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04/12/2016

Czech support for renewable energy in uncertain situation

Energy

Czech support for renewable energy in uncertain situation

Czech Technical University's Solar Decathlon.

[Czech Technical University/Flickr]

In the Czech Republic, renewable energy producers may lose their feed-in tariffs for 2017. EurActiv Czech Republic reports.

These days, it seems one can only talk about the “feed-in tariffs for renewable sources of energy” and “notification process” in a nervous whisper, or with anger, in the Czech Republic.

For months, politicians, industry and renewable energy investors have been waiting for a decision by the European Commission on the compliance of Czech support schemes for most of the renewable sources with European state aid rules.

According to rumours in Prague, the decision might be expected this week.

History repeats itself

There are several types of feed-in tariffs in the Czech Republic set for various kinds of energy sources installed in different periods, based on legislative acts dating back to 2005. Except for sources put into operation after January 1st 2013, the support schemes have not been notified at the Commission until this year.

There have been legal disputes over whether notification for the support for older power plants is actually needed. The Czech ministry responsible for energy policy nevertheless asked the Commission’s DG Competition for the approval. Originally, officials anticipated that the assessment could be done by April this year.

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At the end of summer, two minor schemes for new small hydropower plants and heat from new biogas stations have been approved. But – besides others – the largest group of renewables put into operation between 2006 and 2012 are still waiting for the decision.

According to some legal opinions, this does not necessarily need to be a problem.

But the renewable energy industry fears that at the end of year, the national energy regulatory office will delay its decision on the allocation of support to electricity and heat from renewable sources to be calculated for 2017.

Such a situation already occurred last winter, when the office hesitated over the allocation of support designated for 2016. The regulator said it would not pay out the feed-in tariff to most of the renewable power plants until the European Commission approved it.

Solely on a legal basis

Alena Vitásková, the regulatory office’s chairwoman, says she does and will deal with all issues connected with the renewable energy support solely in strict compliance with both Czech and European law.

Between 2009 and 2010, a “solar boom” occurred in the Czech Republic because of a steep decline in the price of photovoltaic panels, resulting in a smooth fulfilment of the renewable energy target for 2020 (13 percent) but also into higher priced electricity for final consumers. Since then, renewables have not had the most popular image in the country. That is why every decision concerning the sector is politically sensitive.

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Moreover, Vitásková is currently facing a potential 8.5-year prison sentence for alleged assistance with fraud concerning solar power plant operating licenses. Therefore, she is regarded as being careful to keep everything legal.

Instead, Vitásková accuses the Czech Minister of Industry and Trade Jan Mládek (ČSSD) for not delivering on his promises that he will successfully finish the notification process with the European Commission as soon as possible.

On the other hand, Mládek complains about the regulatory office not providing important data and information needed for the negotiations.

Busy Christmas

The clash between Vitásková and Mládek – both of them unsuccessful runners in a recent Senate election – is being closely monitored by stakeholders.

Solar industry representatives call for continuity of the support and stability in the sector, which they claim to be facing a hostile environment in the Czech Republic. They say the energy sector depends on long-term investment cycles, especially in emerging markets such as renewable energy. Altogether, there are 28 thousands of solar power plants in the Czech Republic, most of them small.

But even the Czech confederation of industry, which used to be one of the loudest critics of the burden put by the renewable energy producers on the final consumers, has voiced concerns over the uncertain situation. Industry fears that with this development, the investment environment in the country is deteriorating.

They also know that without the European Commission and regulators’ decisions, it will be a busy Christmas again this year.