Concession for the generation of electricity in Poland

What is an electricity generation licence?

Neither the provisions of the Entrepreneurs Act nor the Energy Law define the concept of a licence. We may therefore draw on legal doctrine. A licence constitutes an individual administrative act lifting the prohibition on freely undertaking economic activity in a given field and thereby permitting the addressee of that act (the licensee) to lawfully carry out such activity (K. Kohutek, Commentary on Article 46, in: M. Brożyna, M. Chudzik, K. Kohoutek, J. Molis, S. Szuster, Freedom of Activity).

The granting, refusal to grant, amendment, suspension and revocation of a licence, or the restriction of its scope in relation to the licence application, shall take place by way of a decision of the minister responsible for the subject matter of the economic activity requiring a licence, unless separate provisions provide otherwise.

A licence for the generation of electricity is issued by the President of the Energy Regulatory Office, entitling the operator to carry out activities involving the generation of electricity. This process is governed by the provisions of the Act of 10 April 1997 – Energy Law.

Who needs a licence?

Under the regulations, a licence is required for undertakings planning to generate electricity on an industrial scale. However, there are exceptions to this rule. A licence is not required for the generation of:

• electricity from sources with a total installed electrical capacity not exceeding 50 MW, not classified as renewable energy installations or cogeneration units,
• electricity in a micro-installation or a small installation,
• electricity:
• exclusively from agricultural biogas, including in cogeneration,
• exclusively from biofuels,
• heat from sources with a total installed thermal capacity not exceeding 5 MW,
• electricity fed into a traction network connected to the distribution network of an electricity distribution system operator or to the distribution network of an electricity distribution system operator as a result of vehicle braking.

How to obtain a licence?

The process of obtaining a licence for electricity generation consists of several steps:

1. Submitting an application: The company must submit an application to the Energy Regulatory Office (URE), containing detailed information regarding the planned activity, such as: the type and capacity of the installed energy sources, planned locations and generation technologies.
2. Meeting formal requirements: The application must be complete and comply with the formal requirements set out by the URE. The required documents include, amongst others, documents confirming the operator’s legal title to the facilities and installations necessary to carry out the activities covered by the licence; a description of the technical parameters of the equipment used for electricity generation should specify the type of fuel used and the technical condition of such equipment; the decision granting planning permission should cover the equipment, installations and networks.
3. Assessment of the application: The URE assesses the application in terms of its compliance with legal provisions and its impact on the energy market.
4. Issuing of the decision: Following a positive assessment of the application, the President of the ERO issues a decision granting the licence. The licence is issued for a fixed term of between 10 and 50 years.

Obligations of licensed companies

Companies holding a licence for electricity generation must fulfil a number of obligations, including:

1. Operating in accordance with the licence conditions: The company must comply with the conditions set out in the licence, including those relating to generation technology, installed capacity and location.
2. Reporting to the Energy Regulatory Office (URE): Regularly submitting reports to the URE concerning, amongst other things, the amount of energy generated, the technical condition of the installation and the environmental impact of operations.
3. Payment of fees: Upon receiving a licence to generate electricity, the licensee is obliged to calculate and pay an annual licence fee. This must be paid by 15 April each year.

Summary

An electricity generation licence is an important regulatory tool that ensures generation activities are conducted in accordance with the law, safely and efficiently. The process of obtaining a licence is complex and requires compliance with a number of formal requirements, but it is essential for ensuring the stability of the energy market and the achievement of environmental protection objectives.

HWW offers professional advice and assistance in the process of obtaining a licence for electricity generation. If you are wondering whether you meet the required criteria and wish to go through this process with professional legal support, we warmly encourage you to contact us. We offer comprehensive legal assistance to help you enter the electricity market and safeguard your interests.

Author

Agata Bączkowska

Adwokat, Senior Associate

She specializes in commercial and civil law. She has gained experience in Warsaw law firms providing comprehensive services to companies and a law firm specializing in labor law. She has extensive experience in corporate consulting. She has participated in mergers and acquisitions at every stage of the process, from pre-transaction legal examination to fulfillment of regulatory requirements related to the transformation process. She prepares and reviews contracts entered into by clients and advises in cases of…

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