Green Energy Poland SA

5. Green certificates – mechanism of action, the price, the principles of turnover

The main mechanism to support the production of electricity from renewable sources is the system of so-called green certificates. It has been defined in the Act of April 10, 1997 Energy Law (Journal of Laws of 2006, No. 89, item 625, as amended). This solution is the market mechanism conducive to the development of renewable energy. Its essence is, imposed on energy companies selling electricity to end users, obligation to obtain and present to the President of ERO (Energy Regulation Office) certain amount of certificates of origin for electricity produced from renewable energy sources, or to pay a substitute fee[1].

Green certificates operate in Poland since 2005. Then came into force new regulations, amending the scope of the obligation to purchase energy from renewable sources. They provide producers of electricity from renewable energy sources to demonstrate that under the Directive of the European Parliament and Council of Europe 2009/28/EU of April 23, 2009 on the promotion of energy from renewable sources, changing and in the result repealing Directives 2001/77/EU and 2003/30/EU (UE Office Journal L of 2009, No. 140, pp. 16-62), the electricity they sell is produced from renewable energy sources.

Green certificates are the property rights emerging as a result of conversion of issued by the President of ERO. The certificate of origin is issued by the President of ERO through the power system operator in whose area of activity there is a renewable energy source. The conversion occurs each time after registering them in the registration system and results in generation of green certificates. The moment of generation of green certificates is the same as the moment of issuing certificates of origin to a company generating electricity in the renewable energy source. Green certificates have no material form, the proof is merely an electronic record of the registration in the registration system. They are indefinite instrument, subject to redemption at the request of its holder.

Towarowa Giełda Energii SA (Trade Exchange of Energy JSC) is involved in registration and trading certificates derived from registered certificates. It also conducts market of property rights, where are bought and sold property rights to the certificates of origin for electricity produced from renewable sources or cogeneration. To buy or to sell may only stock exchange members, who are allowed to operate in the market of property rights, and who are also members of register of certificates of origin. These include energy producers, energy companies and trading companies. The share in turnover of certificates also have power brokers allowed for trading them. Property rights are traded in the single price system and the continuous trading system. In the market of property rights limits of price variation do not apply. Stock exchange is also involved in recording outsession transactions, or transactions carried out by the buyers and sellers without the participation of the stock exchange. Krajowy Depozyt Papierów Wartościowych SA (National Depository for Securities JSC) is involved in financial settlement of transactions concluded on the green certificates[2].

The system of certificates of origin (so-called green certificates) has been defined in detail in the Regulation of the Minister of Economy of August 14, 2008 (as amended) on the detailed scope of obligations in obtaining and presenting for redemption the certificates of origin, the substitute fee, purchase of electricity and heat produced from renewable energy sources and the obligation to confirm the data on the amount of electricity generated from renewable energy source. (Journal of Laws of 2008, No. 156, item 969).

Table 2: Prices of ”green certificates”

Year

2006

2007

2008

2009

2010

2011

PLN/MW

240,00

242,20

248,46

258,89

267,95

274,92

In addition to the green certificate system, there are also:

  • red ones – certificates of origin of the electricity derived from so-called cogeneration and combined heat and power production;
  • yellow ones (formerly blue) – certificates of origin from small cogeneretaion sources gas-fired or of power below 1 MW,
  • purple ones – certificates of origin from sources that use gas from demethanation mines;
  • orange ones – from sources equipped with installations to capture and store carbon dioxide (CCS – Carbon Capture and Storage);
  • blue ones – from new, highly efficient sources;
  • white ones – aimed at promoting energy efficiency and reducing consumption of the final energy

Orange, blue and white certificates are not yet operational.

Currently, the Ministry of Economy is preparing a change in support system for ”green energy”. Certificate system will remain, but there will be introduced correction coefficients depending, among others, on the viability of the technology. The new rules are to adjust the amount of support to the profitability of different kinds of sources. The new system will strongly support cost-effective in the current environment technologies, such as photovoltaics, whilethe power producers will receive less energy in the technologies already being used on a large scale. Certificates of origin will not be granted for life at the same rate. Their value will be decreasing during the maintenance of the installation. Renewable sources, however, will receive certain percentages of the certificates of origini for the wholelifetime, because it enables recording of ”green energy”. There will also be implemented the system to distinguish whether the systems already poperated are used or new ones. But owners of existing plants can not count on them to keep the current system. The amount of awarded certificates of origin will also decrease[3].


[1] WWW.mg.gov.pl

[2] A Guide for the Entrepreneur, Environmental Information Center, WWW.ekoportal.gov.pl

[3]http://www.cire.pl/item,54335,1.html?utm_source=newsletter&utm_campaign=newsletter&utm_medium=link

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