In recent months, the wind power sector has observed the progress of work on a bill to amend the Wind Energy Investment Act and certain other laws. It is much-awaited by the industry, due to the stringent “10H rule” still in force. The bill is expected to be sent to the Polish parliament in the first quarter of 2022, but the first draft by the Ministry of Development and Technology has already been released.
Investors’ and customers’ expectations
The expectations of the onshore wind sector have been known for a long time. First and foremost is liberalisation or abolition of the 10H rule, which has effectively blocked the development of new onshore wind projects in Poland. Under the 10H rule, a distance of at least ten times the height of an onshore wind power plant must be maintained between the wind power plant and residential buildings, in practice making it impossible to build new wind capacity on land. Also, investors expect improved transparency and streamlining of the wind power siting process, improved clarity of rules for cooperation with local government, and clear rules for conducting dialogue with the local community, which will make work on onshore wind projects faster and more efficient.
But it is not only the energy sector that is hoping for a breakthrough in wind power construction rules. So are business and industry, especially energy-intensive industry. The new wind capacity would reduce wholesale electricity prices, which have been at record levels on the Polish Power Exchange for several months. For large customers, the availability of electricity supply under PPA and cPPA contracts would also increase (in this aspect, a separate issue necessary for the spread of corporate long-term contracts for the purchase of electricity from renewables is the permissibility of building direct lines, or at least providing companies virtual access to electricity from renewable sources). Liberalisation of the 10H Act would also boost the local and national economy.
While the sector’s expectations are clear, the question remains how far the current proposal would achieve these demands.
Proposed changes: liberalisation of the 10H Rule
First of all, the bill maintains the basic minimum distance of a wind power plant from development at the 10H level. But this rule would become more flexible, as considerable authority would be vested in local governments to determine the location of wind power plants under the planning procedure of amending the local zoning plan. The obligation to prepare or amend a local plan for the needs of a given development would apply to the area of projected impact of a wind turbine and not, as before, the entire area designated under the 10H Rule. Pursuant to the amended Art. 4(2), the local plan could specify a different distance of a wind turbine from a residential building, larger than the range of impacts of the wind turbine determined in the forecast, but this distance could not be less than 500 metres (in which case, a condition would be to conduct an environmental impact forecast as part of the local zoning plan). Analogously, Art. 4(3) would permit residential buildings to be sited on the basis of a decision on development conditions at a distance of not less than 500 metres from a wind turbine, with such buildings being exempt from the obligation to maintain a distance calculated in accordance with the 10H rule.
The bill would also elaborate on the rules for determining the distance within which wind turbines may be sited by defining new reference points between which the shortest distance is run to test the acceptability of construction of a wind power plant (thus, the draft maintains the familiar mechanics of testing this distance, but expands the range of available reference points). This change is complementary to the modification of the general 10H rule, and thus could make it even more flexible and realistically expand the area in which future projects could be implemented. At the same time, the draft does not change the rules for claiming compensation by property owners in connection with adoption of a local plan.
The draft upholds the principle of locating a wind turbine based on a local plan, which is particularly evident from the interpretation of the proposed wording of Art. 7, according to which it would be necessary to redo the planning procedure whenever the range of impact of a wind turbine, according to the forecast prepared for the local plan siting the turbine, would extend beyond the area covered by the draft local plan. This would allow areas actually covered by the range of impact of the wind turbine to be taken into account. Moreover, if the range of impact were broader than the area covered by the local plan and extended beyond the borders of the commune where the wind turbine is located, a local zoning plan would also have to be prepared by a “nearby commune.” But the draft defines the term “nearby commune” within the act, which should make it easier to identify the neighbouring communes obliged to undertake a specific planning action. However, the final distance from residential buildings would be verified and determined as part of the procedure for issuing a decision on environmental conditions for a given project by the regional director of environmental protection, on the basis of a detailed environmental impact report prepared by the investor, taking into account the minimum absolute distance defined in the bill. Abandoning the description of the 10H rule in terms of forms of nature protection also seems to be an interesting solution. Determination of implementation conditions in this respect would be subject to analyses within the framework of environmental impact forecasts and decisions involving the local plan, as well as to the decisions of the regional director of environmental protection for the given project. This means that the actual environmental impact of a project could be verified only at the level of analysis of the assumptions of the specific project.
However, departure from the basic 10H rule would not be entirely discretionary, as making the distance rule for locating wind turbines from buildings more flexible, subject to a minimum distance of 500 metres, would involve additional obligations to consult with local residents during public discussions. The public discussions would also focus on the proposed amendments to local plans setting a new framework for construction or redevelopment of wind power plants. The bill also proposes to extend the deadlines and clarify the rules for public review and acceptance of comments on the draft local plan and the environmental impact forecast. The term “nearby commune” reappears here, and the head of a commune (such as the mayor of a city) would have to issue an opinion if a wind turbine under construction in a neighbouring commune would also have an impact within the area of that commune.
As an additional element of the proposed amendments, it is important to note the strengthening of the obligations of the wind power plant operator with respect to safe operation of the plant. The proposal would introduce additional obligations regarding technical activities relevant to ensuring safe operation of technical elements of wind turbines, to be performed by the Office of Technical Inspection (UDT) and specialised commercial services (whose activities would also be monitored by UDT). The proposal would expand the definition of “wind power plant operator” to mean an entity with its registered office or residence in a member state of the European Union, the Swiss Confederation, or a member state of the European Free Trade Association which is a party to the Agreement on the European Economic Area, conducting business in the field of electricity generation in a renewable energy source installation using onshore wind energy to generate electricity. The purpose of this provision is to identify the entity acting as a party before the president of the Office of Technical Inspection with respect to implementation of activities and obligations concerning the rules for safe operation of technical elements of a wind turbine. (The bill calls for introduction of a separate new section 2a in the 10H Act devoted to this issue.)
Conclusions: a possible 25-fold increase in area available for onshore wind power
Will the proposed amendment to the 10H Act meet the hopes placed on it by the wind power industry? At the moment, it is too early to issue a final verdict, as the wording of the bill may still change in the course of legislative work in parliament. However, the proposed solutions ensure significant liberalisation of the current rules, and the drafters seem to be aware of the importance of the bill for the development of the onshore wind energy sector in Poland. This is evident, for example, in the shifting of the current Art. 8 of the 10H Act to Art. 1(1a), at the beginning of the act. This suggests that the drafters believe that the 10H Act should be treated as a more specific law (lex specialis) in relation to other laws, in particular the Planning and Spatial Development Act, the Construction Law, and the Act on Disclosure of Environmental Information.
According to a study prepared by the Instrat Foundation for Strategic Initiatives, the proposed changes would allow for the placement of onshore wind turbines on nearly 7.08% of the area of Poland (up from the current 0.28%), increasing the area available for wind turbines by more than 25-fold and enabling construction of nearly 31–32 GW of new wind capacity.
In addition, the amendment to the 10H Act would lay the groundwork for development of an attractive new industrial sector related to hydrogen production. Indeed, the hydrogen industry is closely watching the progress of legislative work on this bill, as the desired model for hydrogen production identified in the “Polish Hydrogen Strategy for 2030 with a view to 2040,” which we discussed in our last article, ultimately includes the use of low-cost renewable sources of electricity.
The changes described above are undoubtedly a necessary step toward amending the 10H Act and liberalising the current rules restricting investments in onshore wind capacity. At the moment, it can be considered a strategic document, anticipated not only by investors, but also by customers, including energy-intensive industries.
Igor Hanas, adwokat, Damian Brudzyński, Energy practice, Wardyński & Partners
