Everything flows – all about the expected legislative changes in RES projects

Closer, and closer…

According to the old saying: “Everything flows” (from Latin: Panta rhei). Obviously, as in real life, the pace of change varies. The amendment to the Distance Act, keeping to an ancient references has been reminiscent of Odysseus’s journey to Ithaca in recent years. Fortunately, the change in this legislation has been transferred to the Ministry of Climate and Environment, and everything indicates that we will see a happy finale very soon. The deputy minister and government plenipotentiary for renewable energy sources, Mr Ireneusz Zyska, recently assured from the parliamentary rostrum that the adoption of the expected changes is still possible until the end of June this year¹. Developers along with the entire industry, like the mythological Penelope, are faithfully waiting in their home port for their beloved.

Other changes are also coming

Somewhat overshadowed by the amendment to the distance act, legislative work on the amendment to the act on spatial planning and development² is moving forward. A significant revolution in the applicable regulations is expected. The aim of the reform is to increase the flexibility and integrity of the spatial planning system and to prevent the dispersion of buildings into agricultural, forest and environmentally valuable areas, while facilitating investment in already built-up areas. The changes to the regulations would undoubtedly also affect the RES industry. The expected date of entry into force of most of the new regulations is 1st January 2023, and concern, among others:

• Introducing the conditions and directions of spatial development, the so-called General plans, which will have the status of acts of local law. Municipalities will have a time to 2025 to adopt General Plans. If they fail to do so, they will not be able to adopt the Local Plan, which in the case of large-scale RES projects will be the basis for obtaining a building permit. This time seems to be too short. As indicated even in the explanatory memorandum to the bill subject to consultations, a significant part of local plans is processed for over 3 years. It is highly probable that the same time will be needed to proceed with the General Plans, without which it will not be possible to adopt the Local Plan. Therefore, it is necessary to extend the proposed deadline.
• Introducing the requirement of compliance with the General Plan, not only for local spatial development plans, but also for the decision on building conditions (WZ) – a change that is extremely important in the context of the Distance Act, because such a provision would eliminate the risk of the impact of the issue of development conditions on the housing development considered in a wind farm project in the neighbourhood;
• Prohibition of issuing decisions on building conditions (WZ) not only for wind farms, but also for PV power plants, with the exception of PV installations with a capacity of up to 1MW located only on agricultural land constituting agricultural land of the weakest classes (V-VI) or wastelands;
• Introducing a validity period for decisions on development conditions – in the context of wind farm projects, within a few years, this change would allow for unblocking some of the areas blocked by the decision on housing development, which was never implemented. Currently, there are discussions about the validity period of already issued and future zoning decisions (initially it is a 3 or 5-year validity period);
• The planned amendment introduces, for other PV farms, the possibility of adopting a local plan in the so-called simplified procedure, i.e. bypassing the stage of collecting applications for the local plan and with a shortened path of agreeing and giving opinions on the draft plan. However, it should be remembered that, in accordance with the provisions of the amendment, obtaining consent for the simplified procedure of the plan also takes time, because it would have to be authorised, inter alia, by Regional Director of Environmental Protection. An investor could not automatically proceed with a simplified procedure only on the basis of the provisions of the act. The question arises how much time will be needed and what documents will be necessary to obtain the decision on the possibility of applying the simplified procedure for adopting a general plan?
• Change in the calculation of the planning fee for the increase in the value of the property as a result of the adoption of a local spatial development plan or a decision of the building conditions. The fee will always be charged, not only in the case of sale of the property within 5 years from the adoption of the plan. It may be connected with the necessity of incurring additional costs by the Investor (transferred to him as a result of agreement by the land owner) even in the situation when the investment does not actually take place. In fact, it is only when the property is sold that the owner’s profits can increase. A more appropriate approach would be the obligation to pay a fee of no more than 30% only at the time of sale of the property, possibly extending the current 5-year period of its incurring.

What are the thoughts of the industry?

The project of legislative amendment has met with mixed feelings in the sector. Developers of PV projects are opposed to the introduction of the Trojan horse in the form of a ban on issuing WZ decisions for PV installations, claiming that this will lead to an excessive extension of the investment process.

However, from my point of view it is a step in the right direction- under certain conditions. In my opinion, it cannot be said that large-scale PV installations do not constitute a significant change for the environment in the neighbourhood. Several dozen hectares covered with panels are undoubtedly a landscape dominant. We already dealt with this problem in the case of wind projects several years ago. A small part of them was then implemented in a questionable way. Too close proximity of turbines to houses, the installation of second-hand used and noisy turbines and the lack of reliable environmental monitoring were the main complaints then directed to the industry. Although we are talking about a small percentage of the whole scale, it prevented many great projects from being realised due to public protests. Residents expressed their concerns and successfully blocked investments based on negative examples of poor farm implementation. Honest investors, land owners and local communities were losing out, where these good projects did not come into being, but were gaining movements against renewable energy and lobbying fossil fuels.

The local plan procedure ensures proper public participation, and also the local society in making decisions about the legitimacy of investments in a given area. Assuming that for PV the local plan will be processed in a simplified version (e.g. one round of submitting comments to the project, without the need to repeatedly present the plan for public review), I consider this a good solution. I think that this should be a kind of compromise solution between the current situation and the introduction of very strict regulations, i.e. possible repetition of wind projects and the introduction of the distance act.

Therefore, let’s wait for the final version of the amendment to the act and, if necessary, point out potential Achilles heels in it, because there are many doubts! Phanta rei!

Kamil Koczara
Development Manager
Tundra Advisory

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[1] https://biznesalert.pl/wiceminister-klimatu-zapowiada-liberalizacje-ustawy-odleglosciowym-i-dalszy-rozwoj-oze/ accessed 14/05/2022

2 https://legislacja.rcl.gov.pl/projekt/12359051/katalog/12873795#12873795 accessed 14/05/2022