Infrastructure construction will determine the pace of the Polish electromobility market

The growth of electromobility in Poland has not been as spectacular as its participants predicted. At the same time, we can hope that it will accelerate, which would result from the duties foreseen in Directive 2014/94/EU of the European Parliament and of the Council of 22 October 2014 on the deployment of alternative fuels infrastructure. However, this will certainly occur slower than expected. Popularizing electromobility is an opportunity for certain local industries while being a challenge for others (especially the electric power industry). Clearly, this will not happen without the construction of infrastructure allowing for the recharging of electric vehicles. Likewise, until there is a sufficient number of such vehicles in Poland, it is difficult to discuss the market forces driving the development of infrastructure to recharge them. This is why the Polish legislature included mechanisms in the Act of 11 January 2018 on electromobility and alternative fuels (the “Act”) to resolve the issues raised by the dilemma: which should come first – recharging infrastructure or electric vehicles? The Act mandates that recharging infrastructure be developed in the first phase of the market’s expansion, regardless of the number of electric vehicles. This is because the critical element determining the growth of electromobility is recharging infrastructure. Thus, we are currently at a key moment of this process’s implementation.

Minimum number of recharging points

The most important regulations regarding the above were included in the specific provisions of the Act. First, we should note Art. 60, which sets out the minimum number of recharging points which are to be installed by 31 March 2021 at publicly accessible recharging stations (further as “PARS”) situated in communes (gminy) with a certain population (at least 10,000 inhabitants), and also satisfying the additional criteria of having a certain saturation of vehicles. One should note the definition of a “publicly accessible recharging station”, as, according to Art. 2 pt. 6 of the Act, this term is understood to be ‘a recharging station which is accessible on a non-discriminatory basis to each user of an electric vehicle or hybrid vehicle’. This is not a precise definition, and disputes regarding it would require a separate discussion.

Procedural complexity

The legislature not only imposes a minimum number of recharging points at PARS, but also provides for a specific route to achieve the state desired, specified in Art. 61 of the Act, whereby the mayor, or city president subject to the abovementioned duty is required to prepare a report by 15 January 2020 on the number of recharging points installed at PARS in the commune. This report must include information both on the number of existing PARS locations, as well as the number and locations of PARS scheduled to be put in place by 31 December 2020, and – most importantly – the number of recharging points required to reach the minimum number specified in Art. 60 para. 1 of the Act.

According to Art. 62 of the Act, if the report proves that the minimum number of recharging points has not been met, the commune’s local executive authority shall issue a development plan for PARS, to be issued by 15 March 2020. This plan is subject to public consultations with the commune’s residents. It is also delivered to electricity distribution system operators (“eDSO”) within whose jurisdiction PARS are planned to be constructed, in order to finalize the plan. Once its draft is finalized, it is then submitted to the local council, which may adopt it by way of a resolution. Once adopted, the plan is then submitted to the eDSO, and the President of the Energy Regulatory Office. On the basis of the plans they receive, the eDSOs will then develop a grid connection schedule for the PARS contemplated in the draft plan.

This complex procedure is not the end goal in and of itself, as, according to Art. 64 of the Act, the eDSO with jurisdiction over the PARS included in the plan will build such stations, while the costs of their construction are included in the reasonable costs used to calculate the electricity tariff for the electricity distribution services they provide (thus charging all users of the distribution system, including those who do not own electric vehicles and, for example, only receive electricity for household purposes).

We are currently witness to this process, and its implementation and effects will determine the growth of electric vehicle recharging infrastructure, which itself is necessary to increase the number of such vehicles.

The importance of cooperation between eDSOs and communes

In the context of the above, the cooperation of eDSOs and communes is highly important. This cooperation is, however, not specifically regulated by the Act. It can be approached formalistically, merely being satisfied with fulfilling the requirement to achieve the minimum number of recharging points at PARS within a commune, but such a view would be mistaken as it would disregard the aims of these provisions. The location of recharging stations is equally important to their number. Electric vehicle users would use them more enthusiastically if they are found in key locations (for example, in city centers, where users can deal with a number of tasks while recharging their vehicles, rather than at the edges of a city). Both operators and local governments are fulfilling the public duties imposed on them, and they are not intended to profit (but rather are loss-generating, as can be seen from the inclusion of related costs in the eDSO tariffs). They are intended to assist in establishing a specific market, rather than to benefit from its opportunities (which is evident from the duty to transfer the operation of such PARS to other entities not being eDSOs, i.e. an energy trader – see Art. 65 of the Act).

Such cooperation allows local governments to not only make attractive properties in the commune available for PARS, but also to agree to favorable conditions under which they will be made available to eDSOs, especially in terms payments for such properties. The Act of 21 August 1997 on real estate management, regulating, among others, the rules for the trade in and management of real estate by territorial self-government units, gives communes a degree of flexibility in this regards (for example, in relation to public purposes), but neither these provisions, nor the Act, mandate that communes act in a certain manner in such cases.

As we can see, communes play a key role in the expansion of electromobility. A flexible approach to their cooperation with eDSOs, an understanding of the duties imposed on them and eDSOs by the legislature, and the ability to make decisions which realistically benefit their residents will be the determinative factors in the success of recharging infrastructure’s growth in Poland in the coming years.

Author:

dr hab. Jakub Pokrzywniak, attorney-at-law, partner at WKB Wierciński, Kwieciński, Baehr law firm

Last Updated on January 21, 2021 by Karolina Ampulska