Czech Republic Passes Feed-in Tariff Law

Joining the ranks of other European nations, The Czech Republic’s Parliament adopted a new feed-in law for renewable energy that will provide a 15-year guarantee for renewable energy projects. With some amendments and clarifications, the predominantly European policy approach for supporting renewable energy is likely to usher in a new phase of renewable energy development in the Czech Republic, particularly with wind power and solar photovoltaics.

European renewable energy trade associations, including the European Renewable Energies Federation (EREF), the World Wind Energy Association (WWEA), Eufores, Eurosolar and Nova Energie have all welcomed the move strongly but admit that further amendments will be necessary to strengthen and implement the policy platform. The groups were particularly pleased by the 15-year feed-in tariff, however, they point out that the specifics of the tariff have not been defined concretely which makes it difficult at the moment to plan or even finance any renewable energy projects. The feed-in tariff according to the law will have to be defined annually by the energy regulator. The first major step will be for the government to decide their financial commitment to the tariff. Spain, France Denmark and Germany all have successful feed-in laws that have helped put Europe in the lead for renewable energy use throughout the world. “In the wind pioneer country Denmark, as in several other parts of the world, an intelligent and long-term oriented feed-in tariff scheme was the basic precondition for harvesting the decentralised renewable energy and for creating a new economic key sector, including many new jobs mainly in rural areas,” said the aforementioned trade groups in a recent letter to the Czech Prime Minister. They added that the Czech Republic, with its long-standing tradition and expertise in the machinery and steel sector, has excellent opportunities to take advantage of this new policy. The groups cited a Czech company named Skoda, which they say is already the world’s largest producer of shafts for wind turbines. And there are others issues to be addressed before the policy could truly usher in a new phase of widespread renewable energy developments. The renewable energy associations underline that another very important amendment will be necessary in order to enable independent power producers to participate in the new market for renewable energy electricity: the access to the grid. While the current law guarantees access to the grid to renewable energy electricity in general, there is one clause which may be misused: Access to the grid can be denied in case of a risk for grid stability. The renewable energy associations strongly recommend to amend the law so that the grid operator is obliged to reinforce the grid and that the connection has to be made to the closest grid in geographical terms. The renewable energy associations also point out that under the current circumstances, unfortunately it will still be very difficult for new independent and local power producers to invest in renewable energy projects in the Czech Republic. The associations hope that the Czech government as well as the parliament will do the necessary amendments to let small and medium sized enterprises as well as the local population and the whole country benefit from this important new and clean technology.

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