Wind farm project development in Poland –

experience report from a market participant

Conference „Marktpotential der Offshore-

Windenergie in Polen für deutsche Unternehmen”

Table of Contents

1. CRE – who we are 2. Wind farm project

development in practice – Legal rights (wind farm +

infrastructure) – Wind potential studies – Zoning procedures – Environmental procedures – Grid connection

procedures – Building permit procedures – PPA/CPA topics – Other procedures – Current problems

3. Procedure outlook for offshore wind farms in Poland – Procedures – Where are we? – Problems – Supply chain

CIBET Reenergy – Who we are?

– who we are

• Who is CRE

» Mother company established in 1989- active mainly on district heating technology market

» Cibet REenergy established in 2005 to manage renewable energy projects on booming market

• Experience of CRE

» BIOMASS

• Several (number) biomass fired heating plants (biggest 6 MWth)

» WIND

• 30 MW Kamionka wind farm

• Wind farm- development

• Construction supervision

• Technical maintenance

• Ca. 160 MW project pipeline in different development stages

• Due diligence of existing and developing projects

» PV

• Several projects 2-4 MW in development

Wind farm project development in practice

Acquiring of legal rights

• Subject of legal rights

– Foundation

– Rotor area

– Infrastructure (roads, cables, connection lines)

– Noise impact area?

• Types of legal rights

– Land lease- 29 years due to legal regulations (typical for foundation, roads and internal cables, rotor area)

– Easement (typical connection lines, possibly rotor area)

Acquiring of legal rights

• Discussions with land owners

– Individual approach vs commune approach

• Depending on ownership structure and plot sizes

– Lease fees types (fix vs variable)

• Fixed yearly fee

• Shared risk- fee depending on green/black energy production and energy market prices

– Typical fees

• 5-10 k€ per turbine installed

Wind potential studies

• Timing: when to do – Cost wise optimal moment- after zoning plan – In practice: should be started right after main risk analysis

(feasibility study; discussion with commune, environmental authority and grid operator)

• Importance of wind measurement – in the past mainly for the banks; – now much more important for feasibility studies (due to

potentially lower tariffs)

• Permit procedures – easy procedure for 120 days; – full procedure for unlimited time – mix in practice

Zoning procedures

• Zoning study (Flaechennutzungsplan) - ZS

• Zoning plan (Bebauungsplan) – ZP

• Alternative: building conditions – BC (Bebauungsbedingungen) or Public Aim Investment Site Conditions – PAISC (Vorhaben des Oeffentlichen Zwecks); not possible if any ZP exists on given area – BC/PAISC shorter periods but slightly higher legal

risk of repeal

Zoning procedures

• What is common for which part of infrastructure

– ZS+ZP- wind farm

– BC/PAISC - substation

– LoPAIC- cable line

• Time frame

– ZS: 9-15 months

– ZP: 9-15 months (in some cases can overlap with ZS)

– BC: ca. 2 months (subject to Environmental Decision already issued); however legally not so „strong” as ZS+ZP

Zoning procedures

• Who does what?

– Procedures carried out by Local Government of commune

– Initiative:

• in case of ZS – Government (can also be inspired by Investor)

• in case of ZP - Investor

• in case of BC - Investor

• Who carries the costs and in which form?

– ZS has to be fully financed by the commune

– ZP should be financed by the commune; often developer covers these costs on basis of three-party agreement (government-developer-planning office)

– Various forms of sponsoring for local community are observed as well

• The role of the developer

– Close contact and cooperation with planning office

– Coordination of all tasks

– Close contact with commune increases the efficiency of procuring

Zoning procedures

• Cooperation Investor commune

– Information meetings

– Visits to existing projects

• Cooperation Investor permitting authorities (especially RDOS) due to external evaluation of zoning documents by different authorities

• Public consultations

• Typical combination of ZS & ZP

– Overlapping of the procedures

– Some common documents for both documents

Environmental procedures

• Environmental decision

– Necessary ZP prior to environmental procedure

– Typical timeframe 15 months + (including bird&bats monitoring)

– Lack of precise legal frames for environmental studies esp. Noise (general standards exist but authorities often intepret the standards by themselves), shadow flickering etc.

– Individual approach to each project by local RDOS!

• Bird&bats monitoring

– Commonly min. 1 year pre-construction monitoring

– Commonly 3 year post-construction monitoring

Environmental procedures

• Environmental Impact Assessment

– Complex study describing each element of local environment and assessing investment impact on these elements

– Based on environmental monitoring, calculations and literature

• The role of the developer

– Advisable strong influence on the planning office

– Advisable communication and strong discussion with RDOS due to lack of precise legal frames for studies

– Optimal approach: medium size planning office (not individual scientists) with coordination by the developer

Grid connection procedures

• Procedure and time frame – Max 150 days (specified by Energy Law)

• Pre-conditions for applying – Legal rights to the ground

– Zoning Plan

– Advance payment for connection costs (30 kPLN/MW ca. 7 kEUR/MW)

• Communication with the grid operator – Important contact with operator prior to connection

application due to various connection option

Grid connection procedures

• Negotiations of the grid connection contract

– Connection schedule

• Current problems and outlook for the future

– Big number of „dead” connection contracts blocking new projects

– No new conditions issued since November 2012 due to grid balancing problem

• Do not forget to sign the contract before building permit

Building permit procedures

• Technical design – timing – After grid connection is issued

• Geological survey

• Design documentation for the BP application

• What should be done in advance even if not obligatory for BP application – Extensive foundation planning

– Access roads

– Legal rights for cable routing (is often shifted by developers for near but in practice undefined future)

Building permit procedures

• Grid connection planning – Cable/land line choice

– Connection route

• Telecom line planning – Can be important since not all grid lines are equipped

with fiber optics

• Cooperation and communication with the grid operator – Necessary works to be done by the operator

– Switching off the grid while connecting necessary

PPA/CPA

• 2 yrs ago most typical concept: long term PPA/CPA

• Now: uncertain market of green certificates

• Excessively prolonged Renewable Energy Act and Energy Law Act legislative process

• Change of support system versions- certificates, auctions

• Auction mechanism could provide stability, however no details are known yet.

Other procedures

• Optimization of land usage – Soil classes; new regulations

• Better location on low soil class areas (class IV or lower) • Location on higher soil class areas (class III) above 0,5 ha requires

permission of the Ministry

– Permanent land usage transformation vs access roads to agro areas cost aspect

• Reactive power capabilities – real solutions – Investment approach vs energy usage optimizing incl.

Penalty fees

• Renewable energy generation license – Normally a formal aspect, but – Cannot be forgotten

Current problems

• Legislative problems

– Renewable Energy Act and Energy Law Act in preparation since 2 years- changing conceptions from green certificates to auctions

– Presidential initiative - Landscape Act in preparation

– MP’s proposition of moratorium for all wind farm projects

Procedure outlook for offshore wind farms in Poland

Off-shore in Poland- procedures

• Zoning - Location Decision for artificial islands refection issued by Ministry of infrastructure; valid for 30 years

• Environmental Decision- Issued by local RDOS itself instead of local government

• Grid connection conditions- issued only by transmission grid operator (PSE) instead of distribution grid operators

• Building permit- issued by voivodeship governor instead of district governor

Off-shore in Poland- where are we

• 20 Location Decisions issued

• 2 grid connection conditions issued: – Baltica 3- 1045,5 MW (PGE)

– Baltyk Srodkowy 3- 1200 MW (Kulczyk Investments)

– First connections 2019 earliest

• No Environmental Decisions issued so far- projects on environmental impact assessment stage

Off-shore in Poland- problems

• Natura 2000 areas along major part of Polish coast

• Grid connection- no new connection conditions issued for wind energy since November 2012

• No framework for PPA preparation?

Off-shore in Poland- supply chain

• Production of turbines’ masts

• Production of turbine blades

• Jack-up barges from polish shipyards

• Production of grid connection cables

Thank You for Your attention

Vielen Dank fuer Ihre Aufmerksamkeit

Fragen? Gerne!

Marcin Kaniewski m.kaniewski@cibetreenergy.pl Office phone: +48 22 57 39 733

CIBET Reenergy Sp. z o.o. Al. Krakowska 197; 02-180 Warszawa POLAND Phone: +48 22 57 39 733; info@cibetreenergy.pl