Energy buy agreements (PPA) are rising in reputation in Poland because of excessive power costs and the declining attraction of renewable power auctions. Nonetheless, regulatory modifications 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, as a result of aggressive public sale system. Nonetheless, final yr’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 lead PPA transaction at Pexapark. “We’ve 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 primary 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 comply with wholesale market costs. Nonetheless, 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 sturdy demand from firms, however the query is at what costs and for what tenors, as a result of that may outline whether or not it is sufficient to exchange the contract choice for distinction. Going ahead, value effectivity, worth hedging towards rising electrical energy prices, and sustainability efforts are anticipated to proceed to drive PPA demand. Nonetheless, wind additionally has an impact.
“There are a variety of serious regulatory modifications that make circumstances unsure and fewer engaging,” Cocquyt stated. “There will probably be a income restrict till 30 December 2023, with a stage a lot decrease than the €180/MWh proposed by the EU.”
The PLN 355/MWh ($83.50/MWh) income cap for PV installations with a capability of greater than 1 MW was launched in November 2022. It requires all installations that promote electrical energy underneath the PPA above the public sale reference worth, plus PLN 50, which can pay tax on revenue above this quantity. The answer has confronted criticism due to the numerous impression on photo voltaic plant revenues.
“There’s an intervention to stability the market (regulate costs) and an elimination of the change obligation for day-ahead volumes, which makes the day-ahead market much less liquid and the worth isn’t very clear,” stated Cocquyt. “This might have a detrimental impression on long-term urge for food from utility off-takers and buyers.”
Extra new laws are anticipated within the Polish PPA area within the coming months, together with potential permits for the development of direct strains associated to power provide underneath PPAs.
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