Room for improvement to increase renewable energy in the Czech Republic

According to findings published at the beginning of 2023, the share of energy produced by solar and wind power plants in the Czech Republic stands at 3.7% of the market. The European average is around 22%.¹ However, given the insufficient state support for solar and wind energy production through larger power plants, the Czech Republic is also lagging far behind in the growth of renewable energy production. Over the last five years, the volume of electricity produced from solar and wind power plants in the Czech Republic has reportedly increased by 13.6%, while the increase in the EU as a whole has been almost 88%. Coal and nuclear power plants are still the main generators of electricity in the Czech Republic.

In addition to insufficient support for production, the problem also lies in the lengthy and complicated permitting procedure for the construction of power plants. Investors often wait ten years or more for the final permit.

The Czech government is fully aware of this problem so it took several measures early last year to simplify the construction of solar and wind power plants. The government will gradually implement these measures into the Czech legal system, the first of them coming into force at the beginning of this year.

 

Increasing the limit on solar power plants that can be installed without a permit

The first measure that should make life easier for small-scale electricity producers is an increase in the limit for photovoltaic power plants that don’t have to apply for a complex electricity license and building permit. From the original 10 kW of installed capacity, the obligation to obtain all necessary permits now applies to plants with a capacity of more than 50 kW. Clearly, this measure won’t satisfy larger producers of solar electricity, but it will certainly widen the circle of "self-producers," especially households and companies that want to move towards energy self-sufficiency.

Unfortunately, this has not eliminated the problem that also hinders the smooth development of small-scale power plants, namely the refusal to connect to the grid those self-producers who would like to sell their surplus electricity.

On the contrary, more frequent and accurate publication of data on transmission and distribution network capacity would help to better determine whether the distributor's refusal is due to genuine technical problems or simply its own economic interest.

 

End of municipal referendums

But of far greater importance to the renewable energy market is another measure that came into force at the beginning of this year. This is the inclusion of wind and solar power plant constructions with a total installed capacity of 1 MW or more among those classified as public infrastructure structures. This change has simplified permits for construction, as investors no longer need to apply for a change to the municipality's zoning plan if they intend to build the plant outside the limits of the municipality’s urban area.

The amendment to the municipal zoning plan, which often includes and affects areas outside the cities’ developed area, has usually served as an excuse for municipalities to call a referendum; but of course the citizens of the municipality concerned have usually opposed the construction of a wind or solar power plant.

Despite these positive changes, other processes, especially for larger EIA power plants, have been retained in the permitting process, so the public and municipalities can comment on the intention to build a power plant in these other procedures.

Although one lengthy and complicated stage of the permitting process has been removed, project preparation and construction of renewable energy sources are still relatively lengthy and costly.

On the other hand, this opens up more space for the construction of larger photovoltaic units, for example in fields or orchards outside the built-up areas of municipalities. Increased interest among investors can be expected in agri-voltaics, where a plant located on a lightweight structure in a field also contributes to crop growth by providing shade or reducing evaporation of water from the soil.

 

Community sharing of renewable energy

Most recently, a draft amendment to the Energy Act – Lex OZE II, which should finally allow community sharing of energy generated from renewable sources, passed the Chamber of Deputies and the Senate in late December and entered into force on 1 January 2024.

The amendment introduces new entities known as energy communities.

Basically, the idea is that this community, which will be a legal entity based on voluntary and open participation, can bring together individuals, small and medium-sized enterprises, municipalities or other self-governing public entities and entities established by them to produce renewable energy and share it among the members.

Sharing of electricity from renewable sources will be possible from 1 July 2024 through the public distribution network, and it will be ensured and coordinated by the Electricity Data Centre. 

Now the draft bill provides that sharing within one energy community will be limited to a maximum of 1,000 consumption points and on the territory of a maximum of three municipalities with extended competence, ie only municipalities whose authorities can also perform state administration in their delegated competence are taken into account. However, these restrictions are only proposed for three years; they must cease to apply in mid-2026 and electricity sharing must then be possible without restrictions.

A further restriction is that no off-take point or generation plant may be involved in more than one sharing group.

It is certainly a step in the right direction and a breakthrough on the current situation. In addition, the system brings economic benefits for those who join it right from the start. The Ministry of the Environment has launched a call for participation in the National Environment Program. This aims to support the establishment of energy communities, which are a prerequisite for the development of community energy. The intake of projects opened on 1 December 2023, with a minimum of 40 projects selected for support in a two-round process. The total allocation of the call is CZK98 million, each subsidy can reach up to CZK3 million.

 

Technology is developing.

But it’s not just legislation that’s undergoing fundamental change. The current technologies make the construction and operation of renewable energy sources more efficient.

Recently, the solar panel market has seen the slow emergence of new systems known as tracker applications, which aim to rotate solar panels from east to west during the day to follow the sun’s movement.

Until now, it used to be the case that plants facing southwards all produced the most energy at peak production times. This naturally leads to surpluses and the investor has to supply the grid with electricity at a negative price. With the development of solar power plants and their support, this problem is amplified. Tracker apps help to better distribute the amount of electricity produced throughout the day.

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¹ Výroba elektřiny z OZE v Česku zaostává – Týdeník Euro (tydenikeuro.cz)