Q: What is the “anti-crisis shield”?
A: As SARS-CoV-2 (coronavirus) started to become more of a global issue, legislative work was commenced in Poland to develop appropriate solutions to combat the pandemic. The Act of 2 March 2020 on specific solutions for preventing and combating COVID-19, other infectious diseases and the crisis situations caused by them (Journal of Laws 2020, item 374) (“COVID Act”) came into effect on 8 March 2020. However, due to the rapid spread of the coronavirus and its devastating impact on the economy, it quickly became evident that adopting further mechanisms to mitigate the losses suffered by entrepreneurs were called for. On 26 March 2020, an extensive bill amending the COVID Act and a significant number of other acts, (widely referred to as the “anti-crisis shield”), was published. After a rapid legislative process, the anti-crisis shield was passed as a law and officially announced on 31 March 2020 (Journal of Laws 2020, item 568). The newly adopted act introduces a great number of solutions constituting an aid package for entrepreneurs. Certain solutions were also introduced with regard to the protection of the energy sector in Poland, including the implementation of RES projects.
Q: In what way does the anti-crisis shield affect the development of RES projects?
A: The anti-crisis shield provides for the following legal instruments:
- The possibility to extend, by virtue of a decision of President of the Energy Regulatory Office (“President of ERO”), the time limit for the first sale of electric energy, resulting from the RES auctions,
- The possibility to extend, by virtue of a decision of President of ERO, the maximum age of RES generation units that may be used in new installations,
- The suspension of deadlines in administrative proceedings, including proceedings before President of ERO.
Q: How is the time limit for the first sale of electric energy prolonged?
A: Under Article 79 section 3 subsection 8 of the Act of 20 February 2015 on renewable energy sources (Journal of Laws 2015, item 478, as amended) (“RES Act”), the first sale of energy under the auction support scheme must occur within 42 months following the auction session closing date (24 months for PV installations and 33 months for onshore wind installations). Under the anti-crisis shield, these time limits may be prolonged by President of ERO, by up to 12 months, subject to an application duly submitted by the producer who won the RES auction. Therefore, the prolongation does not occur automatically. The prolongation of the time limit occurs by way of an order of President of ERO, issued in regular administrative proceedings. A complaint against the order may be brought to the Regional Court in Warsaw – Court of Competition and Consumer Protection, within 7 days of receipt of the order.
Q: When is it possible to apply for a prolongation?
A: The application for prolongation must be justified by a delay in the implementation of the RES project which was caused by the COVID-19 pandemic. According to the Article 83 section 3ba, introduced into RES Act by the anti-crisis shield, the following cases of delay are listed:
- Delay in the supply of devices which constitute the RES installation (i.e. generation units), or
- Delay in the supply of elements necessary for the construction of the RES installation (i.e. other components of infrastructure), or
- Delay in the implementation of the RES installation and the infrastructure for its connection to the grid, or
- Delay in the acceptance or start-up of the RES installation, or
- Delay in the acquisition of licences to produce electric energy or entries into registers required by law.
Q: What are the requirements of an application?
A: According to the Article 79a section 2 of RES Act, introduced by the anti-crisis shield, the following information has to be included in the application:
- Name, surname and address of residence, or company name and address of the registered seat of the producer
- the requested period of prolongation (not longer than 12 months)
- name and ID of the installation (as used in the RES auction)
- updated bank guarantee within the meaning of Article 78 section 4 of RES Act, if it was established for the installation participating in the RES auction (instead of a bid bond), provided that it was prolonged at least for the period specified in the application,
- updated material and financial schedule of implementation of the project, within the meaning of Article 70b section 4 subsection 1(e) of RES Act. Please note that this provision does not refer to the auction support system. Reference should be made to Article 75 section 5 subsection 6 instead.
- of the supplier (suppliers) of devices constituting the RES installation, or
- of the producer,
confirming that the delay in supply of such devices or start-up of the installation was caused by the circumstances listed in Article 83 section 3ba (see above).
The application has to be made no later than 30 days before the expiry of the time limit to produce energy under the RES auction. Please note that the impact of COVID-19 pandemic on the implementation of the RES project need not be duly proven, as only a statement in that regard is required.
Q: What about the prolongation of the maximum age of generation units?
A: According to the anti-crisis shield, the maximum age of generation units which may be used in a new RES installation, within the meaning of Article 74 section 1 of RES Act (42 months, or 33 months for onshore wind turbines, or 24 months for PV units) may be prolonged in the same manner as the term for the first sale of electric energy under a RES auction, through the same application. Pursuant to the anti-crisis shield it is not required to specify the actual age of the planned generation units in the application, which may be an oversight of the legislator.
Q: I have won the RES auction in 2018. Am I also entitled to prolongation?
A: Yes. Article 79 of the anti-crisis shield expressly provides that the changes to RES Act apply to all producers who have won RES Auctions prior to the entry into force of the anti-crisis shield (1 April 2020). Therefore, winners of RES auctions held in 2019, 2018 and 2017 are affected by the introduced changes (though the act does not expressly exclude its application to winners of auctions held in 2016, by principle the relevant time limits resulting from this auction have already expired).
Q: How does the suspension of deadlines in administrative proceedings work?
A: According to Article 15zzs of the anti-crisis shield, during the state of epidemic (introduced in Poland on 23 March) or the state of epidemic emergency (introduced on 14 March), the course of procedural deadlines in administrative proceedings does not start, and any such course already underway is suspended for the duration of the state of epidemic or epidemic emergency. Therefore, all deadlines will be suspended with the effect as of 14 March 2020.
The suspension also applies to proceedings before the President of ERO. For example, producers who have submitted their applications for a licence to produce electric energy, if the proceedings are still underway, may use the extra time to gather any project documentation that may currently be missing.
Once the state of epidemic or epidemic emergency is officially cancelled, the course of all deadlines in administrative proceedings will be automatically resumed.
Q: When will the new law enter into force?
A: The anti-crisis shield, in the scope relevant for the development of RES projects and discussed above, enters into force on the day after its announcement, which occurred on 31 March 2020. Therefore, the act is already in force in the above mentioned scope.
The current text of the anti-crisis shield is available under the following link.
Should you have any doubts or further questions, we remain at your disposal. For more information, please contact attorney Dominik Sołtysiak (firstname.lastname@example.org).