Iberdrola Urges Poland to Keep Support for Wind Power
Stock Chart for Iberdrola SA (IBE)
Reducing incentives for onshore wind would have a “very negative effect on investors’ trust,” Lech Kuleszynski, head of Iberdrola Renewables Polska Sp Zoo, said in an e-mail. The company has 84 megawatts of wind in Poland and plans to start work on a further 38 megawatts this year if the new law allows.
Poland, which gets about 90 percent of its power from coal, published a draft renewables bill in December aimed at spurring alternative energy while saving the government as much as 1 billion zloty ($283 million) a year. The plans, with amendments proposed in April and May, may curb incentives for new onshore wind farms and boost subsidies for more costly offshore wind.
A reduction in support for new onshore projects may have a “dramatic impact” on investment decisions, Kuleszynski said.
December’s draft law signaled cuts to onshore wind support to 0.75 of a “green certificate” for every megawatt-hour from existing and new projects, down from one previously. Following investor complaints that the plan would erode project finances, the government published a new draft proposal on May 29, keeping support at one certificate for current projects, while suggesting it may limit aid to 15 years after commissioning.
Such a restriction doesn’t offer investors enough stability to make future commitments, Kuleszynski said. The draft proposes a cut to 0.9 of a certificate in 2013 for new wind farms of 500 kilowatts or more, dropping to 0.825 of a certificate in 2017. The certificate system obliges electricity suppliers to get a portion of the power they sell from clean sources.
Such curbs may help Poland shore up funds to boost economic growth, which it forecasts will slow to 2.5 percent this year from 4.3 percent last year.
While support for new onshore wind farms will almost certainly decrease, banks may regain their appetite to finance projects once the regulatory uncertainty ends, said Anna Czajkowska, an analyst at Bloomberg New Energy Finance.
The government said in April it will continue to oblige utilities to get a share of their energy from clean sources after 2017. That may encourage future investments because it provides stable demand, Kuleszynski said.
A spokeswoman at the Ministry of Economy said the government is still revising the draft law and couldn’t give a publication date.
To contact the reporter on this story: Sally Bakewell in London at Sbakewell1@bloomberg.net
To contact the editor responsible for this story: Reed Landberg at email@example.com
Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.