Green Energy Law in Poland: Navigating Renewable Energy Regulations and Incentives

Poland’s renewable energy landscape is undergoing a remarkable transformation. As the country steadily distances itself from its coal-dependent past, a comprehensive legal framework is emerging to support green energy development. For international investors and energy companies eyeing the Polish market, understanding this evolving regulatory environment is not merely advantageous—it’s essential for successful market entry and operation.

The Polish renewable energy sector presents significant opportunities, bolstered by EU climate goals and domestic policy shifts. With the Renewable Energy Sources Act and the Energy Law serving as foundational pillars, Poland has established a multi-faceted system of incentives for renewable investments, ranging from auction systems to tax benefits. However, navigating this complex regulatory landscape requires specialized legal expertise to maximize opportunities while minimizing compliance risks.

This article provides a comprehensive analysis of Poland’s green energy regulations, outlining key legal frameworks, available incentives, and practical considerations for international stakeholders looking to participate in Poland’s renewable energy transition. Understanding these elements is crucial for developing sustainable business strategies aligned with Poland’s environmental objectives and energy security goals.

What is the Current State of Renewable Energy in Poland?

Poland’s energy mix is experiencing a significant shift. Historically dominated by coal, which accounted for approximately 70% of electricity generation, the country is now steadily increasing its renewable energy capacity. As of 2023, renewables constitute about 17% of Poland’s energy mix, with particularly strong growth in solar PV and wind energy sectors.

The Polish government has committed to reducing coal dependency in accordance with EU climate objectives. The National Energy and Climate Plan (NECP) outlines targets for increasing the share of renewables to 23% by 2030, with ambitious projections for offshore wind development in the Baltic Sea. This transition is driven not only by environmental considerations but also by economic factors, as renewable energy becomes increasingly cost-competitive.

International investors have taken notice of these developments, with foreign direct investment in Polish renewable projects reaching record levels. Companies from Denmark, Germany, and Spain have been particularly active in the wind sector, while diverse international players are engaging in solar development across the country.

What Legal Framework Governs Renewable Energy in Poland?

The renewable energy legal framework in Poland rests on several key pieces of legislation. The cornerstone is the Renewable Energy Sources Act (RES Act), last significantly amended in 2022, which establishes the fundamental rules for renewable energy development, support mechanisms, and market participation. This act works in conjunction with the Energy Law, which governs the broader energy sector.

The Polish legal system also incorporates EU directives on renewable energy, particularly Directive (EU) 2018/2001 (RED II), which has been transposed into national legislation. This alignment with EU regulations ensures Poland’s renewable energy policies are consistent with broader European climate objectives and energy market integration.

Additionally, specific regulations address different renewable technologies. For instance, the Act on Investments in Wind Power Plants (the “Distance Act”) regulates onshore wind farm development, while offshore wind energy is governed by the Act on the Promotion of Electricity Generation in Offshore Wind Farms. Hydropower, biogas, and biomass facilities are subject to specific provisions within the RES Act and related environmental legislation.

How Does the Polish Auction System for Renewables Work?

The auction system represents Poland’s primary support mechanism for larger renewable energy projects. Introduced in 2016 to replace the previous green certificate scheme, this competitive bidding process allocates long-term contracts for renewable energy generation. Under this system, renewable energy producers bid to supply a specified amount of electricity at a fixed price over a 15-year period.

Auctions are organized by the Energy Regulatory Office (URE) and categorized by technology type and installation size. The government announces auction volumes and maximum prices annually, with separate “baskets” for different technologies to ensure diversification. Winning bidders are those offering the lowest prices while meeting all technical and formal requirements.

The Polish auction system has proven particularly successful for wind energy development and utility-scale solar projects. The guaranteed price stability it offers has been instrumental in attracting international investment by mitigating market risks. However, navigating the auction requirements demands thorough legal preparation, including securing appropriate permits, grid connection agreements, and environmental approvals.

For international investors seeking to participate in Polish energy auctions, working with experienced legal counsel like Kopeć Zaborowski Attorneys can provide crucial advantages. Their specialized knowledge of Polish energy regulations and auction procedures can significantly enhance application quality and success rates while ensuring full compliance with all requirements.

What Financial Incentives Are Available for Renewable Energy Investors in Poland?

Poland offers a diverse array of financial incentives for renewable energy development beyond the auction system. The net-metering scheme supports small-scale prosumers, allowing them to feed excess electricity back into the grid and receive credits on their energy bills. This program has driven remarkable growth in residential and small commercial solar installations.

For larger projects, preferential loans and subsidies are available through national funds such as the National Fund for Environmental Protection and Water Management (NFOŚiGW) and various EU-funded programs. These financial instruments often offer below-market interest rates and favorable repayment terms specifically for renewable energy investments.

Tax incentives further enhance the investment landscape. These include accelerated depreciation for renewable energy assets, exemptions from property tax in certain municipalities, and reduced connection fees for renewable installations. Additionally, Poland’s Special Economic Zones can provide income tax exemptions for qualifying renewable energy manufacturing facilities.

What is the Feed-in Tariff System in Poland?

Poland’s feed-in tariff (FiT) system primarily targets small-scale renewable installations. Under this mechanism, installations with a capacity below 500 kW are eligible for guaranteed fixed prices for the electricity they produce, providing investment stability for smaller market participants.

The FiT rates are determined by the Energy Regulatory Office and vary by technology and installation size. Microinstallations (under 50 kW) benefit from simplified grid connection procedures and reduced administrative requirements. The system has been particularly instrumental in catalyzing the growth of residential and small business solar PV systems.

The feed-in premium (FiP) variant of this system applies to slightly larger installations and provides a premium above the market price rather than a fixed rate. Both mechanisms offer predictable revenue streams, making them attractive options for smaller investors and community energy projects seeking to participate in Poland’s energy transition.

How Does Poland’s Energy Certificate System Function?

While Poland has largely transitioned to the auction system, certificates of origin (green certificates) continue to play a role in the country’s renewable energy landscape. These tradable certificates are issued to renewable energy producers for each MWh of green electricity generated. Energy suppliers and large consumers must either obtain these certificates or pay a substitution fee, creating a secondary market.

The certificate system now functions alongside newer support mechanisms, primarily serving existing installations that were commissioned before the implementation of the auction system. The certificates are traded on the Polish Power Exchange (TGE), with prices determined by market supply and demand dynamics.

For international investors with legacy renewable assets in Poland, understanding the certificate market remains important for optimizing revenue streams. The system’s complexity requires careful monitoring of regulatory changes and market conditions to maximize the value of these instruments.

What Environmental Permits Are Required for Renewable Projects in Poland?

Developing renewable energy projects in Poland typically requires securing several environmental permits and assessments. The Environmental Impact Assessment (EIA) is fundamental for larger installations, evaluating potential effects on local ecosystems, groundwater, noise levels, and landscape values. This process involves public consultations and coordination with multiple authorities.

Water permits are essential for hydropower projects and installations near water bodies. Additionally, projects affecting protected areas under Natura 2000 may require special nature assessments and conservation measures. Biomass and biogas facilities often need integrated permits covering emissions and waste management.

The permitting process involves engagement with various administrative levels, from municipal authorities to regional environmental directorates. International developers should anticipate lengthy approval timelines, particularly for large-scale projects. Early engagement with legal experts and environmental consultants can help identify potential obstacles and develop mitigation strategies before they impact project schedules.

How Does Grid Connection Work for Renewable Energy Facilities?

Securing grid connection represents a critical step in renewable project development in Poland. The process begins with a connection conditions application submitted to the relevant Distribution System Operator (DSO) or Transmission System Operator (TSO). This application must include technical specifications, planned capacity, and location details.

Grid capacity constraints present significant challenges in some regions, particularly those already hosting substantial renewable capacity. The operator evaluates whether the existing infrastructure can accommodate the proposed installation or if grid reinforcement would be necessary. Connection costs are typically shared between the developer and the grid operator according to a regulated formula.

Recent regulatory changes aim to facilitate grid integration of renewables, including priority dispatch for renewable energy and streamlined procedures for smaller installations. However, grid connection remains a potential bottleneck for renewable development in certain areas, requiring careful due diligence and early engagement with grid operators to assess feasibility and costs.

What Recent Changes to Distance Requirements Affect Wind Energy Development?

The regulatory landscape for onshore wind energy in Poland has undergone significant changes. The 2016 “Distance Act” established a minimum setback requirement of ten times the turbine height (10H rule) from residential buildings and protected areas, severely restricting available development locations. This restriction significantly slowed onshore wind development despite the technology’s cost-effectiveness.

In 2023, the Polish parliament approved amendments reducing this distance to 700 meters, effectively liberalizing the market and opening substantial new areas for development. This change is expected to trigger a wave of new wind farm investments, revitalizing a sector that had been largely stagnant.

The amendments also strengthen the role of local communities in the approval process, requiring public consultations and allowing municipalities to adopt local spatial development plans with specific provisions for wind energy. For international developers, these changes present new opportunities but also necessitate careful engagement with local stakeholders and thorough compliance with updated regulations.

What Opportunities Does Offshore Wind Present in Poland?

Poland’s Baltic Sea coastline offers exceptional conditions for offshore wind development, with favorable wind patterns and relatively shallow waters. The government has recognized this potential by establishing a dedicated legal framework through the Offshore Wind Act, which came into force in 2021.

The legislation outlines a two-phase support system. The first phase allocates support through administrative decisions for projects at advanced development stages, while the second phase implements a competitive auction system. Poland aims to develop 5.9 GW of offshore wind capacity by 2030 and up to 11 GW by 2040, representing one of Europe’s most ambitious offshore wind programs.

International investors have shown significant interest, with major energy companies establishing partnerships with Polish entities to develop large-scale projects. The sector benefits from a separate budget for support mechanisms, ensuring stable financial backing. For legal advisors specializing in energy law, offshore wind represents a growing practice area requiring expertise in maritime law, environmental regulations, and international project finance.

How Can International Investors Navigate Poland’s Renewable Energy Market?

For international investors, successfully entering Poland’s renewable energy market requires comprehensive due diligence across multiple dimensions. Legal analysis should examine property rights, permit validity, grid connection agreements, and compliance with spatial planning requirements. Technical assessment must evaluate resource availability, equipment suitability, and projected energy yields.

Establishing local partnerships often proves advantageous, providing access to market knowledge and existing relationships with authorities. Many international developers choose to acquire projects at various development stages rather than starting from scratch, allowing them to enter the market more quickly while mitigating certain risks.

Working with experienced legal counsel specializing in Polish energy regulations is essential for navigating the complexities of the market. Kopeć Zaborowski Attorneys offers comprehensive legal support for renewable energy investors, combining deep knowledge of Polish regulations with international business perspective. Their expertise spans project development, regulatory compliance, contract negotiation, and transaction structuring, providing crucial support throughout the investment lifecycle.

What Future Regulatory Changes Should Renewable Energy Investors Anticipate?

Poland’s renewable energy regulatory framework continues to evolve in response to EU climate policies and changing market dynamics. Investors should monitor several anticipated developments that could significantly impact the sector’s trajectory.

The implementation of RED III (the revised Renewable Energy Directive) will likely lead to additional regulatory changes aimed at accelerating renewable deployment. This includes potential streamlining of permitting procedures, enhanced provisions for energy communities, and stronger sustainability criteria for bioenergy.

Energy storage regulations are expected to develop substantially, creating new opportunities for integrated renewable-plus-storage projects. The emerging hydrogen economy also presents promising prospects, with Poland developing a national hydrogen strategy that emphasizes green hydrogen production using renewable electricity.

The ongoing liberalization of the prosumer market and collective self-consumption models will likely expand opportunities for distributed energy resources. Additionally, corporate power purchase agreements (PPAs) are gaining momentum as a support-independent model for renewable development, with regulatory changes anticipated to facilitate their wider adoption.

Bibliography:

• Renewable Energy Sources Act of 20 February 2015 (as amended)
• Energy Law Act of 10 April 1997 (as amended)
• Act on Investments in Wind Power Plants of 20 May 2016 (as amended)
• Act on the Promotion of Electricity Generation in Offshore Wind Farms of 17 December 2020
• National Energy and Climate Plan for Poland 2021-2030
• European Commission. (2022). REPowerEU Plan
• International Renewable Energy Agency (IRENA). (2023). Renewable Energy Statistics 2023
• Polish Wind Energy Association (PWEA). (2023). The State of Wind Energy in Poland
• Energy Regulatory Office (URE). (2023). Annual Report on RES Support Systems