The headwinds of the Polish PPA market



Power purchase agreements (PPAs) are growing in popularity in Poland due to high energy prices and the declining attractiveness of renewable energy auctions. However, regulatory changes have created uncertainty and reduced attractiveness.

“As market prices rose sharply, a number of PPAs were signed, most of which were corporate PPAs (10 out of 13 announced in 2022),” said Ann Cocquyt, Pexapark’s Regional PPA Lead. , as an example of this V-Ridium PPA with T-Mobile Polska.”

The use of the latest renewable energy auctions was disappointing.

Competition and low bid prices compared to investment growth are the main reason for undersubscribed auctions,” Cocquyt said. pv magazine. “Solar energy’s PPA activity clearly picked up when the (separation agreement) strike prices did not keep up with wholesale market prices. However, market prices have risen since then, and long-term risk-taking profitability remains limited.”

He said that there is strong demand from companies, but the question is at what prices and in what time frame, as that will determine whether replacing the separation agreement option is sufficient. Going forward, cost efficiency, price protection against rising electricity costs, and sustainability efforts are expected to continue to drive PPA demand. However, the headwind also has an effect.

“There are a number of important regulatory changes that make conditions uncertain and less attractive,” Cocquyt said. “The income ceiling is valid until December 30, 2023, and its level is well below the 180 euros/MWh that the EU proposed.”

A revenue cap of 355 zlotys/MWh ($83.50/MWh) for solar power plants over 1 MW was implemented in November 2022. This required all plants with power purchase agreements to pay a tax on the income above the auction reference price plus 50 zlotys. exceed this amount. The solution was criticized because it significantly affected the profitability of solar power plants.

“Equilibrium markets have been tampered with (price regulation) and the obligation to exchange day-ahead volumes has been removed, potentially making the day-ahead market less liquid and pricing less transparent,” Cocquyt said. “This could have a negative impact on long-term appetite among both commodity sellers and investors.”

New regulations are expected for the Polish PPA area in the coming months, including possible permits for the construction of direct lines related to the supply of energy under the PPA agreements.


David is a passionate writer and researcher who specializes in solar energy. He has a strong background in engineering and environmental science, which gives him a deep understanding of the science behind solar power and its benefits. David writes about the latest developments in solar technology and provides practical advice for homeowners and businesses who are interested in switching to solar.

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