Tension cools as EU approves Czech renewables support

By bne IntelliNews November 28, 2016

The European Commission approved on November 28 the Czech Republic’s support scheme for renewable energy projects. The move should put several years of recurring uncertainty over the state payments to bed and ease tension between the energy regulator and the government.

The EU executive has given the green light to support in the form of feed-in tariffs to renewable energy projects built between 2006 and 2012. The Czech Energy Regulation Office (ERU) has been refusing to approve the funds without Brussels’ approval of the programme. That has had projects on tenterhooks over around CZK40bn (€1.48bn) for this year.

The approval for the payment under a feed-in tariff and green bonuses scheme was flagged last week by the trade and industry ministry, which has been at loggerheads with the ERU, specifically its chief Alena Vitaskova, for some years. The commission has now officially given the green light.

The commission concludes the measure would further EU energy and climate goals without unduly distorting competition. The scheme has a total budget of CZK836.5bn over its lifetime.

“The measure also incorporates a review mechanism which ensures that installations are not over-compensated and aid is limited to the minimum necessary to achieve the scheme's objectives,” the EU executive notes.

Vitaskova and Trade and Industry Minister Jan Mladek have spent several years arguing over support for renewables. A similar situation last year was only ended when a ERU official paid out the 2015 subsidies whilst the chief was on holiday.

The embarrassing bickering is a consequence of a boom in renewables in 2006-10. Driven by an overly-generous state aid scheme, solar power installations mushroomed across the country, hiking the price of electricity for consumers for years to come.

Member states are obliged to notify state aid measures to the commission for approval ahead of implementation, the EU executive’s statement points out. Only after approval can investors rely on the compliance of a measure with EU state aid rules, it insists.

Vitaskova was already deeply involved in battling what she claims was the massive corruption involved in the solar power boom when “the Czech Republic decided to notify the measure in 2014 in order to give investors legal certainty”, as the EU commission puts it.

However, it’s unclear how much of the mess is in fact simply the result of antipathy between Vitaskova on one side and Mladek and the country’s large power players on the other. The ERU chief has led a crusade against older renewables projects developed during the solar boom, but is also facing an eight-year jail sentence handed down earlier this year in a case that found she illegally pushed a pair of projects through to qualify for support before a deadline massively cutting the payments.

 

 

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