Czech Republic: High-efficiency co-generation of electricity supported by the European Commission
7 March 2017 saw an important step for ecologically friendly solutions in the Czech Republic’s power industry of the Czech Republic. This was the date on which the European Commission approved the Czech support scheme for electricity generation from high-efficiency combined heat and power plants commissioned in the period from January 2016 to December 2020. The overall budget of the support scheme for the co-generation of electricity is €420 million (CZK 11.3 billion).
Operators of combined heat and power plants will receive a fixed surcharge on top of the market price of electricity. The amount of this surcharge will change every year in relation to the main costs so that the expenses of the state remain at a minimum. The overall budget of CZK 11.3 billion is financed partly by the surcharge collected from electricity consumers and partly by state budget contributions.
The European Commission has declared that the electricity generation from high-efficiency combined heat and power plants helps to increase energy efficiency, reduce CO2 emissions and leads to higher levels of environmental protection. This measure is also in compliance with EU energy and climate goals and does not infringe competition.
The “Brussels notification procedure” for combined heat and power sources commissioned between 2013 and 2015 has not yet been completed. On the other hand, however, the Czech Energy Regulatory Office (ERO) announced its support this year of combined heat and power sources put into operation by the end of 2012. The ERO chairwoman Alena Vitásková stated that this represented 95% of the combined heat and power sources in the Czech Republic. According to her, there is an agreement that the Czech Republic will not notify Brussels of these sources.
The Czech Prime Minister Bohuslav Sobotka also expressed his satisfaction with the completion of this, according to his words, very technically complicated notification procedure. Another positive piece of news is that the notification group is very close to completing the notification procedure regarding the support scheme for combined heat and power sources commissioned in the period between 2013 and 2015, which has become a high priority for the Czech Ministry of Industry and Trade.
This is not the only measure towards better environmental solutions. The European Commission recently also adopted several other Czech ecology-oriented support schemes in the power industry, in particular to support renewable power generation, hydroelectric power installations and small biogas installations.
Update from May 5, 2017
Following the approval of the support scheme for electricity generation from high-efficiency combined heat and power plants commissioned in the period from January 2016 to December 2020 by the European Commission, the Czech Energy Regulatory Office issued a Price Decision No. 2/2017 on 29 March 2017 amending Price Decision No. 5/2016. Therefore, effective from 1 April 2017 state aid of up to 420 million Czech korunas can be distributed among operators of high-efficiency combined heat and power plants commissioned after 1 January 2016. The “green bonus” is set uniformly for all plants. However, it cannot be provided (i) if various state aid for the operation of plants is to be concurrently paid to the same operation or (ii) during periods of negative prices for the electricity if these last longer than six hours or (iii) for waste incineration.