Progressive Czech renewables act passed

An act supporting the production of electricity from renewable energy sources has been passed by Czech parliament this week, and is expected to come into force in around three months time.

Friends of the Earth (FoE) has welcomed the act, which the organisations says establishes the most progressive renewable energy legislation in all of the eight new EU Member States.

The Renewables Act will ensure an 8% share of renewable energy in the Czech Republic’s gross domestic electricity consumption by 2010, a target laid down in the country’s accession treaty with the European Commission.

FoE estimates that the new legislation will lead to the creation of around 4,000 new jobs in fuel and biomass production or maintenance, as well as around 23,000 new jobs in the production of technologies and engineering for the renewables projects.

As a result of the new law, new investment in the Czech economy is expected to exceed €1.5 billion over the next five years. The Renewables Act should also lead to savings of approximately 4 million tonnes of annual carbon dioxide emissions by 2010.

The adopted support scheme will provide a 15-year guarantee of solid feed in tariffs – the major condition that allows financial rentability of the projects and will lead to the actual development of renewables in the Czech Republic.

Producers will also have the option of switching to the so-called “green boni” support system, where a bonus will be paid on top of the market-sold electricity.

However, the act’s success partly depends on how the Energy Regulatory Office sets prices that are not stated directly in the text of the law.

Current ruling states that the pay-back time of installations should be less than 15 years, and another rule dictates that the price for new installations cannot drop less than 95% against the level of those installations that started in the previous year.

“This is a big step forward in the development of renewable energy in the Czech Republic,” head of the FoE Czech energy programme, Petr Holub said.

“Ultimately, the new law is extremely progressive.”

By Jane Kettle

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