Investing in Offshore Wind Power Projects in Poland

Bislang wurde vor der polnischen Küste noch keine Windfarm errichtet. Der polnische Übertragungsnetzbetreiber schätzt das Potenzial für den Ausbau von Offshore-Windkraft auf ca. 6 GW bis 2030 und 14 GW bis 2050. Interessant ist diese Prognose für Unternehmen, die auf diesem Gebiet Know-how und Erfahrung haben, sei es das Errichten der Anlagen, die Zulieferkette als auch die Finanzierung, unter anderem durch ausländisches Kapital. Und damit ist man auch schon beim neuralgischen Punkt angekommen. Jegliches Investment braucht eine gewisse Sicherheit, d.h. stabile finanzielle und rechtliche Rahmenbedingungen sowie effektive Mechanismen, die betreffenden Rechte notfalls auch durchzusetzen helfen. Die polnische Regierung ist dem Offshore-Bereich gegenüber offen eingestellt. Ganz im Gegenteil zum Onshore-Bereich. Der nachfolgende Beitrag gibt einen Überblick über die jüngsten Änderungen der rechtlichen Rahmenbedingungen für Investoren und geht anschließend auf das Achmea-Urteil des EuGH und dessen Folgen für den Investorenschutz ein.

I. Change to the Legal Framework Requirements for Investments in Wind Power

In the recent past, operators of onshore wind power and solar plants and investors were faced with considerable difficulties in the realisation and financing of their projects. These difficulties were caused by the change to the support system mechanism in 2016 from a certificate-based system (so-called Tradeable Green Certificates) to an auction-based Feed-in Premium (1.) as well as new distance rules (2.). This has implications not just for the energy policy aims of Poland (3.), but also and primarily for investors (4.).

1. Change to the Support System

The certificate-based system provided that the plant operator sold electricity on the one hand at market prices and on the other hand sold certificates. Through the latter, they obtained an additional source of income. The corresponding market for the purchase of the certificates was created by a quota-based purchase obligation for energy providers. These certificates were either traded on exchanges or so-called certificate purchase agreements (CPAs) were concluded in the long-term, in order to guarantee a certain price and assurance of earnings.

CPAs form the subject of the latest arbitration proceedings of investors against the Polish government (the US American investors Invenergy, for example), since the government instructed the energy providers controlled by it, to terminate the CPAs with the plant operators when the market prices for the certificates fell to a fifth of their initial value. On account of the terminations, total losses incurred by investors amounted to billions. Particularly affected is the onshore wind power sector as well as the solar energy sector which, as compared with the new favourites of the government (in particular biomass and biogas), have been left empty-handed. This is made particularly clear by the fact that in 2016 no auctions for wind farms with a capacity of more than 1 MW were carried out and that in 2017 tender offers for simply 150 MW entire capacity for onshore wind were announced.

2. New Distance Rules

It is not just the change to the support system that gives the impression that onshore wind power is a thorn in the side of the Polish government. With the introduction of a minimum distance regulation which is comparable with the Bavarian equivalent, wind power plants on land must henceforth comply with a minimum spacing of ten times their hub height to the next construction or other reference point. In this way the potential area for projects is radically reduced and also existing approvals for projects which have not yet been realised will become illegal with retrospective effect.

3. Implications for the Aims of Energy Policy

None of this gives the exact impression that the Polish government is a reliable protector of overseas investments, even if for the achievement of its energy policy aims it should be directed at exactly these investments. The “2020-Aims” of the EU, in particular the 15% share of renewable energy in the energy mix, will scarcely be achieved by Poland with “clean” coal or biogas or biomass plants. In reality, this aim can only be implemented by wind farms and solar parks. The Polish government would find it hard to manage this alone because all the expertise can be found amongst the largest offshore nations, namely Great Britain, Denmark, the Netherlands and neighbouring Germany.

4. Implications for Investors

What should be done if a government neglects its obligations as protector of investments? A possible option is the above-mentioned route of raising a claim before an arbitration tribunal. Following the fall of the Iron Curtain and the subsequent changes of regime, Poland as well as other former Eastern Bloc states concluded with Germany, for example, investment protection treaties. The multilateral Energy Charter Treaty (ECT) also exists for the energy sector, and members are not just states like Poland and Germany but also the EU itself. This Treaty also contains protective clauses for investors which are supposed to protect against discrimination and compulsory purchase.

II. Achmea Judgment of the European Court of Justice (ECJ)

In March of this year, the ECJ held in its Achmea judgment that an arbitration clause in a bilateral investment treaty between the Netherlands and Slovakia was invalid, and set down certain specifications, including the requirement of the guarantee of uniform application of EU law. It added that this could only take place if there was an option to submit the matter to the ECJ for a preliminary ruling. Courts of arbitration do not have this option however because they are not a permanently established court or tribunal within the meaning of the Treaty on the Functioning of the European Union (TFEU). As a result of this, the Achmea judgment could have serious consequences in the future for other bilateral investment protection treaties.

What has not yet been clarified in this connection are the implications for the (multilateral) ECT. There are however substantial arguments against the transferability of the Achmea criteria to the ECT. To begin with, it is not just the Member States of the EU and the EU itself which are parties to the ECT, but also states which do not fall within the jurisdiction of the ECJ. The invalidity of the arbitration clause for the European investors would lead to a two-class system of protection for investor protection which would contradict the principle of equal treatment which is one of the underlying concepts of the ECT. Secondly, the ECT amounts to an international agreement, so that the withdrawal of the competence of the arbitration courts would breach international law on the one hand and would breach Art. 216 para 2 TFEU on the other hand, which binds the Union and its organs to internationally concluded treaties. Thirdly, the investment protection under the ECT exhibits certain parallels with other international instruments such as the WTO, which are acknowledged by the ECJ in other decisions, and the upholding of which the ECJ expressly emphasised in Achmea decision.

III. Outlook

Overall it can be stated that Poland has enormous potential at its disposal in the offshore field. The first international companies such as Equinor (formerly Statoil) for example, are making inroads into this market and are looking for cooperation with the Polish state companies, against all odds in the onshore field. Even if the German-Polish investment protection treaties were declared invalid in the event of a preliminary ruling by the ECJ, investors would still remain protected through the ECT and other multilateral protection mechanisms. Furthermore, elections will take place again next year.