Czech renewable energy groups lobby EC over lack of FIT payment uncertainty

Representatives from Czech’s leading renewable energy groups are meeting with representatives from the EC to lobby for help in stabilizing the country’s renewable energy industry, after the Energy Regulatory Office refused to issue an obligatory pricing decision for 2016 regarding FIT remuneration. They believe that without action, the industry faces "extinction."

The regulator has claimed the support scheme has not yet undergone the European Commission’s notification procedure. This, however, has been disputed in a statement released by the Alliance for Energy Self-Sufficiency and the Czech Photovoltaic Industry Association.

"This is … an invalid argument," they stated. "Last year, the European Commission assessed the new Czech Renewables Support Act of 2012 and found that the support scheme established by it contributes to meeting EU energy targets without inappropriately violating the competition rules of the Single Market.

"The Renewables Support Act replaces earlier legislation regulating renewable energy support (Act No. 180/2005 Coll.), which in accordance with European law introduced support for renewable energy in the Czech Republic in the form of feed-in tariffs and green bonuses."

Frank Schulthe, MD of Germany-based Voltaic Network GmbH, which operates 1.4 MW of PV systems in the Czech Republic, told pv magazine that since 2014, the promotion of renewables has been in revision with the EC. It should determine whether or not, from an EU perspective, remuneration constitutes illegal state aid. Until this is clarified, the regulator has said it will not pay any more tariffs.

"According to the current situation, no more [FITs] will be paid out as of January," he said. Having personally spoken with the relevant person at the EC in October, he believes it is very unlikely the revision process will be completed by next year. "A decision on the legality of the support scheme for renewable energy is planned in the course of 2016," he said.

However, Schulthe also does not believe that the Czech government will actually suspend payments until mid-2016, or later, since it would not only impact the renewable sector, but also the investment security in all sectors. This is despite the fact he has been fighting against the government since 2013, together with other investors, over retroactive solar taxes.

If it does suspend payments, legal action could first be taken in February. He expects that if this is the case, most projects would reach insolvency within three to six months.

Mostly solar affected

Around 25,000 renewable energy projects, up to 22,000, or around 2 GW of which are solar, are affected by the move. They were grid connected between 2006 and 2012. "If a solution is not found by early January, there is a very real chance that the Czech Republic will be hit with a spate of lawsuits and international arbitration claims," continued the statement.

As was reported last week, if the installations do not receive remuneration, generated electricity would have to be sold on the wholesale market. Retail electricity prices currently stand at around €0.30/kWh. The majority of the Czech Republic’s PV arrays were installed far higher prices than those of today.

Checkered solar past

The Czech Republic has a particularly checkered solar past, following a boom where it became one of the most attractive solar PV markets under a very generous FIT scheme, which saw a high level of PV investment flood into the country in 2009.

This "unexpected" development led the government to slash support for PV systems above 30 kW in 2010, introduce a 26% retroactive solar tax, and halt the interconnection of all new plants to the grid. In 2013, it then ended the FIT program and extended the tax. Since then, the country has fallen off the solar stage.