At the outset, it should be noted that an electricity trading licence (OEE) is, in principle, required to carry out a business activity involving either wholesale or retail trading in electricity (sale of energy to end-users).
Which activities do not require an electricity trading licence?
Obtaining an electricity trading licence is not required for, e.g.:
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- trading in electricity carried out on a commodity exchange;
- trading performed by a commodity exchange clearing house, the National Depository for Securities (KPDW S.A.), or by a company to which KPDW S.A. has delegated the performance of tasks, pursuant to the Act on Trading in Financial Instruments;
- trading in electricity by designated electricity market operators;
- trading in electricity by a power cooperative.
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How to obtain an electricity trading licence?
The terms and conditions under which an electricity trading licence can be obtained are set out in the Energy Law. In addition, the President of the ERO, in order to facilitate the preparation of the application for an OEE licence, has developed so-called Information Packages which contain:
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- useful guidance on the process of obtaining an electricity trading licence,
- formal conditions to be met when submitting the application, as well as
- answers to the most frequently asked questions: what conditions need to be met in order to obtain an electricity trading licence, and what documents and forms should be attached to an application for an electricity trading licence?
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In our opinion, the above-mentioned packages are very helpful for Applicants and help to gather all the necessary documents for the application for an electricity trading licence.
The procedure itself for obtaining an OEE licence, is to verify that the applicant:
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- has its registered office or place of residence in the territory of an EU Member State, Switzerland, Turkey or an EFTA country,
- has adequate financial and material resources,
- has the technical capacity and will ensure the employment of persons with the necessary qualifications to trade in electricity,
- has obtained a building conditions decision or investment location decision for the construction of a nuclear energy facility, and
- is not in arrears with the payment of taxes.
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Proceedings before the Energy Regulatory Office in the process of obtaining a licence to trade in electricity
The proceedings are initiated after the submission of the application for the licence to trade in electricity, which should contain, e.g:
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- information on the planned activity, including the business plan for trading in electricity, and
- a description of the previous activity of the entrepreneur.
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In our experience, in the case of newly established companies, one of the key issues for obtaining a licence to trade in electricity is to have sufficient financial resources to carry out the licensed activity, as the ERO President verifies each application taking into account the individual financial capabilities of the applicant, as well as the financial resources which the applicant may actually have at his disposal. This condition will not be met by e.g:
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- non-binding commitments of third parties to invest,
- letters of intent, or
- other non-binding declarations of recapitalisation of the applicant entity.
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It is also worth paying attention to the form of documents attached to the application for an electricity trading licence. Some documents may only be submitted in the original, e.g:
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- information on no criminal record from the National Criminal Register issued in relation to the applicant entity, and
- information on clean criminal record separately for members of the management board and persons entitled to representation.
- in the case of an applicant who is a national or established on the territory of one of the Member States of the European Union, the Swiss Confederation and the EFTA Member States, information about a clean criminal record should be taken from the register of the relevant state and be provided, together with a sworn translation and an apostille.
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It is important that the documents submitted are not older than three months from the date of their submission to the ERO.
What are the consequences of operating without an electricity trading licence?
It should be noted that conducting business without the required licence, pursuant to Article 601 § 1 of the Act of 20 May 1971. – Code of Offences, is punishable by a restriction of freedom or a fine.
It should also not be forgotten about the provisions of the Energy Law Act, which, in Article 57g(1), regulates sanctions in the event of conducting business in the field of electricity trading without a licence, providing for a penalty of up to PLN 5.000.000,00 or a restriction of freedom for a period of 6 to 5 years.
How can we assist you in obtaining a licence?
Our Law Firm prepares for its clients the so-called business plan of the licensed business, i.e. a statement of annual, planned revenues and costs for the activity covered by the license application (OEE), for a period of at least three full calendar years, for the application for an electricity trading license (OEE) .
Our lawyers also advise on how to secure financial resources for the business of energy trading, and advise on the development of a statement of planned sales of electricity in units of energy (MWh), which forms part of the OEE application.
Our experience shows that at a low level of available financial resources (less than ten million PLN), the ERO President may require additional security, e.g. in the form of a bank guarantee or a guarantee provided by a third party to secure possible claims arising from the conduct of the licence activity or an increase in the licence applicant’s equity.
In our experience, the process of obtaining an electricity trading licence takes between 2 and 6 months. It is also worth noting that the electricity trading licence itself is only the first step to actually starting an electricity trading business, so when planning the start date it is worth taking both into account:
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- the time required to obtain an electricity trading licence, and
- the additional time required to actually start your business – concluding a transmission contract, gaining access to POLPX, concluding general distribution agreements and many other activities related to access to the electricity market.
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If you are interested in our services with regard to the preparation of an application for a licence to trade in electricity, our lawyers remain at your disposal. Upon clients’ request, we conduct the entire licence proceeding before the President of the ERO, or we prepare only specific parts of the licence application, in particular the so-called business plan of the licensed activity, i.e. a statement of annual, planned revenues and costs for the activity covered by the licence application (OEE), for a period of at least three full calendar years.
If you are interested in our offer, please contact us:
by email to kancelaria@rsplegal.pl
or via the form available at the link below: Contact form
