Czech electricity grid operator seeks to brake solar power boom

11-02-2010

The Czech Republic is experiencing a boom in solar powered electricity. But while that might seem like a good and eco-friendly phenomenon, not everyone is happy. The company running the national electricity grid has called for a freeze on new solar parks being connected to the grid with warnings being voiced about the huge costs of stampede into solar.

The Czech Republic does not have that much sun. But it has something else that is more important for companies rushing to develop new solar power production in the country. Local state subsidies for the power are the most generous in Europe and around twice as much, for example, as in neighbouring Germany.

Photo: European CommissionPhoto: European Commission The generous subsidy system was calculated to guarantee a return on investments in 15 years. But the costs of solar panels have almost halved over the last year or so with the prospect of returns much earlier.

That has helped spark a stampede into solar power. The rush has been so great that the state run company operating the Czech Republic’s high voltage grid, ČEPS, announced on Wednesday that it had called on local electricity distribution companies not to authorise any new connections of solar or wind power to their grids. That step basically amounts to a ban on projects that have not got underway.

ČEPS fears that its grid could not withstand the surges in demand created by such fluctuating power production sources and blackouts would result. Miroslav Vrba is in charge of managing electricity flows in the grid and describes the problems posed by solar and wind power capacity.

“At the moment we have installed in our system 600 MW. It is not a danger, the current state is okay. But newcomers are asking for connections and announce and assume thousands and thousands of new MW and that is not acceptable because of reliability issues. From the distribution companies we have the figure of 3,500 MW from the newcomers and that cannot be allowed.”

As well as the threat of overload, ČEPS says there is also a cost issue of the solar subsidies themselves and the issue of what to do with huge amounts of solar generated electricity in the summer when overall demand is usually weaker and when it cannot be stored. Some countries are actually working on systems to pay solar and wind operators not to produce power at such times and it could be an option in the Czech Republic as well.

“The big issue is how to compensate this non generation or reduced capacity. Again, who will pay for additional capacities that are not needed. So it is something like how to subsidise an unwanted baby or something,” said Mr Vrba.

There is speculation that the current solar subsidies could eventually cost around 500 billion crowns ― that is around half the size of the current annual national state budget. The caretaker government has already proposed a change in the current solar subsidy regime allowing bigger cuts in the prices paid for electricity. But that change could only take effect next year and the threat has helped spark the current rush to get projects going to benefit from the more generous regime.

The Czech association representing around 60 companies involved in the solar sector challenges ČEPS’ assumptions. It says it is taking advice on whether to legally challenge its virtual ban and attack it in court for spreading false and alarming information.

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