Energy Regulatory Office Co-generated heat and power (CHP): Six power generators will enjoy support as a result of the first co-generation bonus auction in 2025 - News

The President of URE has concluded the co-generation bonus auction addressed to electricity and heat co-generators^[1]. The resulting support will be granted to six businesses who have pledged to generate, export, and sell more than 5.7 TWh of energy from high-performance co-generation units. The value of contracted support is more than 1.37 BPLN.

The co-generation bonus auctions accept bids concerning newly installed or significantly retrofitted co-generation units with a capacity of 1 MW to less than 50 MW. Those bidders win who bid for the lowest co-generation bonus value (which is the subsidy for the electricity sold from high-performance co-generation).

This year’s first auction was held between 24 and 26 March. The bonus pool to disburse exceeded 3 BPLN, with more than 28 TWh of generated energy eligible for the support.

The winning bidders were:

1. CALOR Energetyka Cieplna Sp. z o.o. with the headquarters in Wojkowice (PL);
2. Miejska Energetyka Cieplna Sp. z o.o. with the headquarters in Koszalin (PL);
3. Miejskie Przedsiębiorstwo Energetyki Cieplnej Sp. z o.o. with the headquarters in Brzesko (PL);
4. PGE Energia Ciepła S.A. with the headquarters in Warsaw (PL);
5. Veolia Południe Sp. z o.o. with the headquarters in Tarnowskie Góry (PL);
6. Veolia Północ Sp. z o.o. with the headquarters in Świecie (PL).

The minimum bonus value specified in the winning bids ranged from 219.00 PLN/MWh to 248.80 PLN/MWh. Given that the winning bidders have already received an investment bonus (for the construction of new power generation sources), their minimum payable co-generation bonus will be 197.90 PLN/MWh. The maximum payable will be 248.80 PLN/MWh.

The co-generation bonus is subject to adjustment after the auction, which applies to the winning bidders who will have received an investment subsidy.

The co-generation bonus auction followed the principle of enforced competition^[2], by which a losing bid is the first bid placed which, if accepted, would exceed 80 percent of the electricity volume in all placed bids.

According to the 2025 co-generation bonus auction schedule, the next auction cycle will be between 2 and 13 June 2025.

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• Co-generation is generation of electricity and heat in a single process, in a manner more effective than the generation of electricity separately from heat. A major advantage of co-generation is a much higher usage of primary energy in the fuel. The efficiency of a co-generation unit may reach more than 80 percent, whereas it is very difficult to reach 50 percent for standalone electricity generation in a power plant.
• The co-generation bonus auctions are one of the four schemes of support for electricity and heat co-generation. The other three are (1) individual co-generation bonus enrolment, (2) guaranteed bonus subsidies, and (3) individual guaranteed bonus subsidies.
• The results of the CHP auctions announced in the calls to bid by the President of ERO so far can be found on the official BIP website of the ERO.

^[1] Pursuant to Article 23) of the Polish Act of 14 December 2018 for Promoting Electricity from High-Performance Co-Generation (Dz. U. 2024.639, as amended).
^[2] According to this principle, if the electricity volume from high-performance co-generation or the co-generation bonus value for this electricity volume in the bids placed during an auction cycle does not exceed the maximum volume resp. value stated in the call to bid, the auction winners are those who bid the lowest co-generation bonus value until 80 percent of the electricity in all placed bids is reached.