Case study: Czech experience with RES development
PhDr. Tomáš Vlček, Ph.D.
International Relations and Energy Security
Department of International Relations and European Studies
Our Lord, help this country, and send us a
terrible destructive hailstorm!
CZECH EXPERIENCE WITH RENEWABLES
DEVELOPMENT
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Obligations Resulting from the Membership in International Organizations
Obligation Obligation as Amended by
Reduction in greenhouse gas emissions by 8 % by 2012. Kyoto Protocol
A greater renewable energy share in gross final
consumption, reaching the level of 8 % by 2010 and the
level of 15 % by 2030.
EU Accession Agreement
(Athens, April 16, 2003)
A greater renewable energy share in gross final
consumption, reaching the level of 13 % by 2020.
Directive of the European
Parliament and of the
Council 2009/28/EC
Reaching a renewable energy share of 10 % in all sorts of
transportation displayed on gross final energy consumption
in transportation in the Czech Republic by 2020.
Directive of the European
Parliament and of the
Council 2009/28/EC
Emissions from the sectors not covered by the EU ETS will
not exceed 2005 levels increased by 9 % by 2020.
EU Climate and Energy
Package
Source: T. Vlček from publicly available sources
CZECH EXPERIENCE WITH RENEWABLES DEVELOPMENT
 Act No. 180/2005 Coll. pioneered the term ‘green bonus’, indicating “the
financial amount increasing the market price of electricity that is paid by
the operator of the regional grid system or the operator of the
transmission system to the producer of electricity from renewable
sources, taking account of reduced damage to the environment resulting
from use of a renewable source compared to combustion of fossil fuels,
of the type and size of the production plant and of the quality of
electricity supplied”
 It obliges the operators of the regional distribution systems and the
operators of the transmission system “to purchase all electricity from
renewable sources eligible for promotion and to conclude a supply
contract, if a producer has offered electricity from renewable sources”.
 „Assumption of responsibility for deviation pursuant to special
regulation” is of extreme importance as well, as the responsibility was
put on CEPS for maintaining the stability of the network in the event of
unstable production of electricity from renewables.
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 The system of state promotion of renewables was set so generously that,
for example, the target of 1,695 MWe of installed capacity in photovoltaic
power plants, which the Czech National Renewable Energy Action Plan set
for 2020, has been exceeded already in 2010.
 The cause of this boom lies in a combination of reduction of investment
costs in photovoltaic and wind power plants construction on one hand and
excessively high preferential treatment through state support on the other
hand, which led to a significant development of the renewable sector and
proliferation of companies engaged in installation of domestic and
industrial power plants.
 While in 2005 the purchase price of electricity from photovoltaic power
plants was 6.04 CZK/kWh, the Energy Regulatory Office more than doubled
this value in 2006, to 13.2 CZK/kWh (which is about twelve times the
market price of electricity)
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 An originally well-planned program was supposed to
motivate citizens to accept renewables, to bring them to
trust in their potential and also to increase renewable energy
share in total production and consumption of electricity in
the Czech Republic, in order to accomplish the required
commitments resulting from international agreements.
 In reality, however, the citizens and industry sector identified
the opportunity and prospect of easily obtainable and
guaranteed state money in the course of several years, while
photovoltaic plants, consequently, experienced an incredible
expansion.
 Not even the Energy Regulatory Office was capable to
manage the situation, since the law allowed it to lower a
purchase price of electricity from renewables by maximum 5
% per year.
 It is clear that it was impossible to react on this unexpected and unanticipated
development of photovoltaic (and wind) power plans in a timely manner by
developing the technical base of electrification systém.
 The „Renewable Energy Crisis“ was de facto triggered by the mentioned
discrepancy and it erupted on February 16, 2010, when the companies CEZ
Distribuce, a. s. and E.ON Distribuce, a. s. met the request of CEPS, a. s. and
stopped with the approval of applications for installation of new photovoltaic
and wind power plants into the network.
 The stop of approvals lasted until September 2011, and than again from
January 2012 until the end of the year in Southern Bohemia and Southern
Moravia.
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Tab. 7.8: Installed Capacity of Photovoltaic Power Plants in the Czech Electrification
System
Year 2004 2005 2006 2007 2008 2009 2010 2011 2012
Inst.
capaci
ty
0.13 0.13 0.74 3.4 54 464.4 1,959.10 1,971.0 2,086.0
Note: data always as of December 31. Installed capacity indicated in MWe.
Source: Energetický regulační úřad.
Renewables
Total Expenditures for Photovoltaic and Wind Power Plants in the Czech Electrification
System in the Period 2010 – 2030
Gross Costs In Total 2010 – 2030
(mil. of CZK)
Share of Total
(%)
Direct costs of electricity
purchased in photovoltaic power
plant
509,916 72.6
Direct costs of electricity
purchased in wind power plant
44,836 6.4
Costs of the provision of sufficient
PpS
48,948 7.0
Costs of induced investments 18,035 2.6
Costs of additional regulatory
energy
80,380 11.4
In Total 702,116 100
Source: Zajíček, 2010, p. 66; modified by T. Vlček.
 In November 2010, Amendment No. 330/2010 Coll. and, in
December 2010, Amendment No. 402/2010 Coll. to Act No.
180/2005 Coll., on the promotion of electricity production
from renewable energy sources and amending certain acts,
were passed and entered into force on March 1, 2011.
◦ state would from now on support only those photovoltaic power
plants connected to the distribution network
◦ So called solar farms will be also cut of support, whereas the state
support will go only to the photovoltaic power plants placed on
roofs and buildings with installed capacity of no more than 30 kWp
◦ So called retroactive solar tax of 26-28% was introduced for all
photovoltaic facilities launched in 2009 and 2010
◦ In 2011, a purchase price of electricity from renewables was set on
7.5 CZK/kWh.
 These amendments were understood as a temporary solution
 A new act entered into force on January 1, 2013, as Act No.
165/2012 Coll. on supported energy sources
 The Act was closely tied to Directive 2009/28/EC.
 According to the National Renewable Energy Action Plan, the
connection of renewables into the network will be, from now on,
capped with a yearly deliberate capacity.
 Even though Directive 2009/28/EC understands the levels of the
National Action Plan as minimum, the new Act No. 165/2012 Coll.
understands them as maximum.
 These caps are, according to the National Action Plan, calculated
every year not only for the entire Czech Republic, but for single
regions as well. Should they reach the upper limit, no further
connection approvals would be granted until the following year.
 Support of photovoltaic power plants is recently limited to the
production capacity of less than 30 kWp that is located on the roof
or perimeter wall of one building attached to the ground via firm
foundations registered in the real estate registry.
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 The amendments and the new act contributed to the
stabilization of the renewable sector.
 The price to be paid is, naturally, high. A rough suspension of
the sector and a significant change of terms led to the
bankruptcy of tens of companies trading with photovoltaic
technologies, while the state is financially burdened with
support to decentralized production and renewables for the
next tens of years.
 Renewables were depreciated in the public eyes to a great
measure and the likelihood that the obligation of a 13 %
renewable energy share in gross final energy consumption by
2020 will be accomplished is very low.
 In 2004, production of electricity from renewables reached
the figure of 2.61 TWh and a 3.80 % share in consumption.
 In 2012, production of electricity from renewables amounted
to 8.06 TWh, while the share in consumption was 11.43 %.
 In this relation, it depends on the point of view whether we
really speak of positives figures.
 Why this boom affects the overall price of electricity?
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Share of price components for electricity supply to households in 2010 and 2014
Electricity incl. margin 42,27 % 30 %
Market operator 0,12 % 0,2 %
System services of ČEPS 3,94 % 2 %
Renewables,
cogeneration and
decentralized sources
4,41 % 10 %
Electricity distribution
and transport
31,86 % 40,2 %
Ecological tax 0,72 % 0,6 %
VAT 16,67 % 17 %
Source: Energetický regulační úřad
Price of electricity
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Price of electricity
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The development of contribution to the RES, CHEP and DS for end consumers
Year 2009 2010 2011 2012 2013 2014 2015 2016
Contribution in
CZK per 1 MWh
52,18 166,34 370,00 419,22 583,00 495,00 495,00 495,00
Renewable Energy Policies
 26.7.2013 – approval of the key amendment of the current law on renewable energy
sources
 Content:
 1) capping the contribution to RES at 495 CZK / 1 MWh (positive effect on
competitiveness)
 2) end of support for new sources and distributed generation of electricity (biomass,
bioliquids and biomethane, solar power, biogas stations) from 1. 1. 2014
 Support stopped since 1. 1. 2015 also to installations that had authorization to be
build at the time the act entered into force
 3) end of the aid will not cover high-efficiency combined heat and power production,
secondary sources of energy, and the heat produced from renewable sources
Further amendments: 131/2015 Sb., 107/2016 Sb., 190/2016 Sb., 103/2017 Sb.,
183/2017 Sb.
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Renewable Energy Policies
 In the current centralized arrangement of electricity (and heat production) in the Czech Republic, RES
can never be more than just complementary
 Rearranging of the system would of course lead to changing the potential use of RES
 Renewable energy sources are and will be in the Czech Republic for a long time only supplementak
sources, their development has been artificially and rudely stopped
 It should be rigorously separated the different types of renewable energy sources, because each has
different characteristics in terms of production, distribution, resource base, networking, etc.
 This fact can not be viewed quite negatively
◦ sharply dialectical nature of the current energy sector aims to increase the use of renewable
energy sources
◦ attention should be given to headlessness and irrational support (biomass)
◦ we should target areas where the resource base is almost for free (eg. waste)
◦ we should support and conceptually and rationally develop projects based on geographic and
national specifics of appropriate conditions and those that have future potential
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Renewable Energy Policies