Czech renewables power support for 2017 cleared by European Commission

23-11-2016

The long wait appears to have ended with the European Commission finally giving the clearance for Czech renewables power support.

Photo: European CommissionPhoto: European Commission The support has long been a cause for dispute between the Ministry of Industry and Trade which is responsible for paying the support, and the Czech Energy Regulatory Office (ERÚ), which has been threatening to block it as illegal aid.

At stake was 40 billion crowns due to be paid to renewable energy producers, overwhelming those in the solar power sector, for next year. Companies, many who took out loans to cover the costs of their installations, threatened that they would go to the wall if the cash was not forthcoming or blocked for a considerable length of time.

The clearance was publicized by the ministry on Wednesday. One condition from Brussels appears to be that the support be paid out by the energy regulator, though that should not be a barrier in itself. The regulator has said it will wait for official notification from the European Commission before it starts taking steps that would result in the payments being made.

Last year a similar stand- off occurred between the ministry and regulator. That was only solved when the then deputy head of the regulator profited from the temporary absence of chairwoman Alena Vitásková and pushed through the payments. He was later sacked for his pains.

Vitásková has long maintained that aspects of Czech support for renewables are dubious and open to question under EU fair competition rules. The Czech framework for support for renewables offered extremely attractive incentives in the form of a guaranteed long term return from facilities. The mechanism was not easily altered meaning that solar power producers were offered a bonanza situation when their costs, essentially solar power panels mostly produced in China, sharply dropped in price.

The cost of Czech renewables power support rocketed from 1.1 billion crowns in 2006 to stand at 43.51 billion in 2015. The total amount over the period comes to 205 billion crowns. It mostly focused on solar power, with some wind and cogeneration heat and power production thrown in.

23-11-2016