As part of the draft law currently before the Polish parliament (i.e. the Sejm) amending the Energy Law and the Law on Renewable Energy Sources, the Ministry of Climate and the Environment has proposed as an amendment to the draft currently before the Sejm to amend the Law on Emergency Measures to Curb Electricity Prices and Support Certain Consumers in 2023 (the Electricity Prices Act), modifying the method of calculating the write-off for the Fund in terms of revenues from the sale of guarantees of origin and settlements from financial instruments, including virtual cPPAs. (See this link, for the previous Law-Now article on this draft: CMS | Law-Now | Poland proposes new regulations on electricity direct lines, offering opportunities for investors).
Under the proposed regulations, the write-off to the Fund to be paid by electricity generators referred to in Article 21 of the Electricity Prices Act will be the sum of the product of the volume of electricity sold and the positive difference of the volume-weighted average market price of electricity sold and the volume-weighted average price limit of electricity sold, and the sum of revenues from the sale of guarantees of origin, revenues from agreements related to the sale of electricity that include financial instruments, and other revenues resulting from additional monetary settlements that depend on the value or volume of electricity sold.
Regardless of whether the volume-weighted average market price of electricity sold on a given day is higher or lower than the volume-weighted average price limit of electricity sold on a given day, the generators will be obliged to pay 97% of the revenues from the sale of guarantees of origin, financial instruments and additional monetary settlements depending on the value or quantity of electricity sold to the Fund.
The proposed amendment does not modify the definition of the market price, according to which the market price of sold electricity also includes settlements relating to guarantees of origin, financial instruments and other additional settlements related to the sale of electricity.
As a result, revenues from the sale of guarantees of origin, financial instruments and additional settlements that depend on the value or volume of electricity sold may be in some cases calculated twice, first as part of the calculation of the difference between the volume-weighted average market price of electricity sold (which already includes guarantees of origin and financial instruments) and the volume-weighted average limit price of electricity sold and then, again, as the sum of revenues from the sale of guarantees of origin, financial instruments or additional settlements.
The draft was referred to the Committee on Energy, Climate and State Assets for first reading. The proposed effective date for these changes is the first day of the month following the promulgation of the draft.
For more information on this draft and Poland's energy sector, contact your CMS client partner or local CMS experts.
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