GDF Suez may seek compensations if Poland cut support for biomass co-firing - report

Oct 4, 2012 - French power and gas utility GDF Suez (EPA:GSZ) threatens to demand compensations from the Polish authorities if the country adopted a new bill proposing lower levels of support for biomass co-firing power plants.

The planned rules for biomass co-firing, which is key for GDF in Poland, are considerably worse than the current regulations, Polish daily Puls Biznesu reported yesterday citing Grzegorz Gorski, general director of GDF's Polish arm. GDF, which owns and operates the 1,800-MW Polaniec coal and biomass co-firing power plant in Poland, will demand an arbitration and ask for the Polish State to give back several millions of Polish zloty if the new rules come into force, Gorski said.

GDF Suez is currently building a 205-MW biomass unit at the Polaniec plant. The company has so far spent PLN 400 million (USD 126.5m/EUR 97.8m) in the Polaniec project, its head was quoted as saying.

The current level of green incentives in Poland is in the form of one green certificate (GC) per 1 MWh generated for all renewable energy systems during their lifetime. The draft renewable energy law, prepared by the Polish energy ministry and expected to come in force in 2013, envisages the launch of corrective coefficients for the different renewable energy technologies that will result in higher level of GC support for the solar and offshore wind sectors to the detriment of biomass co-firing and onshore wind projects. The draft bill also proposes that support to biomass co-firing plants be reduced to only five years from the start of operation, while the other green energy sources will be issued GCs for 15 years.

The European Union (EU) has demanded from Poland to reduce its carbon dioxide (CO2) emissions and to raise the share of renewable energy to at least 15% of its energy consumption by 2020.

(PLN 1 = USD 0.316/EUR 0.244)

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