Innovative power, innovative regulation

Regulatory Assistance Project (RAP) supports the Polish regulator

The Polish Energy Regulatory Office (URE) intends by 2015 to introduce changes to existing investment support mechanisms, including support for investments of considerable importance for the innovation of the power system. Quality-based regulation will replace existing regulatory arrangements.

The Regulator intends to prepare financial mechanisms that will strengthen the prudence of investments, including investments in innovative energy (such as smart grids and smart metering). The President of the ERO will be supported by the Regulatory Assistance Project (RAP) – an international non-profit organization.

The concept of cooperation between the URE and RAP arose last year during a series of workshops co-organized by the Energy Regulatory Office and Energy Regulators Regional Association (ERRA), in which experts from the RAP participated.

Agreement – the Letter of Agreement (LoA) was signed on 1 June 2012 by Marek Woszczyk, President of the Energy Regulatory Office, and Richard Cowart, European Programmes Director of the Regulatory Assistance Project.

The agreement for cooperation provides for assistance in preparing various stages of the planned changes, including in the area of quality-based regulation and support for investment in smart grids. Cooperation with the Energy Regulatory Office will consist, among other things, of presenting best practices for quality-based regulation – assistance in designing the process for implementing changes by identifying objectives and options for support mechanisms. RAP and URE will work on an evaluation system for the planned mechanisms, an implementation plan, as well as on the choice of a rational transition strategy and methodology for monitoring and controlling for the effects of the new mechanisms.

The co-operation will also involve re-defining the regulatory framework to promote investment in energy produced by “prosumers,” network reliability, and activation of demand-side resources and energy efficiency.

By drawing on international experience, URE’s consultations with RAP will help identify alternative regulatory mechanisms and choose the best formula for introducing new support mechanisms. According to expert opinions, the regulatory system that has been in place since 2010 requires changes in a few areas, including an inadequate level of support for effective modernization of the distribution infrastructure.

The Regulatory Assistance Project’s experience is all the more valuable, as it draws on many years of cooperation between RAP and regulatory institutions and other public sector institutions, responsible for introduction of public policy in the area of electricity and gas markets. In recent years, RAP has collaborated with, among others, ERRA and the International Energy Agency (IEA). RAP does not provide services for commercial firms.

The agreement envisions, among other things, preparation of expert reports, organization of workshops for energy companies and consumer groups – energy consumers. The cooperation between RAP and URE will extend to the end of the first quarter of 2013.

Translated from the original announcement on the Polish Energy Regulatory Office website.