Poland eyes changes to renewable support plan

An outside view shows RWE AG headquarters in Essen March 26, 2002.

WARSAW (Reuters) - Coal-reliant Poland aims to increase support for biogas and solar generation through the end of the decade while cutting support for investment in wind and other renewable generation, a government official said on Tuesday.

Deputy Economy Minister Mieczyslaw Kasprzak said a new draft bill calls for Poland to increase the share of renewables in Poland's energy mix to 15.5 percent by 2020, up from less than 10 percent in 2010.

"Our goal is to simplify, optimize and improve the support mechanism for renewables," Kasprzak told Reuters in a recent interview.

Currently Poland - which is also seeking to build the European nation's first nuclear power plant - generates more than 90 percent of its electricity from coal.

The former Soviet-bloc nation must also meet tough EU standards calling for countries to produce a certain amount of power through renewables by 2020.

Kasprzak said the government's current plan sees annual spending on renewables to rise to some 8 billion zlotys ($2.46 billion)in 2020 from 3 billion in 2012.

Under the proposal, the state would cut support for biomass, old hydropower plants and on-shore wind farms to divert investment to solar energy, biogas plants, offshore wind generation and small hydropower units, Kasprzak added.

The proposed bill, however, has raised concern that reductions in support for wind farms will halt growth and scare off potential investors -- something the deputy economy minister said should not happen.

"We are not afraid the changes will slow down the development of wind energy in Poland," Kasprzak said. "Investors are very eager to invest in this segment, because the costs of windfarm construction are constantly falling."

He added that in the coming years some 500 megawatts MW of windpower could be built in addition to the 2000 MW installed in Poland already, mainly onshore.

RWE, Germany's biggest utility, said on Monday it would build windfarms in Poland with a combined capacity of 300 MW for 500 million euros by the end of 2015, with 50 million to be spent this year.

(Reporting by Maciej Onoszko; editing by Michael Kahn and Keiron Henderson)