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Incentives

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Having ratified international acts of law, Poland has taken an obligation to promote and considerably increase the share of renewable energy sources, including wind power generation, in her domestic energy production.

The system of state incentives, as well as regulations supporting the development of renewable energy production, results in efficient and dynamic expansion of renewable energy production. Legislation guaranteeing the market for energy from renewable sources, for instance the quotas system and Green Certificates, combined with subsidies and state incentives in research and development belong to most frequently used instruments.

Thanks to the Community Law the European Union has created a framework for the development of green energy in the Member States where renewable sources provide energy and certificates of origin. The system of incentives supports the development of renewable technologies and offer measurable market benefits.

Key incentive models for the renewable energy production sector:

  • Quota System
    • is a requirement to produce or purchase a percentage of energy offered from renewable sources. The Seller of electric energy is required by law to acquire energy generated from renewable sources and available in the grid within the area of their operation. In this system the Producer is guaranteed market energy prices for the product

  • Green Certificates – transferable certificates of origin
    • Apart from selling electric energy at market prices the Producer of renewable energy in Poland acquires some income by generating and selling Green Certificates. The system works on the basis of distinguishing between the value of energy produced from a renewable source and the value of additional benefits. Guaranteed sales of energy produced from renewable sources as well as guaranteed sales of generated Green Certificates efficiently stimulate new investments in RES.

  • Tax allowances
    • Under Polish Excise Law Act renewable energy sources are exempted from excise tax. In the Netherlands, Finland and Great Britain there is a system of basic tax allowances where electric energy produced from renewable sources is partially exempted from tax on fossil fuels.

  • Financial support for investments and credits:

    • Narodowy Fundusz Ochrony Środowiska i Gospodarki Wodnej (The National Fund for Environmental Protection and Water Management) has an annual budget of nearly PLN 400 million. The Fund gives priority to large scale projects recommended by governors of provinces (wojewoda). Here key instruments of support are soft loans whose interest rates fall between 0.3 % and 0.8 % of the refinancing rate. The actual rate depends on the estimated ecological benefits following the implementation of the project

      16 provincial funds for environmental protection and water management.
       These funds credit up to 50 % of investment costs through soft loans

      Bank Ochrony Środowiska offers soft loans for ecological investments and a separate credit line for renewable energy production

      Bank Gospodarki Żywnościowej supports the use of renewable energy sources in agriculture

      The World Bank supports investments in renewable energy sources within its Global Coal Fund

  • Subsidies:
    • Subsidies from financial institutions support mainly activities of NGO’s.

      Narodowy Fundusz Ochrony Środowiska i Gospodarki Wodnej (The National Fund for Environmental Protection and Water Management) may subsidize pilot investment projects on the domestic and supraregional use of renewable energy sources.

      The provincial funds for environmental protection and water management offer subsidies to social organizations and local governments. Their priorities are reflected in the regional strategies of environmental protection.

      The county and municipal funds for environmental protection and water management offer subsidies for different ecological activities including those concentrating on renewable energy sources.

      Fundacja EkoFundusz manages capital coming from the ecoconversion of the Polish foreign debt and subsidizes projects on the use of renewable energy sources up to 50 % of investment costs. Under bilateral agreements such countries as: the United States, France, Italy, Switzerland, Austria and Sweden have abated a part of the Polish foreign debt on condition that the equivalent amount of capital is earmarked for ecological activities, i.e. the protection of biodiversity, prevention of climate change and the reduction of transborder pollution.

      EkoFundusz offers payments up to PLN 700,000 for each MW of installed power. The annual limit for this purpose amounts to PLN 35 million. It is required that the locations for wind farms do not interfere with nature, landscape and bird routes. EkoFundusz pays great attention to the above mentioned aspects and requires meticulous and reliable documentation. In its decisions it takes into account its own expert opinions.

      The UNDP Global Environment Facility considers projects on renewable energy sources its priority. Subsidies up to USD 50,000 are available for local governments and NGO’s.

      Fundacja Partnerstwo dla Środowiska (The Partnership for Environment Foundation) subsidizes educational activities and investments in renewable energy production.