RES auctions for biogas plants: who can take part, what documents and security are needed

A RES auction is a competition of bids conducted by the President of the Energy Regulatory Office (URE), in which a generator undertakes to sell electricity from biogas (in 2021 also agricultural biogas injected into the gas grid) at a stated price, and is entitled to support for at most 15 years. An agricultural biogas plant competes in separate baskets, set apart by type of biogas and capacity, so it does not compete with wind farms or photovoltaics.

How an auction proceeds

• Organiser. The President of URE announces, organises and conducts auctions at least once a year.
• Announcement. It appears in the URE Public Information Bulletin (BIP) no later than 30 days before the auction and states, among other things, the date of the session and the maximum quantity and value of energy.
• Platform. Bids are submitted electronically, through the online auction platform; each participant submits one bid per installation in a session.
• Settlement. The auction is settled if at least three valid bids have been submitted. The lowest prices win, but the total volume of winning bids cannot exceed 100% of the volume in the announcement or 80% of the quantity covered by all the bids.
• Maximum price. A bid cannot exceed the reference price, which the minister for climate sets for each basket by regulation.

Baskets for agricultural biogas

The Act divides auctions by type of installation, and agricultural biogas has its own group of baskets:

In addition, the auctions covered the sale of agricultural biogas injected into the gas distribution grid — the reference prices were then applied after converting the quantity of gas into its electricity equivalent. Biogas from landfills, from wastewater treatment plants and other biogases have their own, separate baskets.

Two routes of entry

An installation already in operation. A declaration of intent to take part in the auction is submitted on the platform; after confirmation of its acceptance, a bank guarantee or deposit must be provided in the amount of PLN 30 for each kW of installed electrical capacity.

A new or modernised installation. This requires a formal assessment: an application to the President of URE for a certificate of admission to the auction. You attach, among other things:

1. the grid connection conditions or a connection agreement,
2. a final building permit (if required),
3. a physical and financial schedule of implementation,
4. a diagram of the installation with metering devices and the connection point,
5. declarations on substrates and on not using prohibited fuels.

The connection documents and the permit must be valid for at least six months on the date of submission. The President of URE issues the certificate (or refuses) within 30 days; the certificate is valid for 12 months. The security here is PLN 60/kW.

What a bid contains

• the quantity of energy in MWh and the price per 1 MWh,
• the location, type and capacity of the installation and the point of connection to the grid,
• the planned start date and the period of sale,
• a declaration on substrates: only the raw materials listed in Article 2(2) of the Act may be used for agricultural biogas,
• information on investment aid received and the corrected price resulting from it,
• a commitment to the first sale in the system within 42 months of the close of the session.

The equipment making up the installation should have been manufactured in the 42 months preceding the first generation of energy and must not have been previously depreciated by another entity.

Support after winning

For installations with a capacity below 500 kW, the energy is bought by the obliged seller, who bears the costs of commercial balancing itself. Larger installations benefit from the right to coverage of the negative balance — the difference between the price in the bid and the market value of the energy sold. The support period is up to 15 years from the first sale, but no longer than until 30 June 2047. The regulations link the settlement of auctions after 2021 to a decision of the European Commission on state aid, so the schedule of a specific auction is worth checking in the URE announcement.

Typical mistakes

• An application for a certificate submitted so late that the connection documents lose validity before the session.
• A bid based on substrates outside Article 2(2) (e.g. fractions from municipal waste).
• No security by the deadline, or a payment to the wrong account.
• A price that ignores investment aid, which reduces the corrected price.
• An overly optimistic schedule: the 42 months for start-up count from the close of the session.

Investment aid and the corrected price

If an installation has received a grant or other investment aid, the Act reduces the price in the bid by it (Article 39); the corrected price is calculated by the formula in Article 39(4)–(5) (the value of the aid is indexed), and not by simply subtracting the amount of the grant from the price in PLN/MWh. The bid states the value of the aid and the corrected price resulting from it. The declaration is made under pain of criminal liability, and the President of URE may check that the data match the aid actually granted. Aid granted after a won auction must also be reported and recalculated.

Modernising an existing biogas plant

A modernised installation is admitted to an auction if, on the date of submitting the bid, it is not entitled to certificates of origin, to the purchase obligation or to the right to coverage of the negative balance, the modernisation increases the capacity or the quantity of energy generated (or restores the original state), and the documented expenditure amounts to at least 40% of the eligible costs of a new reference installation. The detailed catalogue of costs is set by a regulation of the minister for climate.

Example preparation schedule

The intervals above are a simplification resulting from statutory deadlines; when planning an investment, leave a margin for remedying formal deficiencies.

This text is for information purposes and does not constitute legal advice; before an investment or formal decision, check the current wording of the regulations and consult a lawyer or the competent authority.