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Government approves measure decreasing support for existing photovoltaic power plants

Company: Amcham

At a press conference on April 27, 2020, the Minister of Industry and Trade announced that along with a contract with the semi-state-owned ČEZ on building new blocks for the Dukovany nuclear power plant, the government had also approved a bill amending the act on supported resources including a measure decreasing support for existing photovoltaic power plants (FVE).  

Minister of Industry and Trade Karel Havlíček opened the press conference by stating that he considers the government-approved proposal to check the adequacy of the aid received by supported power plants (PZE). These checks are intended to determine whether the support has given a particular group of supported power plants a return on investment (internal rate of return – IRR) considered acceptable by Czech authorities and the European Commission (6.3% to 10.6%). Minister Havlíček specifically stated that individual supported power plants would have a maximum permitted IRR as follows:

In practice this will mean that if the checks determine that photovoltaic plants as a group (classification into groups is still subject to debate) reaches an IRR over 6.3%, one of the “compensation” measures will be imposed in order to limit or halt funds paid to photovoltaic power plant operators in the future. Extremely lucrative projects may even be required to repay support already received. Minister Havlíček also stated that the reason for taking these steps is that the “government considers the photovoltaic ‘boom’ in 2009-2010 as one of the biggest tunneling schemes that has ever taken place in the Czech Republic.” The introduction of this measure is set to save about CZK 10 billion (EUR 360 million) per year on photovoltaic power alone. At this time the bill has not passed through Parliament yet. Considering the proposed impact of these changes we can expect the debate to be heated. We will be happy to discuss any questions you may have.


Source: bpv Braun Partners

Tags: Law |

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