Wolf Theiss, a leading law firm across CEE, has been providing legal services in Poland since the early 1990s. In December 2019 they expanded their footprint in Warsaw by launching a brad new energy practice.
Poland’s energy sector is undergoing immense transformation and regulatory aspects are a central concern for all industry members. What are in you view the priorities for 2020 from a legal perspective?
Renewable energy is very much the focus and generally the wish is for things to move faster: whether we are talking about relaxation of the 10H rule or enacting the offshore bill.
I think we should also work on storage legislation - there are many ways to store energy rather than feed it into the grid when it is not needed, and instead make use of it at peak hours. Specifically the state should look at ways to make it easy to connect to the grid and support it through different types of subsidies.
The draft offshore bill was submitted for public consultation in the beginning of this year. How do you think it responds to the needs that were expressed by the industry?
The promise of a subsidy is something that the offshore industry has been looking forward to. I trust they will also be very fond of the 25 years tenor.
The latter has, however, caused some discontent within the onshore industry because their tenor is limited to only 15 years. There are some grounds to their reaction because if the support period was prolonged their production would become cheaper and more profitable. This is something I would emphasize. It is indeed more difficult and capital intensive to construct offshore, but there are good reasons to prolong the onshore subsidy period as well.
Looking at things that could be improved in the draft, what would your suggestions be?
The process of permitting is still very complicated, any form of simplification I am sure would be welcome by the industry. A second suggestion is to make subsidies available to all projects that are on the fast track. The draft envisions two separate phases whereas I trust a single one would serve everybody’s interest better - we need every single MW so there is not much need for a competitive auction here.
The distance rule has caused massive hurdles for the onshore wind sector and there is a general hope to see it changed - but in what way?
There are some misconceptions about the distance rule in the sense that it was not the first limitation of this kind. Even before this rule was enacted there were restrictions stemming from the environmental law, just that it was up to local municipalities to decide whether they would allow construction of a wind farm within a certain distance based on sound emissions, flickering etc.
What the distance rule did was to introduce a fixed distance and ignore what existed before.
One option is to go back to this initial set up. Another is to agree on a smaller distance, for instance 500 m which was sort of a market practice and respected in most cases. Another way of thinking would be to leave the distance rule in place but give municipalities a power to waive this right.
I can understand there are certain municipalities they would like to see less wind farms but the questions remains: where is the border between my right to have an unrestricted sight and the right of a country to have access to clean energy? If we have these two colliding rights there needs to be a reasonable solution. I lean towards the first option because it would entail the least operational issues.
Do you think Poland has a healthy procedure in place for such ideas to be explored and negotiated?
Truth of the matter is that in 2015 the new government pushed a very crude change of policy. Every government in every state has the right to implement its own policies, of course, but this has been done in a way that was rather a shock for the industry. The attitude has surely changed since.
Overall it has been rather a struggle between the industry and government and I don’t think the dialogue is enabled yet in a way that everybody can speak freely and be heard.
On the upside PSEW is doing a good job expressing the needs of the industry and the proximity rule is pretty much the final of the vital steps to be dealt with.
RES will be crucial for the Poland going forward, no doubt, but whether it can fill the entire gap left by coal is yet uncertain. Do you think nuclear energy is a viable alternative? What are the pros and cons we should account for in this debate?
Everybody sees the one big pro which is lack of CO2 emissions. As for cons, they range from safety to the issue of spent fuel. There are of course structural and design issues to be taken into account, namely how to finance the effort and under what model such a plant could best function in Poland.
I see it as a good alternative personally and believe that we should continue to research ways to bring it to completion, whilst focusing on renewables to lower our emissions as soon as possible.
Poland’s energy strategy is expected to provide an answer but it has now been delayed for several months. Do you have any indication about when it will be released?
It is difficult to predict, soft laws like this national strategy are often subject to political tensions - the fact that we are in the midst of an electoral cycle also does not help. We do know what the design is because we saw the draft last fall, but there is no clear indication yet as to when the final version will be released. It should be noted though that this strategy is in no way binding, rather it just sets out certain goals.
You launched the energy practice in Poland in a time of substantial yet exciting changes. What goals will be pursued under your leadership?
The ambition is to make the best energy practice in Warsaw. I will not fill you in on the plan just yet but you will hear more from us in November, as we are planning an event with the participation of our colleagues from other Wolf Theiss offices. The focus will be green energy, very much a priority going forward including when it comes to reducing our own carbon footprint.
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