In today's article from the "Lawyer on the Farm" series, continuing the topic of Renewable Energy Sources, we invite you to read the text in which we will comprehensively discuss the most important issues that should be kept in mind when implementing a biogas plant.
As an investor, you must first verify whether: (i) the location where the investment is to be implemented meets formal and legal requirements, (ii) you have sufficient financial and substrate resources. It is crucial to analyze the available substrates and determine whether: (i) their availability is seasonal, (ii) they are suitable for the fermentation process, (iii) their efficiency will be sufficient to produce biogas. From the outset, you must also determine: (i) what type of energy you will produce, (ii) whether the energy produced will be used exclusively for your own needs, (iii) whether the future biogas plant will require employees, and (iv) you will establish a business and choose its legal form.
From our perspective, the stage of obtaining all decisions and permits is the most difficult for the investor, as it is relatively time-consuming and least familiar to them. First, it's important to check whether the construction of a biogas plant will require an environmental permit. Pursuant to the Regulation of the Council of Ministers of August 10, 2023, amending the regulation on projects that may have a significant impact on the environment, if the biogas plant has a capacity of less than 500 kW and the total investment area does not exceed 1 hectare (0.5 hectare in areas designated for nature conservation), the investor is not required to obtain an environmental permit.
At the same time, a legal and technical inspection of the property where the investment will be implemented should be conducted to verify whether the land is located within an area covered by a local development plan (hereinafter referred to as "MPZP" ). In such a situation, it is crucial to verify whether the provisions of the MPZP allow for the construction of a biogas plant. However, because biogas plants are primarily built in rural areas where MPZPs do not apply, the investor will need to submit an application and obtain a zoning decision. The investor will be required to attach to this application, among other things, a development concept for the biogas plant on a copy of the master plan, the master plan, and an extract from the land register.
Once the investor obtains a zoning decision, they must then submit an application for a building permit, which must be submitted to the appropriate district office after preparing the building design for the planned investment. The following must be attached to the building permit application: (i) three copies of the architectural and construction design, (ii) a declaration of the right to use the property for building purposes, (iii) the zoning decision, and (iv) the environmental decision, if required for the investment in question.
Our practice shows that the best solution is to first obtain a decision on development conditions or an extract from the local spatial development plan, which will clearly state that the construction of a biogas plant in a given area is permissible, and then, in parallel, proceed to prepare a construction design and submit an application for connection conditions to the relevant local energy company.
We emphasize that energy companies are required to enter into a grid connection agreement with entities applying for connection to the grid, particularly for renewable energy installations (provided that technical and transmission conditions are sufficient to enable connection of the given source). Such an application must be accompanied by: (i) an excerpt and a drawing from the local spatial development plan (MPZP), (ii) in the absence of a local spatial development plan (MPZP), a decision on development conditions, (iii) a declaration of the right to dispose of the property, (iv) a development plan on a topographic map, (v) a description of the operational and operating characteristics of the devices, installations, or networks being connected, (vi) an advance payment of the connection fee.
If investors intend to sell their generated energy, they must submit a declaration and obtain a certificate from the Energy Regulatory Office (URE) confirming their eligibility to sell unused energy to the grid under the FIT/FIP system. The FIT system is designed for biogas plants with a capacity of up to 500 kW and features a fixed reference price for energy repurchase. The FIP system, on the other hand, is available to investors whose biogas plants have a capacity greater than 500 kW but not greater than 1 MW. All rules for the FIT/FIP systems are presented in announcements issued by the President of the URE.
We clarify that only after obtaining all of the above-mentioned decisions can the investor begin the construction process. However, this is not the end, as upon completion of construction, the following must be obtained: (i) an occupancy permit; (ii) entry in the register of agricultural biogas producers, maintained by the National Support Center for the Development of Biogas; (iii) a waste production permit, including a permit for waste storage and processing. Furthermore, it is crucial to comply with the reporting obligations related to the operation of the biogas plant.
In summary, it's important to emphasize that legislators strive to make it as easy as possible for investors to build a biogas plant. However, the administrative and legal process of obtaining decisions and permits remains time-consuming and complex. We also pay particular attention to selecting the appropriate land on which the biogas plant can be built. Therefore, in our opinion, conducting a thorough and detailed legal and technical analysis of the land is a responsible and extremely sensible solution.
We cordially invite you to follow our series "Lawyer on the Farm", as soon there will be new articles in which we will discuss the most important changes resulting from the Act of 13 July 2023 on facilitating the preparation and implementation of investments in agricultural biogas plants, as well as their operation.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of November 14, 2024
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