Poland’s thriving wind energy industry has warned that it faces bankruptcies, rapid divestment and an end to growth under a bill that threatens executives with prison.
The wind power sector in Poland installed the largest amount of turbine capacity in the EU last year after Germany, taking total industry investment to €8bn. Turbines, including those owned by EDF, RWE and Eon, produce about 13 per cent of the country’s electricity.
But proposals submitted to parliament by the ultraconservative rightwing administration will tighten regulations to the point of killing off the industry, critics have said.
“For some projects, it will be terminal . . . it will kill them,” said Wojciech Cetnarski, president of the Polish Wind Energy Association, an industry lobby group. “This will result in bankruptcies. That is for sure.
“No one will invest any more in this country’s wind energy industry if this law is passed.”
The bill will make it illegal to build turbines within 2km of other buildings or forests – a measure campaigners said would rule out 99 per cent of land – and quadruple the rate of tax payable on existing turbines – making most unprofitable.
Another clause in the bill would give authorities the power to shut down each turbine for weeks at a time during monthly inspections, said industry figures. Violations would result in hefty fines or two years’ imprisonment.
Foreign investors are already viewing the bill with alarm.
“It’s hugely detrimental,” said Jim Murphy, chief financial officer of Invenergy, a large independent renewable generator in Chicago that has done a number of big wind power deals in Poland in the past. “The cost would be very, very powerful for the whole industry.”
Invenergy had been hoping that Poland’s new government would prove more amenable than its predecessors. The company is embroiled in litigation over about $500m of wind investments it claims went sour after state-controlled companies backed out of binding contracts.
RWE and other investors referred questions on the bill to the industry lobby.
Jaroslaw Kaczynski’s ruling Law and Justice party, which campaigned on a promise to crack down on the industry, said it wants to make legislation on turbines more “citizen-friendly”.
Wind power groups say the government is instead seeking to protect lossmaking coal mines run by state-owned companies and staffed by powerful unions. While the proposal is still being debated, the government has a majority in parliament.
Half of the Polish wind farm industry is controlled by foreign investors, while 65 per cent of the installed turbines are built by Vestas of Denmark, General Electric of the US and Gamesa of Spain.
“This is an existential threat,” said Mr Cetnarski. “There will be a number of investors who leave, and others that will simply go bankrupt.”
Poland’s wind farm capacity has risen to 5,400 megawatts from 83MW in the past decade. Some campaigners worry that Poland will fall short of EU rules demanding 15 per cent of electricity be obtained from renewable sources by 2020.
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