Climate change and local action 19. – 22. 9., Bratislava, Slovakia

Climate change and local action19. – 22. 9., Bratislava, Slovakia

Lessons learned on promotion of solar energy use in Czech Republic

Martin Karasreferent - specialist

Development of photovoltaic in Czech Republic

• very quick progress of FV in Czech Republic, Germany, Spain, Greece, Italy, France, USA, Japan

• State Environemental fund of the Czech Republic granted from 2000 to 2004 – 600 FV projects (90 % cofinancing)„Sun to schools“

• 2004 – Ministry of Industry and Trade and Ministry of Environment – government bill of subsidy of renewable energy sources

• Parliament discussed mainly the issue of wind energy, photovoltaic was not the main topic


• 2005 – parliament accepted and passed the law for subsidy (promotion) of renewable energy sources decrease of feed-in-tariffs was restricted at 5 %(similar value in Germany)

• 2006 - Energy Regulatory Office declare the feed-in-tariffs for PV at price 0,47 € / kWh (CZK/EUR - 28,40) without differencing to any power output and location of the systems

purchase time of energy from FV was set for 15 years(other RES 20 years, small water plant 30 years)


• the feed-in-tarrifs increase lead to „solar boom“

• 2007 – were put into operation first 4 photovoltaic power plants each with installed capacity at least 0,5 MWp(largest PV plants in Central and Eastern Eurupe at the time)

• Ministry of Industry and Trade predicted that total power capacity of photovoltaics will be 10 MWp in 2010


The main reasons for such huge development in this sector:

• very high feed-in-tariff (0,47 € / kWh (CZK/EUR - 28,40))with possible increase 2 – 4 % per year due to inflation

• guarantee of the prices for 15 (later 20) years

• duty of energetic companies to buy-out energy from renewable energy sources

• producer´s guarantees of lifetime period of the PV panelsup to 30 years

• time of the economic return on investments 7 years or less

Source: www.solarplaza.com


• 2008 – german´s law for promotion of renewable energy sources was amended (decrease of feed-in-tariff from PV depends on installed capacity in last year)in the years 2009 – 2011 the purchase prices in Germanyfall down about 8 – 11 % per year

• czech legislation did not reflect this change at allEnergy Regulatory Office divided PV plants to 2 categories (to 30 kWp, over 30 kWp), but the buy-out prices differ among them by less than 1 %.

• in other european countries, the feed-in-tariffs are significantly variant at least from 2004(the feed-in-tariffs for small PV systems on the buildings are about half higher than for large plants on the ground)


• 2009 – rapid reduction of cost of PV panels caused by:

• restrictions of the market in Spain

• price pressure from chinese producers

• massive increase in production of solar sillicon

• such increase in production was expected a year later

• in 2009 price drop of the panels in the CZ was overshadowed by weakening of the currency


• 24. 8. 2009 – Ministry of Industry and Trade announced amendment draft of the law for subsidy (promotion)of renewable energy sourcesEnergy Regulatory Office – faster reduction of prices for electricity from PV plants

• 16. 11. 2009 - the government approved a draft amendment,force of the amendment, however, was set in conflict with previous government statements from 1. 1. 2011 (originally from 1. 1. 2010)


• 21. 4. 2010 – senate accepted and passed the amendement about new subsidy (promotion) of renewable energy sources (the amendment allows the Energy Regulatory Office lower purchase prices of electricity for that category of renewable sources, where the return on investement has fallen below 11 years)

• Energy Regulatory Office set for the following year new purchase prices in order to maintain the economic return on 15 years.

• impact has no effect on the installed capacity in 2010, because the amendment entered into force 1. 1. 2011

Development of purchase prices for PV in Czech Republic

Source: www.cz-rea.cz

Feed-in-tariff´s prices and gurantees in CZ (2010)

(CZK / EUR 25,5) *) As regards biogas and biomass, the level of support differs according to the type of fuel

Source: www.eru.cz

Source: www.csve.cz


• 2010 - the purchase prices for producing electricity by using solar radiation in the CZ were still the highest in the EU

• 2010 - the cost of PV systems in the CZ fell down by half due to strengthening currency and falling component´s prices (compared with 2006)

• big players came from Germany, Spain, Great Britain, Netherlands and China.

• reality surpassed all expectationsthe Energy Regulatory Office announced the final value of the installed capacity at the end of 2009 to 463 MWp (plan of Ministry of Industry and Trade for 2010 was originally expected 10 MWp, increased to 185 MWp)

Installed PV capacity in Czech Republic


Installed capacity of renewable energy sources in Czech Republic


Biogas

Photovoltaic

Wind

Water

MW

Cumulative installed PV power in the EU new member states (2010)

Source: www.pv-nms.net

Source: www.pv-nms.net

Source: www.engineerlive.com

Source: www.engineerlive.com

Share of electricity production from RES in CZ

Source: www.eru.cz


• For back-up of the electricity supply from PV and Wind power plants is necessary to operate other stand-by power supplies

• The maximum acceptable installed capacity of PV andwind power plants is in the CZonly around 2 000 MW

• this amount was achieved in late 2010

• for higher installed capacity was no possible to ensure safety and reliability of the grid


• 3. 2. 2010 - system operator of the grid (ČEPS) asked the energy distribution companies (ČEZ, E.ON, PRE) to stop giving permission to grid connection requests for new PV and wind plants

• the distribution companies immediatelly comply the proposal

• but a lot of PV capacity was reserved previously

• Czech system operator of the transmission grid also propose to sustain the construction of new CCGT (combined cycle gas turbine) plants and other sources which are able to deliver to the grid its full power operating maximum in a few minutes (biogas stations)


• CZ has committed the climate-energy package to increase the proportion of energy from renewable energy sources in gross final energy consumption. (for CZ 13 % in 2020)

• This goal should be, according to National Renewable Energy Action Plan (NREAP), newly filled with the support of energy sources that contribute to meeting this target with the lowest possible influence (cost) for consumers.

• 25. 8. 2010 – government approved NREAP(for all categories of renewable energy sources is scheduled the development to year 2020 so as to meet EU target)

• for PV, the total planned installed capacity in 2020 was already filled in 2011 (end of 2010)

Estimation of total contribution (installed capacity, gross electricity generation) expected from PV

in the Czech Republic (NREAP)

Source: www.mpo.cz


• due to enormous increase in the number of PV installations companies and households (final consumers) were threatened by raise of the prices of electricity

• 12. 11. 2010 - senate approved an amendment to the Income Tax lawthe amendment cancel the possibility of immunity of taxation

• 14. 11. 2010 – parliament approved another amendment of the law for subsidy (promotion) of renewable energy sources


For financing purchase prices amendment introduces:

• 3 years extraordinary taxation of photovoltaic power plants installed in 2009 and 2010 at a rate 26 % for purchase price (due to introduction of this retroactive tax, CZ is threatened by wave of arbitrations);(investors many plants moved to abroad - SK)

• gift tax from the price of emission allowances, which will electricity producers receive for free in 2011 and 2012

• four times increase of the fees for removal of piece of land from agricultural ground


Main mistakes of development of PV in CZ:

• unresponsive to the development and legislation changes in neighbouring countries (Germany)

• insufficient possibility of regulation of purchase prices (feed-in-tariffs)

• similarity of purchase prices for all PV installations regardless of location and installed capacity

• the possibility of almost free booking of capacity in the transmission grid for connecting the PV installations


Main mistakes of development of PV in CZ:

• mistaken prediction of growth of installed capacity

• delayed reaction on the situation

• since the begining of renewable energy sources development missed the support of energy sources that contribute to meeting the EU target with the lowest possible influence (cost) for consumers

• total cost of the purchase prices for owners of PV power plants (2000 MWp – 20 years) -> 30 000 000 000 €(CZK/EUR - 24,50)

Electricity production from RES in CZ in 2010

Source: www.eru.cz

Biomass

Biogas Landfill gas

Photovoltaic power Wind power

Water power

Total costs of promotion of RES in Czech Republic – 2010 (billion CZK)

Source: www.mpo.cz

Biom.Biogas

PVWind

Water


Preparation of new law for promotion of energy sources:

• 2001/77/ES and 2003/30/ES -> 2009/28/ES

• RES support only up to limits (settings) planned by NREAP

• preferred sources with lower specific cost €/MWh (small water power plants, biomass, biogas reactors)

• maximum purchase price from any RES - 250 € / MWh

• PV systems only on buildings and only to 30 kWp

• Amendement of waste law – salvage, treatment, disposal, financial responsibility of wastes from PV systems / plants

Documents

Climate change and local action 19. – 22. 9., Bratislava, Slovakia