that the participation of foreign companies in the construction of offshore wind farms in Poland will continue to be possible without their operators losing the right to funding.

Introduction of a tax on offshore wind turbines

In Poland, offshore wind farms are not currently taxed with property tax. For this reason, the draft envisages that operators of offshore wind farms will be taxed separately in the future, with PLN 23,000 in tax per installed megawatt.

The draft law is currently in an open consultation process. It can be assumed that the draft will be changed or supplemented at least in part in the course of further legislative work. The Polish Ministry of State Assets plans to put the draft into effect later this year.