Session 3a Challenges in using EU structural funds for energy projects: RES case in PL Chair introduction Second European Conference of Municipal Energy Managers Warsaw, 5-6 October 2006 Grzegorz WIŚNIEWSKI Institute for Renewable Energy (EC BREC/IEO) Warszawa, Poland

Disposed of comunity institutions Disposed of domestic institutions Importance of EU support LOW SCALE OF PRODUCTION HIGH COSTS Investments R &D LEGISLATION GRANTS: - STRUCTURAL AID IEE 6 FP Development Strategy for RE sector: public support of 228 Mio PLN/a. (10 years, until 2010) Renewable energy technologies If only 1% of Structural Funds for investments in RE sector: community support of app. 300 Mio PLN ( )

EU pre-accession programs – first experiences in Poland 2. SAPARD (Scheme 3.5) – renewable energy-related projects, local communities, up to 50% of eligible costs (max PLN=app EUR). Total aid granted 4,8 Mio PLN=app. 1,15Mio EUR 3. ISPA (Environmental Protection) – alternative energy-related projects (above 50 MW, above 50 Mio EUR), up to 75% of eligible costs. Neither RES project supported. 1. PHARE (Infrastructure) – energy infrastructure, up to 75% of investment value. Examples: geothermal heating plants in Pyrzyce municipality and Podhale region 34% 19% 15% 14% 9% 7% 2%

Sustainable energy in national development program National strategic documents National Development Plan (NDP) Community Support Framework (CSF) Human Resources Competitiveness 2 Regional Development 3 Technical support Agriculture 1 Fisheries Transport OP Supplements Community Iniciatives Equal Interreg EAGGFERDF Cohesion Fund Environment Transport Strategy for Cohesion Fund !) SPO-ROL- SOP Restructuring and modernisation of food sector and development of rural areas 2) SPO-WKP - SOP Economy Competitiveness Growth 3) ZPORR - Integrated Regional Operational Programme

Technologies and beneficiaries of RES utilisation Beneficiaries* Renewable Energy Technologies, aid - % of eligible costsDistribution BiogasBiomassGeothermalSunWindWaterGrid Farmers Local municipalities Governmental institutions Municipal companies Other public entities NGOs SMEs Other private entities * One beneficiary may be supported only within one Operating Program OP Agriculture - beneficiaries limited to farmers and companies operating in agriculture sector -max. aid: 80000– PLN (app EUR) OP Competitiveness - enterprises operating in agriculture sector are excluded from group of beneficiaries OP Regional Development - projects below 10 Mio EUR Cohesion Fund Strategy - projects above 10 Mio EUR

Delay in opening of the calls for proposals Other technologies, not included to RES, may be supported Difficult to gauge whether assistance is used in full extent and along with its purpose Lack of specified budget for RES & RUE, Lack of transparence, Diffused responsibility Already competitive energy technologies will be supported Problems and difficulties with implementation of NDP in Poland(1) „MARKET-ORIENTED” NDP INCOHERENT APPROACH towards RES& RUE – 3 Operating Programs, several Implementing Institutions Lack of QUANTIFIABLE indicators for RES, e.g. MW, number of installations, etc. INCOHERENT DEFINITIONS of RES (unconventional, alternative, renewable sources) DELAY in state aid notification to European Commission

See above Less applications for financial aid for RES than possible, Lower quality of applications Insufficient incentive to stimulate investments in biomass and biogas Limited RES market development (small scale installations excluded) Problems and difficulties with implementation of NDP in Poland (2) Assistance for installations ABOVE 50 MW - OP Competitiveness, Cohesion Fund Strategy LOW LEVEL of assistance ( max. app – EUR) - OP Agriculture POOR INFORMATION for potential investors LOW USAGE of pre-accession aid, INEXPERIENCE of investors

Programmes and Instruments EligibilityPrioritiesAllocations New round of EU Cohesion Policy Objectives EUR bn (0.37% of EU-GNI ) 1. Convergence objective 81.7% (EUR bn) Regional and national programmes ERDF ESF Cohesion Fund including phasing-out Regions with a GDP/head  75% of average EU25 Statistical effect: Regions with a GDP/head  75% of EU15 and >75% in EU25 Member States GNI/head  90% EU25 average innovation; environment/ risk prevention; accessibility; infrastructure; human resources; administrative capacity transport (TENs); sustainable transport; environment; renewable energy 57.6% EUR bn 4.1% EUR bn 20.0% EUR bn 2. Regional competitiveness and employment objective 15.8% (EUR bn.) Regional programmes (ERDF) and national programmes (ESF) Member States suggest a list of regions (NUTS I or II) "Phasing-in" Regions covered by objec- tive 1 beween and not covered by the convergence objective Innovation environment/risk prevention accessibility European Employment Strategy 15.5% EUR 38.4 bn 3.4% EUR bn 3. European territorial co-operation objective 2.44% (EUR 7.5 bn.) Cross-border and transnational programmes and networking (ERDF) Border regions and greater regions of transnational co-operation innovation; environment/ risk prevention; accessibility culture, education of which: 77.6% cross-border 18.5% transnational 3.9% interregional + ENPI

RES related EU budged (including ERDF and Cohesion Found) accompanied by required state and private financing – a general national framework for Poland Operational programme title RES related priorities/activities Projects types (above Euro 5 mln) Available funds: EU/national/priva te contributions, [mln Euro] “Infrastructure and environment Priority 10 “Energy infrastructure friendly to environment”, action: 10.2 “Increased generation of energy from RES” (2 others priorities are related for RUE and infrastructure) biomass electricity up to 10 MWe biomass and geothermal CHP green heat production biofuels (biodiesel) production RETS (all type) equipment production facilities 334,2/59/219 “Innovative economy” Priority 4 “Investment in innovative technologies and products” (including especially those having positive impact on environment) RTD Development and implementation of know-how. Investment in modern (national scale at least) research and innovation Investment support for industrial and private research and development centres 2 838/425/0

Some questions and themes for discussion 1.Is the scope and budged for RES and RUE clearly defined by the governments, at the level of „priority & action” in the national operational programmes and regional programmes? 2.Does the scope of action/priority result from generic national/regional RES/RUE strategy and encompass relevant implementation programme or this is just a „collection of particular wishes”? 3. What is the minimum size of eligible projects: are realy small scale projects (and SMEs) supported more than large scale projects (large companies)? 4.Is there a priority for innovative energy technologies (e.g decentralised systems) or it is support for already existed energy markets? 5.Were there local energy actors involved in the priories development process and in consultation?