The end of tilting at windmills in Poland

This legislative initiative is part of the European Union's consistent pursuit of ‘’greening’’ the economy and achieving climate neutrality goal. The European Green Deal and the part of it, adopted in 2023 Fit for 55 package, aiming to lower the number of greenhouse gases emissions, have been the subject of the great interest. The number of legal amendments implementing the above initiatives is increasing at a steady pace, affecting all sectors of the economy. A particularly large proportion of these relate specifically to the energy sector. In order to accelerate the shift from fossil fuels to clean energy, the EU issued the RePowerEU Plan and adopted the RED III Directive, amending the RES segment. Under its terms, the mandatory target for renewables in total energy consumption is now to rise to 42.5% by 2030.

Renewable energy is also growing in strength at Polish market

In Poland the role of RES in the energy generation mix is becoming increasingly important as well, and changes in this field are happening faster than one might think. According to data for October 2024 compiled by the Energy Forum (Forum Energii), the share of electricity coming from coal was only 52.3%, making October the month with the second lowest share of coal in the energy mix ever. In turn, RES generated a total of 33.4% of energy, of which almost half of renewable energy generation - 47.9%, came from wind farms. This means that in the analysed month, wind farms were responsible for generating around 16% of the country's electricity. Although there is still a long way to go to reach the EU targets, the direction of change is already clearly visible. According to the assumptions of the update to the National Energy and Climate Plan to 2030, published in October by the Ministry of Climate and Environment (Ministry), by 2030 already ca. 56% of energy in Poland is to come from RES. For the green revolution to happen, however, a number of legislative changes are required, one of which is to be the government's draft amendment to the Act on Investment in Wind Power Plants and Certain Other Acts (the draft amendment), published on 25 September, with the overarching aim of contributing to an increase in energy production from onshore wind power plants.

Freezing of investments in wind farms

According to data compiled by the Ministry, there are many factors in favour of wind energy. Its development is the cheapest way to transform Poland's energy, using tested, safe technology. Poland has a relatively large share in the supply chains of wind energy components and services, and yet it is not utilising a huge part of its potential. For years photovoltaic farms have remained the form of investment in RES more readily chosen by entrepreneurs, and wind power projects have been largely confined to offshore energy.

The primary reason for this is the halt in the construction of windmills on land as a result of the 2016 Wind Farms Investment Act (the Wind Energy Act), which introduced the so-called 10H rule. Under this principle the distance from which a wind turbine may be located and built to a residential building must be equal to or greater than ten times the height of the wind turbine measured from ground level to the highest point of the structure, including technical elements, in particular the rotor including blades (i.e. the total height of the wind turbine). This provision applied to onshore farms and radically limited the acreage that could be used for wind energy purposes.

What’s in the Wind Energy Act amendment?

Abolition of the 10H rule

The draft amendment discussed in this article is not the first approach to liberalising the law on the construction of wind farms. The general ‘’10H rule’’ was retained in 2023, but the legislation opened the door for the municipal council to reduce this distance as part of the adopted local spatial development plan (local plan, LSDP), but to no more than 700 m. This is still a very conservative regulation and its effect has proven to be insufficient.

The current draft amendment firstly envisages the abolition of the ‘‘10H rule’’ and instead introduces a distance of 500 metres between wind turbines and residential buildings.

The aim is to unblock a part of investments, so far frozen by the introduction of the above-mentioned rule. As we read in the regulatory impact assessment to the act, according to estimates of the Polish Wind Energy Association (Polskie Stowarzyszenie Energetyki Wiatrowej), which brings together the most important wind energy market companies in Poland as well as investors and turbine manufacturers, the reduction of the minimum distance from 700 m to 500 m may increase the possible capacity in new onshore wind farms projects by up to 60-70%. In turn, the Instrat Foundation (Fundacja Instrat) estimates that this change will increase the allowable area for such investments by approximately 75%.

Streamlining of the planning procedure

A change that is undoubtedly expected and required is the sorting out of the issue of public consultations of local spatial development plans. The problem arose after 24 September 2023, i.e. after the entry into force of the amendment to the Planning and Spatial Development Act (Planning Act), where the above-mentioned issue was exhaustively regulated. However, the provisions relating to the same sphere and, as of 23 April 2023, contained in the Wind Energy Act, were not removed.

This has created a highly undesirable situation, where similar but different norms can be found in the two Acts, and their application poses many interpretation problems, making the development of local plans much more difficult. Therefore, in the draft amendment it was decided to repeal the provisions on consultation requirements from the Wind Energy Act and to regulate this issue in its entirety in the Planning Act, and additionally to transfer to it the provisions specifying the requirements to be met by local plans based on which wind power plants are to be established, i.e. to specify the maximum total height of a wind power plant, the maximum diameter of a rotor with blades and the maximum number of wind power plants, as well as the investment location area. An important novelty is the indication that the above parameters will be the projected values as at the date of drafting the justification to the local plan resolution.

Location of power plants based on Integrated Investment Plans

While discussing the issue of local plans, it is crucial to mention the planned changes aimed at facilitating the location of power plants based on Integrated Investment Plans (IIP), i.e. a special type of local plan adopted by a municipality at the request of an investor. The IIP covers the area of the main investment and the complementary investment (for more on the specifics of the IIP, see the article in Polish by Michał Smolny in Rzeczpospolita of 9.08.2023: Is the end of spatial chaos in municipalities coming? / Czy nadchodzi koniec chaosu przestrzennego w gminach?). Regarding the municipalities where a power plant is to be developed, if such a municipality wishes to locate wind power plants under the IIP procedure, pursuant to the draft amendment it will have to hold at least an open meeting with the local community within 30 days of the municipal council expressing its consent to the development of the IIP and at the public consultation stage. The draft amendment also introduces the possibility of using IIPs in neighbouring municipalities, which in practice means that, by virtue of negotiations with the investor, complementary investments will also be able to be built in municipalities that are only within the impact range of the power plants, rather than in the sites themselves.

Liberalisation, but not quite

Nature protection areas

In the draft amendment, a lot of controversy surrounds the conditions for locating windmills in the vicinity of Natura 2000 sites.

As the only one of the RES sources, wind energy is currently subject to a complete ban on the location of power plants in national parks, nature reserves, landscape parks and Natura 2000 areas. In the case of locating a wind power plant in the vicinity of national parks, the ‘’10H rule’’ still applies, and in the case of nature reserves, the distance must not be less than 500 metres.

The modification of the rules for locating wind turbines would be to set a minimum distance of 1,500 m from national parks and 500 m from certain Natura 2000 areas – those which are special bird protection areas and special bat habitat protection areas. This change provoked a lively discussion, as until now the construction of power plants was banned only in Natura 2000 areas themselves, but not in their proximity (unless one of the Natura 2000 areas was also a nature reserve or national park). At this point it should be pointed out that all Natura 2000 sites currently cover about 20% of Poland's area. Determining the appropriate distance of wind power plants from the designated protected areas, taking into account nature conservation on the one hand and not causing undue obstruction to the construction of wind infrastructure on the other, is therefore of considerable importance. The postulates of the Association ‘’With Energy About Law’’ (''Z energią o prawie'') that these distances should be established on the basis of detailed environmental studies in each case seem to be reasonable. It should be borne in mind that depending on the location, Natura 2000 areas are characterised by different biodiversity. Each case should therefore be assessed separately by the competent environmental authorities.

The proposal to deviate from the ‘’10H rule’ in the case of the distance of wind farms from national parks has in turn raised objections among local government circles. As already signalled, the drafters decided in favour of setting a fixed distance of 1500 m in such cases. Critics point out that such a regulation actually increases restrictions on the construction of wind power plants in the vicinity of national parks, as, given the average height of an onshore windmill, which is approximately 80-120 m (although there are some higher ones), the regulations as the stand are more investor-friendly. However, given the special nature of the protected areas within the national parks and their still small number, as well as the fact that their total area covers about 1 % of the country's surface, this problem seems to be a minor issue.

What about the neighbouring municipality?

The obligation to include in the LSDP all sites within a distance (according to the proposed amendments) of 500 m from a planned wind power plant appears to be a significant problem. The wording of the proposed provisions leaves no doubt that where the distance of 500 m from a wind power plant extends beyond the boundaries of the municipality in which the wind power plant is located, a local plan shall also be drawn up by a nearby municipality, at least for the area located within its territory, which is within this distance. This is, moreover, a logical consequence of the general rule already established in 2016 that wind power plants can only be located on the basis of local plans. Therefore, it is not permissible to build such investments on the basis of, for example, a decision on land development conditions (decyzja o warunkach zabudowy), and any potential future deviations from the abovementioned rule seem unlikely, as indicated in the justification to the draft amendment. A significant risk in the whole procedure is that in a situation where the designated area from the power plant overlaps even to a small extent with the area of a nearby municipality, the decision on the possibility to commence the investment will also depend on whether the nearby municipality, at least for a part of its territory, adopts a local plan. This obviously entails costs for the municipality and an obligation to exclude part of the land affected by the power plant. This problem already exists under the current regulations, and the change of the ‘’10H rule’’ to 500 m will only reduce the scale of the problem to a certain extent. However, it is not hard to guess that nearby municipalities affected by this problem may not be willing to adopt local plans for such investments and consequently they might effectively block them. The possibility (but not the obligation) for the investor to carry out a complementary investment in a nearby municipality, if that municipality decides to adopt a local plan under the IPP procedure, may prove to be a certain incentive. As already indicated in the first part of the article, so far only municipalities where wind farms were being built could take advantage of this possibility. However, it should be noted that although the Planning Act lists a broad catalogue of potential investments that may constitute a complementary investment, such an investment must serve the main investment. Therefore, in the case of wind power plants, , ait seems that only the construction or reconstruction of a road or land development network may be considered. For this reason, it appears that the benefit to the municipal community may  be severely limited , especially as the above investments would probably have to be built anyway in order to properly serve the power plant. However, much will depend on individual negotiations between the nearby municipality and the investor, and the serviceability of the complementary investment in relation to the main investment may in practice prove to be interpreted very freely.

In order to compensate for the inconvenience for local communities, the draft amendment additionally provides for the possibility of taking advantage of the virtual prosumer gratification formula to be extended to residents of nearby municipalities. A resident of a municipality will not have to hold the legal title to the wind power installation in order to conclude an agreement to take up a share of the installed wind power capacity. The residents of the municipality where the wind power plant is located will have priority in taking up the capacity, followed by the residents of the neighbouring municipality. It is assumed that at least 10% of the wind power capacity will be made available in this way. It seems that at least some of the sceptics of wind energy may be encouraged by such a solution.

Not only windmills

Although the proposed changes relating to wind power attract the most attention, the draft amendment provides for changes also in other areas of RES, especially to the biomethane sector. First and foremost, they aim to complement the existing support system for generators with an additional tool in the form of an auction for biomethane for installations above 1 MW. Pursuant to the data provided in the regulatory impact assessment, the proposed mechanism will support the production of about 300 million m3 (about 3 100 GWh) of biomethane per year, which will require the construction of about 50 installations. In practice, this means that support will be available to a biomethane producer using a RES installation that feeds this fuel gas into the gas grid. It is very important that the aforementioned support can be combined with investment support (e.g. grants and loans from National Fund for Environmental Protection and Water Management (Narodowy Fundusz Ochrony Środowiska i Gospodarki Wodnej)) and is subject to the accumulation rule. It will be available for a maximum of 20 years, provided that generators begin producing biomethane within four years of the auction outcome. Public support will also be conditional on meeting sustainability and greenhouse gas emission reduction criteria.

Changes are also coming with regard to the regulations for renewable energy prosumers. Their aim is to increase billing transparency for renewable energy prosumers. The seller will be obliged to provide prosumers with more detailed and standardised billing data. Furthermore, the draft amendment also includes proposals such as the possibility for existing prosumers to choose their billing method, the possibility to increase the refund value from 20% to 30% of the prosumer's unused funds for energy injected into the grid and to increase the value of the prosumer deposit relating to a given calendar month of the correction factor to 1.23, which will be particularly relevant in the case of a change of energy seller.

The draft amendment also plans to adjust the definition of a renewable energy source installation by changing (extending) the definition of ‘’electricity storage’’ to ‘’storage’’, which will also include heat and cold storage facilities. Of the other proposals contained in the draft amendment, it is worth mentioning the simplification of the operation of the support system for modernised hydroelectric installations.

Proposed changes in a nutshell

In summary, the draft amendment contains a cross-cutting package of changes to wind power and other forms of renewable energy. The most important of these include:

• abolition of the general 10H rule,
• modification of rules for locating wind turbines from national parks and Natura 2000 sites,
• a new mutual and minimum distance between onshore wind energy installations and residential buildings, set at 500 m,
• regulation of the possibility to locate a wind power plant on the basis of Integrated Investment Plans,
• harmonisation of the planning process,
  introduction of support mechanisms for biomethane production.

The public consultations of the draft amendment ended in November. According to recent assurances from the Ministry, it is to be submitted to the lower legislative body (Sejm) by the end of the year. Time will tell whether the long-awaited breakthrough will occur and if hopes for a de-freezing of investment projects will come true. It must be remembered that becoming independent from imported fossil fuels by increasing the share of RES energy in the energy mix is a key task on the way to ensuring energy security and sovereignty for Poland and the EU as a whole.

It is high time to put an end to the tilting at windmills for good - but only in the reasonable and well-crafted way.