Abstract
The paper presents one of the key problems in renewable energy trading. The support system for RES is operating on financial levels leaving to the RES producers decisions on the energy trade. However, the flawed legal regulations impose the obligations on Default Electricity Supplier (SzU1) to buy all RES production from the installations located in the areas of the SzU operation. Such legal provisions result in the additional burden on the SzU, which main duty is to provide electric energy to customers who do not want to enter competitive electricity markets. Additionally, over interpretation of the Energy Law provisions by the Energy Regulatory Authority (URE2), allowing the RES producers to trade a part of their production on electricity markets leaving the obligation on SzUs, has led to the speculative trade of renewable energy. Some RES producers sell the electricity produced in competitive markets during peak demand hours – usually working days from 7 a.m. to 8 p.m. – when the Power Exchange prices are significantly higher than the obligatory purchase price. When during off peak demand hours electricity prices in the Power Exchange are lower than the obligatory level, RES producers sell the electric energy to SzUs at the obligatory price, determined by the URE. Such an abuse of fair trade results in the additional income for the RES producers being burden on SzUs, which have to transfer such costs to energy endusers. The simulations, carried out for Poland indicate that the additional costs can count for about 200 mln zl per year. DOI: 10.12736/issn.2300-3022.2014301 1. Obligatory RES energy purchase by Default Electricity Suppliers (SzU) 1.1. Flawed legal solutions The obligation imposed on the SzU to purchase all electricity produced by the RES installations in any time and amount leads to additional costs which are eventually transferred to electricity end-users. The unclear and inconsistent provisions of the Energy Law (art. 9, p.6) and the position taken by the URE in its interpretation of this law (14/2013 – 21 May 2013) allow the RES producers to trade electricity in competitive markets in periods when electricity prices are higher than the obligatory price level, preserving the obligatory purchase of the RES energy by SzUs. Such flawed legal regulations result in the abuse of the fair trade rules and additional costs for electricity users. 1.2. Fast development of renewables Some RES technologies require adequate climate conditions. The examples can be photovoltaic cells and wind farms. In Poland, wind farms are usually located in the northern part of the country where the climate conditions provide the opportunity for better utilization of wind generation compared to other parts of Poland. In all electricity markets small customers are protected in various ways in transition period of the competitive market introduction. Common solutions include the establishment of Default Electricity Suppliers (SzU), which are obligated to sell electric energy to small customers who are not familiar with the market rules and they prefer to buy electricity on fixed rates. The SzUs operate in the areas determined by their licences. In Poland, the SzUs are also obliged to purchase all electricity produced by the RES installations located in the area of their operation. It causes that the SZUs located in the Northern Poland are obliged to buy large amount of electricity produced by the RES, mostly by wind farms. The example is given in Fig. 1. In 2012, the RES energy produced and purchased in the northern part of Poland, in the default area of ENERGA Group, counted for 14% of the total energy sold to electricity customers. The fast development of the RES caused 1 Default Electricity Supplier is called in Polish „Sprzedawca z Urzedu – SzU” 2 Energy Regulatory Autority in Polish is named „Urząd Regulacji Energetyki – URE” W. Mielczarski | Acta Energetica 3/20 (2014) | 6–11
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.