RES reference prices (regulation of 8/11/2023): PLN 872/MWh for small agricultural biogas plants, 15 years of support

The Minister of Climate and Environment issued on 8 November 2023 a regulation on the reference price of electricity from renewable energy sources, the periods applicable to producers who won auctions, and reference sales volumes (Journal of Laws (Dz.U.) 2023, item 2440, in force from 10 November 2023). Prices for biogas plants are markedly higher than the year before: agricultural biogas in installations below 500 kW – PLN 872/MWh, and in high-efficiency cogeneration – PLN 1025/MWh. The period of validity of the price and of the purchase obligation remains 15 years.

What is changing

Reference prices are the upper limits of bids in RES auctions. Selected values (PLN/MWh):

For comparison: onshore wind – PLN 378/MWh (up to 1 MW) and PLN 324/MWh (above), photovoltaics – PLN 414 and PLN 389/MWh, thermal waste treatment – PLN 474/MWh. The regulation also sets reference energy sales volumes for hybrid installations, for example 7700 MWh per MW per year for agricultural biogas below 500 kW.

Significance for the industry in Poland

Compared with the regulation of 31 October 2022 (PLN 785/MWh for agricultural biogas below 500 kW), the increase is about 11%. It reflects inflation in investment and operating costs. For agricultural biogas plants, the difference between an installation below 500 kW and one above 1 MW shows that the system favours small units, which is consistent with the agricultural model.

RES auctions are one of the main support mechanisms for biogas, alongside the new system for biomethane. For the project owner, the reference price is a ceiling on bids, so actual profitability depends on feedstock prices and costs.

What to pay attention to

When preparing an auction bid, the costs of substrates, servicing and financing over the whole support period must be calculated, taking indexation into account. It is also worth deciding whether the project is to operate on electricity alone or in high-efficiency cogeneration, because the difference in the reference price is significant.

Risks for investors

Higher reference prices do not guarantee profitability: the prices of substrates, energy and services have also risen, and financing is more expensive. A well-prepared project therefore has several sources of revenue (energy, heat, digestate) and flexible feedstock contracts.

What next

Further regulations will update prices every year. In parallel the ministry is preparing implementing acts for the biomethane support system.