In the face of progressive decarbonisation, growing energy demand and obligations under the European Union’s climate policy, investment in modern energy technologies is becoming a key pillar of energy security and economic competitiveness. Energy storages, as one of the important tools of the energy transition, enable the effective management of surplus energy coming, among others, from renewable sources such as photovoltaics and wind power. The information presented in this article is aimed in particular at familiarising potential beneficiaries with the available forms of support and indicating the key conditions for participation in the programmes. What are energy storage facilities?
Energy storage facilities are systems designed to collect, store and subsequently use electricity. In practice, they play a key role in increasing the flexibility and stability of electricity systems by enabling real-time balancing of energy supply and demand. They enable efficient energy management, which is becoming particularly important in the context of the growing share of renewable energy sources (RES). The Energy Law of 10 April 1997 defines an energy storage facility as an installation enabling the storage of energy, including electricity storage.
Typical energy storage facilities use technologies such as lithium-ion batteries, compressed air-based systems, thermal storage, as well as mechanical solutions such as flywheels. Their key task is not only to store surplus energy, but also to supply it at times of peak demand, allowing better utilisation of generation capacity and reducing energy losses.
In the Polish market, the development of energy storage facilities is supported by numerous subsidy programmes, including the use of EU funds. This type of investment is necessary to meet the growing demands of energy security and the integration of zero-emission technologies.
ZEN2050 and the impact of RES on the development of the energy storage market
According to the targets adopted by the European Union, and therefore also by Poland, total energy decarbonisation and, inter alia, thanks to this, climate neutrality – ZEN2050 – is to be achieved by 2050 (we wrote about this in more detail in the article https://blog-tpa.pl/2024/09/20/fundusze-unijne-dla-oze-i-dzialan-prosrodowiskowych/). The Polish National Climate and Development Report concludes that without extensive investment activities, this goal will not be realistic to achieve in the planned time horizon (the currently projected net emission reduction is 79% in 2050) and lists the activities necessary to achieve it:
- accelerating the pace of transition away from coal
- elimination of barriers to the dissemination of RES
- reducing the function of gas as a transition technology in the ZEN2050 scenario, in contrast to current policy
- consistent promotion of the low-carbon potential of hydrogen and CCS
- increasing the scale of electricity trading.
Renewable energy sources are an increasingly important part of the energy mix, both globally and in Poland, and this trend is set to grow – as envisaged – until we move away from fossil fuels and other non-renewable sources altogether. However, a characteristic of many RES is their instability and seasonality. A wind farm only produces energy at certain wind strengths; in situations where the wind is too weak or too strong, production is interrupted. A photovoltaic farm in winter produces minimal amounts of energy, while in the period of maximum output, such as May, June, July (in Poland), an overproduction of energy can be expected during the day. The surplus, which is not consumed by the producer/prosumer, will be lost if he/she has no energy storage where he/she can store it until it is used. Of course, the overproduction can be discharged into the public electricity grid, but increasingly the grids are unable to accept the surplus and are issuing notices of non-marketable redispatch of generating units. In practice, this means ordering some suppliers to disconnect from the transmission networks and the energy produced may be lost.
On the other hand, increasing the use of RES can destabilise power grids due in part to the unpredictability and fluctuations in the amount of energy produced – from overproduction to none. This poses a major problem for both operators and distributors, as well as consumers, including prosumers; it is a powerful factor blocking the shift away from traditional non-renewable energy production methods.
Energy storage could be the solution – a growing trend is evident and is expected to grow rapidly with the development of RES. However, investors are still deterred by high investment costs.
Selected support options
An essential element for the energy transition is energy storage facilities, which will allow surplus energy to be managed during periods of overproduction and used as an energy back-up when the supply of power is reduced. According to the Ministry of Climate and Environment: „Currently, one of the most important obstacles to the rapid growth of renewable generation capacity is the shortage of energy storage capacity needed to stabilise electricity grids and enable the connection of new renewable energy sources” (source). The low involvement of the private sector is also a problem, not least because of the high entry costs for investment. The solution is to be found in all kinds of incentives from the state and the provision of a range of support instruments, including grants and loans.
Below is a selection of support options. If any of them meet your needs, please do not hesitate to contact us.
Competition for funding of energy storage projects
1. Electricity storages and related infrastructure for improving the stability of the Polish electricity grid (Priority Programme project).
EU FUNDS: Modernisation Fund
ORGANISER: National Fund for Environmental Protection and Water Management
APPLICANTS: Entrepreneurs
ALLOCATION:
- PLN 4 billion, including:
- Grants up to PLN 3.6 billion
- Loans up to PLN 0.4 billion
FORM OF SUPPORT:
- Co-financing in the form of a grant covering up to 80% of eligible costs
- Co-financing in the form of a loan covering up to 85% of eligible costs, with an interest rate based on WIBOR 3M +50 pp, not less than 1.5% per annum on market terms (the loan does not constitute public aid)
- For investments generating income from the sale of energy, the applicant is required to contribute own funds amounting to at least 15% of eligible costs (in the case of loans, own funds granted by other NFOŚiGW programs are allowed)
FINANCED ACTIVITIES:
- Mandatory element: Construction or reconstruction of heat sources with a capacity of at least 2 MW and storage facilities with a capacity of at least 1 kWh/EURkW after storage certification.
- Additional scope: Expansion or construction of electricity generation sources, installation or battery modules, use and processing systems for hydrogen fuels (including hydrogen production), installation and use systems for biogas (including biomethane) together with accompanying infrastructure for storage and delivery.
The investment must be aimed at achieving energy efficiency improvement through modernization or replacement activities leading directly or indirectly to reducing greenhouse gas emissions.
DEADLINE FOR SUBMISSION OF APPLICATIONS:
- End date: End date for submission is until the end date specified in the call announcement.
ELIGIBILITY CRITERIA:
- The project must be implemented within [installation] EU ETS installations if operation shall take place within 36 months from signing the grant agreement.
- The deadline for signing the grant agreement is December 31st.
- The eligibility period begins from January 1st preceding year when application was submitted.
- Eligible costs include expenses incurred after January first preceding year when application was submitted.
- Eligible costs include expenses incurred after January first preceding year when application was submitted until December thirty-first following year when project completion deadline falls.
- The eligibility period is from date disbursement last loan installment to final repayment installment.
Competitions for funding for projects that may include the construction of energy storage facilities
2. Green loan
EU FUNDS: European Funds for Modern Economy Programme 2021-2027
ORGANISER: National Economy Bank
APPLICANTS:
- Large mid-cap and small mid-cap enterprises
- SMEs
ALLOCATION: PLN 755 million
FORM OF SUPPORT:
- Ecological loan – reimbursement of up to 50% of the amount of a loan taken out for the implementation of a project at a commercial bank (from 15% to 80% depending on the type of enterprise and the location of the investment):
- Large enterprises up to 60%
- Medium-sized enterprises up to 70%
- Small and micro-enterprises up to 80%
FINANCED ACTIVITIES:
- Thermal modernisation of buildings used for business activities
- Modernisation/replacement of internal installations, machinery and equipment with less energy-intensive ones
- Investments in Renewable Energy Sources (RES) installations, including energy storage systems
- Implementation of energy management systems
- Other activities aimed at improving energy efficiency in enterprises, including those allowing for the circular economy (green roofs, walls), and consulting services
APPLICATION DEADLINE:
- First call:
- From: 17.10.2024 – until exhaustion (PLN 600 million)
- Second call:
- From: 17.06.2025 – until exhaustion (PLN 155 million)
Additional Information:
- The required primary energy savings are at least 30%
- Obtaining a bank commitment or an agreement on granting an ecological loan with a commercial bank listed by BGK
- Applicants must have legal title to real estate where they plan to implement thermal modernisation of buildings
- The maximum value of eligible costs is EUR 50 million
3. District cogeneration
EU FUNDS: Modernisation Fund
ORGANISER: National Fund for Environmental Protection and Water Management
APPLICATIONS: Entrepreneurs conducting business activity in the field of heat production or heat and electricity production, implementing an investment project within the district heating system, with a total capacity of less than 50 MW on the date of submitting the application.
ALLOCATED AMOUNT: PLN 1 billion, including:
- For non-repayable forms of financing – up to PLN 500 million
- For repayable forms of financing – up to PLN 500 million
FORM OF SUPPORT:
- In the form of grants from PLN 1 million to 50% of eligible costs
- In the form of loans ranging from PLN 2 million to 100% of eligible costs; loans may be partially non-repayable
- Preferential terms: WIBOR3M + 50 bps fixed margin, not less than 1.5% p.a. minimum
- On market terms (to be determined individually)
FINANCED ACTIVITIES:
- Mandatory element: Construction/reconstruction/modernisation of production units with a total installed capacity of at least 1 MW, operating under high-efficiency cogeneration conditions (excluding sources using biomass), and connecting them to networks in which the following products are produced:
- Waste heat
- Renewable energy sources
- Gaseous fuels (gas systems, synthetic gas or hydrogen)
- Optional elements may include:
- New or rebuilt heat sources
- Hybrid energy
- Connection to the electricity grid
- Gas connection
- Energy storage facilities; its integration with the constructed source
APPLICATION DEADLINE: 12/2024 – Q5/2025
ELIGIBILITY CRITERIA:
- Installations for co-combustion of solid fossil fuels with other fuels (e.g., biomass) in multi-fuel combustion installations are excluded from support.
- Installations that use biomass as fuel are not eligible.
- Installations are eligible for co-financing if at least one product is fed into a network.
- If an installation is launched in a calendar year, it is included in this year’s budget.
4. Cogeneration for heating – part 1
EU FUNDS: Modernisation Fund
ORGANISER: National Fund for Environmental Protection and Water Management
ALLOCATION: PLN 3 billion, including:
- For non-repayable forms of co-financing – up to PLN 1.5 billion
- For repayable forms of co-financing – up to PLN 1.5 billion
SUPPORT:
- Support in the form of grants:
- Co-financing in the form of grants up to 50% of eligible costs
- Co-financing in the form of a loan up to 100% of eligible costs, up to PLN 300 million; loan interest rate:
- On preferential terms: WIBOR 3M + margin, but not less than 1.5% per annum
- On market terms (the loan does not constitute public aid)
FINANCED ACTIVITIES:
- Mandatory element: Construction and/or reconstruction of production units with a total installed capacity of at least 10 MW, operating under high-efficiency cogeneration conditions (excluding energy produced in coal-fired cogeneration units), including their connection to the transmission network, in which the following are used for energy production:
- Waste heat
- Renewable energy sources
- Gaseous fuels, gas mixtures, synthetic gas or biogas
- Optional elements if the investment involves heat:
- Connection to the public heating network or construction/expansion/modernization thereof.
- Heat storage: A prerequisite for support is that it is integrated with heat storage.
APPLICATION DEADLINE: Planned: 12/2024 – Q5/2025
ELIGIBILITY CRITERIA:
- Eligible projects: Construction/reconstruction/conversion/adaptation (including modernization) into multi-fuel combustion installations based on solid fuels (excluding hard coal) with an installed capacity exceeding 50 MW.
5. Energy-intensive industry – RES
EU FUNDS: Modernisation Fund
ORGANISER: National Fund for Environmental Protection and Water Management
ALLOCATIONS: PLN 100 million
APPLICANTS: Entrepreneurs with legal title to installations covered by the greenhouse gas emission allowance trading scheme
FORM OF SUPPORT:
- In the form of a bonus (loan forgiveness) – up to 30% of the loan amount paid out on preferential terms (the maximum bonus intensity depends on the type and purpose of the supported installation)
- Co-financing in the form of a loan – up to 100% of eligible costs, from PLN 5 million to PLN 300 million
- Preferential terms: WIBOR 3M, not higher than 1.5% per annum
- On market terms with energy storage, or connection to the plant and/or distribution/transmission network (the above list does not constitute public aid)
FINANCED ACTIVITIES:
- Construction or reconstruction of electricity generation units from renewable energy sources with energy storage, or connecting them to the plant and/or distribution/transmission network
APPLICATION DEADLINE: 23 October 2023 – 20 December 2024 or until the allocation of funds is exhausted
ELIGIBILITY CRITERIA:
- The condition for granting support for energy storage is its integration with an energy source that will be implemented in parallel as part of the investment
- Financing under co-financing that is at least as high as when produced is used for own purposes
- Only new equipment manufactured no earlier than 48 months prior to installation may be part of the investment
6. Energy for rural areas
EU FUNDS: Modernisation Fund
ORGANISER: National Fund for Environmental Protection and Water Management
APPLICANTS:
- Energy cooperatives or their members
- Emerging energy cooperatives
- Farmers
ALLOCATION: PLN 3 billion, including:
- For non-repayable forms of co-financing — up to PLN 2 billion
- For biogas plants and hydroelectric power plants up to 65% of eligible costs
- For energy storage up to 20% of eligible costs
- For repayable forms of co-financing — up to 100% of eligible costs, up to PLN 25 million; loan interest rate:
- On preferential terms: WIBOR 3M + 50 bp, not less than 1.5% per annum
- On market terms (the loan does not constitute public aid)
FINANCED ACTIVITIES:
- In the case of investments carried out by a farmer, construction of renewable energy installations with an electrical capacity of over 50 kW, not exceeding 1 MW:
- Photovoltaic installations
- Wind installations
- In the case of investments carried out by a farmer, construction of renewable energy installations with an electrical capacity of over 10 kW, not exceeding 1 MW:
- Hydroelectric power plants
- Installations for the production of energy from agricultural biogas in high-efficiency cogeneration with an electrical capacity of more than 10 kW and not exceeding 1 MW and a thermal capacity of more than 30 kW and not exceeding 3 MW
- In the case of investments carried out by an energy cooperative, construction of renewable energy installations with an electrical capacity of over 10 kW, not exceeding 10 MW:
- Photovoltaic installations
- Wind installations
- Hydroelectric power plants
- Installations for the production of energy from biogas or agricultural biogas in high-efficiency cogeneration with an electrical capacity of over 10 kW and not exceeding 10 MW and a thermal capacity of over 30 kW and not exceeding 30 MW
- Construction of an energy storage facility, provided that it is integrated with the energy source implemented as part of the investment
APPLICATION DEADLINE: The turn of 2024/2025
ELIGIBILITY CRITERIA:
- Photovoltaic and wind energy investments on agricultural land classified as class I-IV agricultural land are excluded from co-financing.
- The maximum percentage share of energy storage costs in the eligible costs of the energy source is 50%.
- The investment may not be commenced before the date of submission of the application for co-financing.
