By Ales Spacil

Betting on Nuclear Power

The state energy concept submitted in September 2011 by Minister of Industry and Trade Martin Kocourek is counting on a significant increase in nuclear energy utilization. In the coming 50 years, its share of the energy mix should increase threefold from the current 30% to 80~90%. One scenario is counting on the photovoltaic generation of electricity to cease completely by 2030. Interestingly, according to these plans, the Czech Republic would produce up to double its own electricity consumption.

Solar Tax and the Moratorium

After the so-called solar boom in 2009-2010, when almost 1,900 MWp of output was installed in the Czech Republic due to high state support, mostly in agricultural land, the state has made a U-turn. It taxed the yields from photovoltaic business retroactively with a so-called ‘solar tax’, and in February 2010 distributing companies stopped connecting new photovoltaic and wind installations to the grid (this situation is referred to as the moratorium).

Experts consider both these steps illegal and unsubstantiated: the ‘solar tax’ is retroactive and no factual substantiation has ever been given for the moratorium. The moratorium has been introduced on the basis of concerns voiced by ?EPS, the transmission grid operator, claiming that a high volume of connected renewable sources can threaten the network’s stability. The study that was used as an argument for this appeal, however, has never been available to experts or the public and there is serious suspicion as to its purposefulness. In the meantime, many studies and measurements have been done that have not shown any more significant and uncontrollable risks for the stability of the Czech electricity grid. There are also no economic reasons for maintaining the moratorium. According to experts, in an optimistic scenario the installed output next year will amount to a maximum of 100 MW, which represents an increase in the price of electricity of less than a hundredth of a koruna per kWh. Support for solar energy in the Czech Republic decreased radically between 2010 and 2011, by almost 50%, and was limited to small roof installations up to 30 kWp. Therefore, there is no threat of another solar boom, and investments into photovoltaic installations will continue to be interesting for households and companies rather than for investors.

Yet, for more than 18 months, distribution companies have been maintaining the moratorium for all photovoltaic and wind sources of energy, i.e., also for home installations on the roofs of family houses and companies, and have been ignoring appeals by experts to change the status quo. In recent days, the attitude of PRE, which runs the energy network in Prague, has been revised and the company promised ‘individual considerations’ of newly submitted applications for connection. Whether this means a real end to the moratorium at least in the networks used by this company will be clear in the coming weeks. The results are dramatic--hundreds of companies in the photovoltaic business have gone bankrupt and more than 2,000 people have lost their jobs.

An incomprehensible role in the current situation has been played mostly by the Czech branch of the German distributor E.ON. While the mother company in Germany belongs among the advocates of generating electricity from renewable sources, the Czech E.ON has for a long time been one of the biggest opponents, yet so far it has neither been able nor willing to explain its attitude. Moreover, by refusing to connect any photovoltaic installation in a blanket manner, it is breaching valid legislation that requires it to consider each generating facility individually.

State Intends to Halt Photovoltaics

To a large extent, the future development of the sector will be determined by the new act on promoted energy sources which is implementing the directive of the European Parliament and of the Council no. 2009/28/EC into the Czech legislation and is currently undergoing the approval process. The governmental draft significantly limits support for photovoltaics, only to roof installations up to 30 kWp that have to be connected to the grid. There will be no support for off-grids and photovoltaic installations in agricultural land and gardens or on greenhouses. Year-on-year, the support is moreover limited only up to the installed output limit stipulated in the National Action Plan. The trouble is that this National Action Plan, which the Ministry of Industry and Trade issued already in the summer of 2010, is completely against the spirit of the European directive mentioned above. Instead of determining the strategy for the sector’s long-term development, it is fundamentally limiting. Moreover, these limits in the National Action Plan have already been used up for photovoltaics until 2020. Therefore, even if the current moratorium is successfully lifted, new installations will receive no support.

Today, the government of the Czech Republic is obviously and covertly supporting the oligopoly of large utilities based on the utilization of traditional energy sources, and it does not seem likely that the situation will change dramatically in the next few months. Renewable energy sources still have the potential to increase the independence and self-sufficiency of the population and to decrease the profits of the largest utilities, of which the semi-private ?EZ is an important source of revenue for the state budget. This is not good news for companies doing business in the sector of renewable energy sources. However, we hope that the interest of society and the interests of the citizens will have a higher significance for the Czech government than the interests of large players on the energy market when adopting the draft and that it will support the law in favor of the sector’s development. The question is whether the Czech Republic can continue going against global energy trends in the long run.

JUDr. Ales Spacil is Chairman of the board of the Czech Photovoltaic Industrial Association (CZEPHO) and executive head of Conergy Czech Republic. CZEPHO (www.czepho.cz) unites the sector’s key entrepreneurs, protects their rights and promotes the creation of adequately motivational, stable and transparent conditions to enable the long-term development of the photovoltaic sector in the Czech Republic.

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