By Marynia Kruk
WARSAW--Poland's Economy Ministry wants to reallocate government
subsidies for renewable energy away from the co-firing of biomass
with coal, which have caused imbalances in the economy and haven't
fostered a fast-enough build up of new renewable power capacity,
ministry officials said Friday.
Polish power utilities such PGE Polska Grupa Energetyczna SA
(PGE.WA), Tauron Polska Energia SA (TPE.WA), and Enea SA (ENA.WA)
have received in total some 500 million zlotys in 2011 in subsidies
from the Polish government for the electricity they generate by
mixing the coal they burn in their old plants with biomass, such as
wood pellets, said Pawel Puchalski, an analyst at BZ WBK in
Warsaw.
The Economy Ministry wants to curtail this government support,
in favor of support for what it hopes will be a more diverse mix of
renewable power sources, including photovoltaics, and small and
scattered renewable installations.
Because co-firing of coal and biomass has been so lucrative, due
to the government subsidy which was introduced in 2005, demand for
biomass has skyrocketed, said Janusz Pilitowski, Director of the
Renewable Energy Department at the Economy Ministry.
Mr. Pilitowski was speaking at a news conference held to explain
the rational for the changes being proposed in a draft bill the
ministry published Friday and hopes will be passed this year, to go
into effect from Jan 1, 2013.
Poland is now importing PLN1 billion worth of biomass a year,
Mr. Pilitowski said.
"PLN 1 billion is a lot of money and perfectly healthy trees are
being cut down to make pellets," said Mieczyslaw Kasprzak,
Secretary of State at the Economy Ministry. "We don't want support
for co-firing to stuff someone's coffers."
Average wood prices in Poland have risen 40% since 2009, Mr.
Puchalski of BZWBK said.
Mr. Kasprzak added reducing biomass imports will help Poland's
trade balance.
The Economy Ministry draft bill also wants to increase subsidies
to households and small businesses who build renewable power
generation on their properties and to cut red tape to make it
easier to install solar panels on the roof of a house, for
instance, and hook it up to the grid.
-Write to Marynia Kruk at marynia.kruk@dowjones.com
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