The significance of an electricity trading licence
An electricity trading licence is a special authorisation issued by the President of the Energy Regulatory Office in the form of an administrative act. It permits the conduct of business activities in the field of energy trading, at both wholesale and retail levels. The licence holder acquires not only rights but also obligations, such as complying with market regulations, meeting technical and environmental standards, and maintaining appropriate standards of customer service. Holding a licence is therefore both a privilege and a responsibility that businesses in this sector must face.
Exemptions from the licence requirement
Not every entity operating in the electricity market is required to hold a licence for electricity trading. The regulations exempt from this obligation installations with a capacity not exceeding 50 MW that are not classified as renewable energy sources or cogeneration units. Similar exemptions apply to micro- and small installations and to energy generated exclusively from agricultural biogas, including in cogeneration, or exclusively from biofuels within the meaning of the RES Act.
How do you obtain a licence to trade in electricity?
The process of obtaining a licence to trade in electricity begins with gathering the necessary documentation to confirm the legal, organisational and financial capacity to carry out this type of activity. The entrepreneur must have their registered office within the territory of a Member State of the European Union, Switzerland, Turkey or a Member State of the European Free Trade Association (EFTA).
The entrepreneur must also demonstrate that they possess not only the necessary capital and equipment, but also access to qualified personnel capable of managing processes relating to the operation of the network, equipment and installations. It is also necessary to obtain a planning permission decision and to demonstrate that there are no outstanding payments of taxes constituting state budget revenue.
Who is ineligible for a licence?
A licence to trade in electricity will not be granted to an applicant who is in a difficult legal or financial situation. This applies in particular to businesses undergoing bankruptcy or liquidation, or those whose licences have recently been revoked for reasons specified in the Act. Furthermore, a licence will not be granted to an applicant who:
- have been convicted by a final court judgement for a criminal offence or a fiscal offence related to their business activities,
- is not registered as a VAT payer,
- if another entity exercising significant influence over them, or exercising control or joint control over them, has been convicted by a final court judgement within the last 3 years of a criminal offence or fiscal offence relating to the business activities specified in the Energy Law.
The process of obtaining a licence
The application process requires time and attention to detail. In addition to the required documentation, an application fee of PLN 616 must be paid. Each application is thoroughly analysed to ensure that all the required conditions are met. It is often necessary to submit additional documents on multiple occasions, which may prolong the wait for the final decision on the granting of an electricity trading licence. Experience shows that it is worth being prepared for the fact that the entire process may take longer than the 60 days stipulated by law.
Sale of energy from RES
Current regulations treat energy from photovoltaics and other renewable energy sources on an equal footing with traditional sources. Businesses wishing to trade energy on a larger scale must meet the same criteria as for trading energy from conventional sources.
Licence validity period
A licence to trade in electricity is usually issued for a period of 10 to 50 years, depending on the nature and scale of the business. Upon expiry, the licence holder may apply for an extension. Applications for extension must be submitted at least 18 months before the planned expiry of the current licence. If required in the public interest, the Energy Regulatory Office (URE) may order the continuation of the licensed activity for a further two years even after the licence has expired.
Obligations following the granting of a licence
The most important obligations of the licensee, apart from ensuring the high quality of the services provided, complying with legal regulations and conducting business in a manner that does not endanger health or life, also include the timely payment of the licence fee. The licence fee is an annual payment made to the state budget, charged against the operator’s operating costs. The amount of the licence fee is calculated as the product of the energy company’s revenue, derived from the sale of goods or services within the scope of its licensed activities, achieved in the year in which the obligation to pay the fee arises, and a coefficient set at the rate specified in the Regulation of the Council of Ministers of 12 October 2021 on the licence fee, namely: 0.0005.
Summary
Investing in electricity trading requires significant initial outlay. However, holding a licence for electricity trading opens the door for businesses to grow in this rapidly developing sector. Thanks to strict regulation, the energy market remains safe and stable, which is beneficial for both suppliers and consumers.
Our law firm offers professional advice and assistance in the process of obtaining a licence for electricity trading. 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 that will facilitate your entry into the electricity market and help safeguard your interests.
She specializes in civil, commercial and business law. In the corporate and energy department, her activities are mainly based on providing corporate services to companies, reviewing and preparing commercial contracts, drafting litigation and non-litigation pleadings and preparing analyses and legal opinions, particularly in the sphere of business law and energy law. She also has professional experience in administrative and civil proceedings, which she gained in Warsaw law firms. She supports the Firm's…
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