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Polish energy sector in 2017

  • Poland
  • Energy and infrastructure

10-02-2017

What legal changes lie ahead?
It appears that 2017 will be a groundbreaking year for the Polish energy sector. With entry into force on 16 December 2016 of the regulation establishing the detailed list of liquid fuels whose production, storage, handling, shipment, distribution or trading, including trading abroad, requires a concession and whose importation requires entry in the register of importers, fuel enterprises were required to apply by 16 January 2017 for amendment of their existing concessions to conform to the new liquid fuels nomenclature. By the same date, enterprises importing liquid fuels indicated in the regulation were also required to obtain the relevant entry in the register of importers. 
Changes affecting the natural gas market also entered into force on 1 January 2017. The amendment to the Energy Law published on 8 December 2016 provides among other things for elimination of tariffing of activity involving sale at natural gas at a virtual location, as well as CNG, LNG or gas sold via tenders, auctions or public procurement procedures. Then, from 1 October 2017, the obligation of approval of tariffs for all other natural gas customers will be eliminated, except for households, for which this obligation is scheduled to be eliminated at the end of 2023. 
Changes in the renewables sector should also be noted. According to plans announced by the Ministry of Energy, a comprehensive regulation governing energy clusters and cooperatives should be created in 2017. There is a glimmer of hope that the definition of a “prosumer” will be extended to cover enterprises generating electricity for their own business operations. The new year also means changes in regulations connected with import of solid fuels to Poland, which according to ministry plans will be regulated by an amendment to the Act on the System of Monitoring and Inspection of Fuel Quality and the relevant executive regulations.
The Capacity Market Act should enter into force in 2017. It should also be mentioned that in 2017 the president of the Energy Regulatory Office should complete all proceedings concerning excessive power consumption which occurred in August 2015. The fines meted out by the regulator may lead to numerous appeals by businesses to the Court of Competition and Consumer Protection. 
What will be the most pressing issues in the immediate future?
It appears that the most immediate issues will be the regulations on electromobility and offshore wind farms, and new rules for support for cogeneration. With respect to electric automobiles, a draft of the Act on Electromobility and Alternative Fuels appeared in the list of the Council of Ministers’ legislative work on 13 December 2016, and should be adopted by the Council of Ministers in the first quarter of 2017. This means that in the near future we may witness the development of electromobility in Poland. Another important issue requiring regulation is the support system for cogeneration. The current system of support for cogeneration systems will remain in force only until 2018. And given the growth of interest in offshore wind farm projects, detailed regulations on this issue may also appear within the next few years. 
What else should you know?
As the elimination of tariffs in natural gas trading comes to pass, trading enterprises are required to adjust their sale contracts with customers and complex contracts to reflect the new circumstances. Under the amendment, if a contract for sale of gaseous fuels or complex contract does not specify the price of gaseous fuels or the manner in which the price is determined after the tariff obligation ends, the trading enterprise will be required to send the customer a draft amendment to the contract with respect to the proposed prices of fuels or the manner for determining them. The draft contractual amendments should be forwarded by trading enterprises no later than 2 months before the date when the prices will be freed, that is by 1 August 2017 for industrial customers and by 1 November 2023 for household customers. Together with the draft contract amendment, the trading enterprise must provide the customer written notice of the right to terminate the contract. In that situation, the customer has a right to terminate the contract without additional costs. To terminate the contract, the customer must submit a written termination notice. This will result in dissolution of the contract as of the last day of the month following the month in which the trading enterprise received the notice of termination, but the customer can also indicate a later date when dissolution of the contract will be effective. 

What legal changes lie ahead?

It appears that 2017 will be a groundbreaking year for the Polish energy sector. With entry into force on 16 December 2016 of the regulation establishing the detailed list of liquid fuels whose production, storage, handling, shipment, distribution or trading, including trading abroad, requires a concession and whose importation requires entry in the register of importers, fuel enterprises were required to apply by 16 January 2017 for amendment of their existing concessions to conform to the new liquid fuels nomenclature. By the same date, enterprises importing liquid fuels indicated in the regulation were also required to obtain the relevant entry in the register of importers. 

Changes affecting the natural gas market also entered into force on 1 January 2017. The amendment to the Energy Law published on 8 December 2016 provides among other things for elimination of tariffing of activity involving sale at natural gas at a virtual location, as well as CNG, LNG or gas sold via tenders, auctions or public procurement procedures. Then, from 1 October 2017, the obligation of approval of tariffs for all other natural gas customers will be eliminated, except for households, for which this obligation is scheduled to be eliminated at the end of 2023. 

Changes in the renewables sector should also be noted. According to plans announced by the Ministry of Energy, a comprehensive regulation governing energy clusters and cooperatives should be created in 2017. There is a glimmer of hope that the definition of a “prosumer” will be extended to cover enterprises generating electricity for their own business operations. The new year also means changes in regulations connected with import of solid fuels to Poland, which according to ministry plans will be regulated by an amendment to the Act on the System of Monitoring and Inspection of Fuel Quality and the relevant executive regulations.

The Capacity Market Act should enter into force in 2017. It should also be mentioned that in 2017 the president of the Energy Regulatory Office should complete all proceedings concerning excessive power consumption which occurred in August 2015. The fines meted out by the regulator may lead to numerous appeals by businesses to the Court of Competition and Consumer Protection. 

What will be the most pressing issues in the immediate future?

It appears that the most immediate issues will be the regulations on electromobility and offshore wind farms, and new rules for support for cogeneration. With respect to electric automobiles, a draft of the Act on Electromobility and Alternative Fuels appeared in the list of the Council of Ministers’ legislative work on 13 December 2016, and should be adopted by the Council of Ministers in the first quarter of 2017. This means that in the near future we may witness the development of electromobility in Poland. Another important issue requiring regulation is the support system for cogeneration. The current system of support for cogeneration systems will remain in force only until 2018. And given the growth of interest in offshore wind farm projects, detailed regulations on this issue may also appear within the next few years. 

What else should you know?

As the elimination of tariffs in natural gas trading comes to pass, trading enterprises are required to adjust their sale contracts with customers and complex contracts to reflect the new circumstances. Under the amendment, if a contract for sale of gaseous fuels or complex contract does not specify the price of gaseous fuels or the manner in which the price is determined after the tariff obligation ends, the trading enterprise will be required to send the customer a draft amendment to the contract with respect to the proposed prices of fuels or the manner for determining them. The draft contractual amendments should be forwarded by trading enterprises no later than 2 months before the date when the prices will be freed, that is by 1 August 2017 for industrial customers and by 1 November 2023 for household customers. Together with the draft contract amendment, the trading enterprise must provide the customer written notice of the right to terminate the contract. In that situation, the customer has a right to terminate the contract without additional costs. To terminate the contract, the customer must submit a written termination notice. This will result in dissolution of the contract as of the last day of the month following the month in which the trading enterprise received the notice of termination, but the customer can also indicate a later date when dissolution of the contract will be effective. 

 

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