In the area of PMOZE_A (certificates of origin of energy generated from renewable sources), there has been a permanent surplus of rights on the market, which was reflected by the low price levels recorded in 2016 and in H1 2017. As at 27 April 2018, it is estimated that after the fulfilment of the obligation for 2017 around 25 TWh of active PMOZE_A will remain on registers. The Regulation of the Minister of Energy of 11 August 2017 determining the obligation level for the years 2018-2019 (17.5% and 18.5%, respectively) improved the perspective for the long-term handling of the surplus. In addition, the amendment to the RES Act (of 20 July 2017) and the interpretation of the Minister of Energy in the scope of the lack of possibility of settling the replacement fee as long as the unit replacement fee does not reach the maximum level (300.03 PLN/MWh), resulted in a strong increase in prices of PMOZE_A to the level of PLN 70/MWh and established a sustained upward trend.
In the area of PMOZE_BIO (certificates of origin of energy generated from agricultural biogas), the situation has completely changed when compared to the redemption obligation for 2016. In the first half of 2017, the prices reached a level of PLN 470/MWh. The valuation of the instrument came close to the level of the unit replacement fee (PLN 300.03/MWh) only after the publication of the first draft amendment to the RES Act in June 2017, conditionally unlocking the possibility of settling the replacement fee. Since this point in time, the prices of “light blue” property rights have remained above the replacement fee, but they are close to it (above PLN 317/MWh), with account taken of the purchaser’s benefit resulting from the possibility of deducting the excise tax (PLN 20/MWh) for the fulfilment of the obligation through redemption of certificates of origin. The price trend is maintained due to the fact that the conditions for paying the replacement fee have been met since the beginning of 2018. This should continue as long as the average three-month PMOZE_BIO price is above the level of the unit replacement fee.
The current system of property rights for cogeneration remained in effect until the end of 2018 and throughout 2018 legislative work was under way on a new support system operating on the basis of an auction system. The work was completed with the adoption of the Act of 14 December 2018 on the promotion of electricity from high-efficiency cogeneration, which entered into force on 25 January 2019.
In 2017, for the first time the moment of fulfilment of the obligation was set to the end of June, in connection with the new Act on Energy Efficiency of 20 May 2016. As a result, there are currently four indices for “white” property rights on the market, i.e.:
- PMEF – energy efficiency certificates issued on the basis of a system of tenders pursuant to the previous legal basis, subject to expiry as of 30 June 2019;
- PMEF-2017 – energy efficiency certificates issued for completed investments, for applications submitted in 2017 (outside the system of tenders), which, like “cogeneration” property rights, expired after 30 June 2018;
- PMEF-2018 – energy efficiency certificates issued for completed investments, for applications submitted in 2018 (outside the system of tenders), which, like “cogeneration” property rights, shall expire after 30 June 2019;
- PMEF_F – energy efficiency certificates issued for non-started investments pursuant to the Act of 20 May 2016, without expiry date.
On 20 July 2017, results of the last tender for investments in the field of energy efficiency, announced by the Energy Regulatory Office on 21 September 2016, were published. The projects selected in individual categories amounted in total to nearly 55% of the pool (806.743/toe in total). The growth in the number of PMEF on the market resulted in the fall of prices of the instrument in H2 2017. In the end, however, index prices returned to the average level of PLN 712/toe due to the appearance of information from the Ministry of Energy that if there is a risk that after the obligation for 2018, i.e. after 30 June 2019, unused PMEFs will remain on the registers, then measures may be taken to change the date of their redemption, i.e. extend their validity. The recent amendment to the Act on Energy Efficiency, although it facilitated the process of application for support for activities in favour of energy efficiency, in connection with the failure to initiate a tender procedure, it simultaneously reduced the PMEF_F supply though the limitation of support for a project to the amount of one average annual energy saving. This translated into the valuation of PMEF_F at a level of PLN 1,500/toe (similar to the unit replacement fee).