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Polish ministries divided over new renewables law

Source: Thomson Reuters Foundation - Tue, 20 Nov 2012 14:47 GMT
Author: Reuters
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By Maciej Onoszko

WARSAW, Nov 20 (Reuters) - Poland's Finance and Economy Ministry are divided over where to direct funds from fees paid by greenhouse gas emitters, a government official said on Tuesday, marking a fresh hurdle for the country's efforts to pass a new renewables law.

The clash is the latest conflict between ministries, local utilities and a powerful wind energy lobby as the coal-dependent nation seeks to optimise the stream of renewables investment.

The economy ministry wrote the draft renewables law but the finance ministry wants revenue from a so-called substitution fee to flow into the central budget, according to Janusz Pilitowski, head of the renewables department at the economy ministry.

The economy ministry targets the payment, which amounted to around 700 million zlotys (${esc.dollar}217 million) in 2011, for the budget of the National Fund for Environmental Protection and Water Management to help finance green investments.

"This (the finance ministry's demand for the money) is unacceptable, because these are funds that are in a sense dedicated to renewable energy," Pilitowski told a wind sector seminar.

"I appeal to you to support the Economy Ministry in this case, irrespective of the earlier wave of criticism."

The Finance Ministry did not immediately respond to an emailed request for comment.

The new renewables law, designed to help Poland reduce its heavy dependence on coal and meet European Union green energy targets, cuts support for large biomass co-firing and onshore wind in favour of micro-generation, solar power and offshore.

The country's renewable energy drive has so far focused on onshore wind farms and biomass, which involves mixing wood and other plant material with the coal before it is burned in coal-fired power stations.

Top utilities and the treasury ministry which controls them have criticised the law on grounds that loss of support would make biomass co-firing - the target of multimillion zloty investments of Polish power companies - unprofitable.

The bill has also sparked angry responses from the wind power industry, which fears wind farms could go bust with lower state support.

Poland generates around 90 percent of its electricity from coal. To meet European Union regulations on carbon emissions, the former Soviet-bloc nation has to increase the share of renewable energy to at least 15 percent by 2020.

The economy ministry is awaiting a new head after Waldemar Pawlak resigned on Monday following a defeat in a party election. (${esc.dollar}1 = 3.2269 Polish zlotys) (Reporting by Maciej Onoszko; editing by Michael Kahn and Keiron Henderson)

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