Regulation on reference prices to apply at 2020 renewable energy auctions

by Jakub Plebański

6 May 2020 

The regulation on reference prices published yesterday sends a strong reassuring signal to investors amid their concerns about the impact of COVID-19 on holding renewable energy auctions in 2020.

The Climate Minister's regulation on reference prices to apply at 2020 auctions, published on 4 May, opens the way for the President of the Energy Regulatory Office to announce renewable energy auctions to be held this year. The regulation sets the maximum prices which can be offered by investors who plan to launch energy production using various technologies under the auction system. The regulation is a clear sign that the Polish government continues on its path of investing in the development of renewable energy sources despite substantial expenditures it must incur to counteract the consequences of the epidemic crisis. 

Reference prices for leading technologies

According to the regulation, investors submitting their bids for on-shore wind farms at auctions for wind and photovoltaic power plants with an output of over 1 MW will not be allowed to offer more than PLN 250/MWh. The bid price for photovoltaic power plants in the same auctions has been limited to PLN 340/MWh. Reference prices for photovoltaic plants with an output of not more than 1 MW have dropped from the previous-year’s PLN 385/MWh to PLN 360/MWh.  Prices have increased relative to 2019 for energy generated by burning sewage and agricultural biogas. A rising trend is also observed when it comes to prices for energy from hydropower and various waste and biomass incineration plants.

The auction system is the main support system for renewable energy sources in Poland. Its further development not only benefits investors but also shows that Poland is politically involved in the implementation of the European Green Deal strategy.