How to obtain an electricity trading license – key conditions
At the outset, it should be noted that an electricity trading license (OEE) is, as a rule, required for business activities involving either wholesale or retail trading in electricity (sale of energy to end-users). Obtaining an OEE license is not required for trading in electricity by means of a customer-owned installation with a voltage of less than 1 kV.
The conditions under which a license for electricity trading can be obtained are contained in the Energy Law and the Law on Freedom of Business Activity. In addition, the President of the ERO, in order to facilitate the preparation of the application for an electricity trading license, has developed so-called Information Packages, which contain useful tips on the process of obtaining an electricity trading license conducted by the President of the ERO and the formal conditions to be met when applying for an electricity trading license.
Electricity trading license applicants will find answers to the most common questions in the Information Packages: what conditions must be met to obtain an electricity trading license, and what documents and in what form should be attached to the application for an electricity trading license? In our opinion, the above-mentioned packages are very helpful for applicants and make it easier to gather all the necessary documents for the application for a license to trade in electricity.
The procedure itself for obtaining a license to trade in electricity, is aimed at verifying that the applicant, has adequate financial and material resources, as well as knowledge and experience, necessary to trade in electricity.
The procedure is initiated after the submission of an application for an electricity trading license, which should include information about the planned activity, including a business plan for conducting electricity trading and a description of the entrepreneur’s previous activity. In our experience, in the case of newly established companies, one of the key issues for obtaining a license to trade in electricity is to have sufficient financial resources to operate under a license to trade in electricity. The ERO President verifies each application for an electricity trading license by taking into account the individual financial capacity of the applicant. In our experience, at a low level of available financial resources (less than several hundred thousand zlotys), the ERO President may require additional collateral, e.g. in the form of a bank guarantee or a guarantee provided by a third party to secure potential claims arising from the licensed business. It should also be emphasized that the ERO President, when evaluating the financial capacity of an entity applying for an electricity trading license, takes into account the financial resources that the applicant may actually have at his disposal.This condition will not be fulfilled by, for example, non-binding commitments by third parties to invest, letters of intent or other non-binding declarations of recapitalization of an entity applying for an electricity trading license.
It is also worth noting the form of documents attached to the application for an electricity trading license. Some documents may only be submitted in the original, such as information on the absence of a criminal record from the National Criminal Register issued with respect to the entity applying for an electricity trading license and, separately, members of the board of directors and persons authorized to represent it. If the applicant is a citizen of or based in one of the member states of the European Union, the Swiss Confederation and the member states of the European Free Trade Agreement (EFTA), the information on criminal record should come from the register of the relevant state and be provided with a sworn translation and apostille clause. In addition, the submitted documents must not be older than 3 months from the date of their submission to the ERO.
It is worth noting that conducting business without the required license, according to Article 601 of the Law of May 20, 1971. – Code of Offenses. is punishable by restriction of freedom or a fine.
In our experience, the process of obtaining an electricity trading license takes from 2 to 6 months. It is also worth noting that the electricity trading license itself is only the first step to the actual start of the electricity trading business, so when planning the start date, it is worth taking into account both the time needed to obtain an electricity trading license and the additional time needed to actually start the business – concluding a transmission agreement, gaining access to POLPX, concluding general distribution agreements and many other activities related to access to the electricity market.
