Contact
Jarosław Kamiński

Attorney at law (Poland)
Associate Partner
Phone: +48 22 244 00 27
E-Mail

Aleksandra Majnusz

Steuerberaterin (Polen)
Senior Associate
Phone: + 48 32 330 12 27
E-Mail

A new act on wind farm investments ("the Act") entered into force on 16 July 2016. It introduces, among other things, requirements for the distance of wind farms from residential buildings or mixed-use buildings with a residential function.

The Act may also affect the taxation of find farms with real property tax.

General remarks

So far, Polish law has never stipulated a minimum distance between residential buildings and wind farms. This Act, however, does. So currently, in the investment process it is necessary to take into consideration the new regulations and requirements brought by the Act.

The unclear and inaccurate provisions on the necessity to obtain decisions permitting wind farm operation and use, as well as the related provisions on criminal liability, have been deleted from the Act. Moreover, the Act does not provide that any repairs or upgrades of technical components of the wind farm must be agreed in advance with the Office of Technical Inspection and that then the investor has to obtain another decision permitting the wind farm operation.

What's covered in the Act

The Act defines the conditions and procedures for locating, building and operating wind farms, as well as the requirements for locating wind farms in the vicinity of existing or planned housing estates. However, the Act does not apply to projects implemented and operated on the marine areas of the Republic of Poland.

Moreover, the Act introduces a definition of a wind farm according to which it is a structure in the meaning of the Construction Act, consisting of at least foundations, a tower and technical components, with power higher than that of a micro installation as defined in the Renewable Energy Sources Act (i.e. higher than 40 kW). Furthermore, according to the Act, the technical components of a wind farm will include a rotor with a set of blades, a drive train, a power generator, control systems and the nacelle with a fastening and yaw system.

Rules for locating wind farms

The location of wind farms must be determined exclusively on the basis of a local spatial development plan ("the local plan").

In accordance with the Act, if you want to locate and build:

  • a wind farm – its distance from residential buildings ormixed-use buildings with a residential function, and
  • a residential building or a mixed-use building with a residentialfunction – its distance from a wind farm

– must be equal or greater than ten times the heightof the wind farm measured from the ground level to the highest point of the structure, including technical components, in particular the rotor with the blades, which is supposed to constitute the total height of the wind farm.

The above distance must be kept also when locating and building a wind farm in the vicinity of protected areas (for instance, national parks, nature reserves or Natura 2000 areas) or in the vicinity of Promotional Forest Complexes.

To measure the distance, you should take into account the shortest distance between:

  • the horizontal projection of the existing residential building or mixed-use building with a residential function, or
  • the boundary of the area covered by the decision on the land development conditions, or
  • the delimiting line of the area whose development specified in the local plan allows a project related to a residential building or an existing mixed-use building with a residential function,

and:

  • a circle with a radius equal to a half of the diameter of the rotor together with the blades, and with the centre being the centre of the circle circumscribed on the outline of the tower of the existing wind farm, or
  • the delimiting line of the area whose development specified in the local plan allows building a wind farm.

Local plans that allow for wind farms should:

  • specify the maximum total height of a wind farm;
  • cover at least the area where new residential buildings or mixed-use buildings with a residential function cannot be located, and the boundaries of which are set in consideration of the maximum total height of the wind farm specified in that plan.

Transitional regulations

The Act provides for a number of transitional regulations applicable both to the wind farms that are already in operation and to pending proceedings concerning their planning and/ or construction. Below you will find an overview of the most important transitional provisions for investors who plan to build or operate wind farms:

>> As regards wind farms which are in operation as of the Act's effective date but fail to meet the distance requirements, it is only permitted to perform a renovation and other actions necessary to ensure proper operation of the wind farm, excluding any actions that increase the performance parameters of the wind farm or its impact on the environment.

>> Wind farm building permitsissued before the Act's effective date and those issued on the basis of building permit procedures initiated and not terminated until the Act's effective date remain in force, provided that the decision on permitting the operation of the wind farm is issued within 3 years of the day whenthe Act becomes effective.

>> Proceedings aimed at ruling on land development conditions for wind farms, initiated and not terminated until the Act's effective date, will be discontinued.

>> Wind farm-related decisions on land development conditions issued before the Act's effective date become void, unless the building permit procedures were initiated before the Act becomes effective.

>> Municipal studies of the conditions and directions of zoning and provincial spatial development plans passed before the Act becomes effective remain in force.

>> The local plans in force as of when the Act becomes effective remain valid.

In addition, despite the fact that the location of the planned wind farm is indicated in the local plan (or its draft presented to the public), the authority in charge of architecture and construction administration may refuse to issue a building permit and the authority conducting proceedings aimed at ruling on environmental conditions may refuse to issue a permit for the project if it fails to meet the distance requirements.

Furthermore, drafts of local plans or their amendments, as well as projects implemented on the basis of those plans, which:

(1) were presented to the public before the Act's effective date – are governed by the old provisions;

(2) were not been presented to the public before the Act's effective date – are governed by the provisions specified in the Act.

Real property tax

Changes in the definition of structures in the meaning of the Construction Act may influence the taxation of wind farms with real property tax. This is because in the (Polish) Local Taxes and Fees Act of 12 January 1991 the taxable objects are, among other things, structures and parts thereof connected with conducting a business activity (Article 2(1)(3)). The basis for the assessment of real property tax is the value of the structure. Thus, for the tax amount it is of fundamental

significance whether the tax base includes only the value of the wind farm construction elements or all the equipment fitted inside.

So far, the construction law defined a structure as (among other things) construction elements of technical equipment – wind farms. Therefore, it was justified to adopt the approach that a wind farm as a whole is a piece of equipment, and only the construction elements of that equipment are a structure. As a consequence, the entire wind farm as a specific building structure could not be a structure under that law. So, the value of neither the equipment used directly for generating electricity nor turbines, nacelles and other pieces of equipment located in the nacelle, was not included in the calculation of real property tax base, and the tax was only charged on the construction elements, that is the foundations and the mast.

The Act introduces a definition of a wind farm according to which it is supposed to be in full a structure in the meaning of the Construction Act, consisting of at least the foundations, a tower and technical components, that is, a rotor with a set of blades, a drive train unit, a power generator, control systems and the nacelle with a fastening and yaw system. The changes are the consequence of:

>> the introduction of the legal definition of a wind farm in Article 2(1) of the Act (a structure in the meaning of the Construction Act, consisting of at least the foundations, a tower and technical components, with power higher than that of a micro installation as defined in Article 2(19) of the Renewable Energy Sources Act of 20 February 2015 (Journal of Laws items 478 and 2365)),

>> an amendment to Article 3(3) of the Construction Act, consisting in deleting the term "wind farm" from the brackets (containing a sample list of pieces of technical equipment),

>> adding "Category XXIX – Wind farms" in the appendix to the Construction Act. It means that from 1 January 2017 the wind farms that are mentioned in the appendix to the Construction Act may be subject to tax calculated on the total value of the wind farm, without the division into construction and non-construction elements.

There are, however, grounds for challenging the possibility to modify the rules for taxation of wind farms with real property tax by means of an act that is neither a tax act nor an act referred to by the tax act. The change of the rules for wind farm taxation is contrary to the case law of administrative courts which in their rulings favour the approach that the tax on wind farms should apply only to their construction parts, and that approach is confirmed by the Constitutional Tribunal (judgement of 13 September 2011, file no. P 33/09).

The new regulations once again cause uncertainty among enterprises. Those which decide to tax the wind farms in whole will have to bear significantly higher costs, whereas those which follow the favourable tax rulings must be prepared for disputes with tax authorities. Although so far the technical equipment itself has never been subject to real property tax, it is hard to predict the outcomes of potential

If you would like to discuss this topic in more detail or if you are interested in a legal advice in Poland, Rödl & Partner experts from Cracow, Gdansk, Gliwice, Poznan, Warsaw or Wroclaw will be glad to help.

11.2016