Support schemes for renewable energy sources in the Czech Republic Preparing the RED II

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1 Support schemes for renewable energy sources in the Czech Republic Preparing the RED II 1

2 Renewable energy sources in the Czech Republic Non-fossil natural energy sources in the Czech Republic: Hydropower Wind biggest energy potential Solar energy Solid biomass & biogas Geothermal energy Liquid biofuels 2

3 Renewable energy sources in the Czech Republic Other important sources of energy: Biomass combustion, esp. of wood chips; Combustion of other vegetable products of forest and agricultural origin Most of selected plants, usually aimed at heat production, allows quite successfully burning of biomass blended with coal In normal operation combustion of pure biomass 3

4 Renewable energy sources in the Czech Republic Renewables in the natural conditions of the Czech Republic - as a complement to conventional sources: Unpredictability of production from these sources, risk of overloading the capacity of transmission and distribution networks; Resources still insufficiently competitive in the market environment, costly support affects contributions of end consumers of electricity from RES 4

5 RES support schemes in the Czech Republic Development and structure of primary energy sources (PES) PES Unit Hard coal PJ , Brown coal PJ Natural gas PJ Oil and oil products PJ Nuclear fuel PJ Electricity (balance) PJ Other fuels PJ RES and secondary sources PJ Total PJ , Of which RES % Source: Ministry of Industry and Trade, State Energy Policy of the Czech Republic

6 RES support schemes in the Czech Republic Development and structure of RES in relation to primary energy sources Renewable and secondary energy sources Unit Biomass PJ Biogas PJ Biodegradable fraction of SMW PJ Biodegradable fraction of IW and ATF PJ Biofuels PJ Hydro power plants PJ Wind power plants PJ Photovoltaic plants PJ Geothermal energy PJ Heat pumps PJ SMW solid municipal waste Solar collectors PJ IW industrial waste Total PJ ATF alternative fuels Source: Ministry of Industry and Trade, State Energy Policy of the Czech Republic

7 RES support schemes in the Czech Republic Czech support scheme of renewable energy sources: Operational support feed-in tariffs; green bonuses - For solar energy, hydro power, wind power, biomass, biogas and geothermal energy Investment support subsidy programs financed from the state budget; operational programs financed by the EU structural funds Fiscal measures exemption, reduction or refund of taxes 7

8 RES support schemes in the Czech Republic Operational support: Legally anchored in Act No. 165/2012 Coll. on supported energy sources (implemented the Directives 2001/77/EC and 2009/28/EC on the promotion of electricity from renewable sources) Feed-in tariffs: The price at which the producer is entitled, regardless of the actual amount of the market price; For the lifetime of the given types of power plants, the 15-year return on investment is guaranteed to producers; For the lifetime of resource increased by 2 % with regard to the industrial producer price index (with the exception of plants using biogas, biomass and bioliquids); Paid by the mandatory dealer designated by the state or the MIT 8

9 RES support schemes in the Czech Republic Operational support (continued): Green bonuses: Paid by the market operator to the electricity producers; Paid for the producer s own consumption or As the "contribution" to the market price at which manufacturers sell the energy produced; Allow the producers to consume electricity produced for own consumption Two modes of Green bonus regime for new plants commissioned in 2013: Yearlong mode for plants commissioned before 2013 and RES with installed capacity up to 100 kw; Hourly mode for all new plants put into operation after 1 st January 2013 with installed capacity more than 100 kw 9

10 RES support schemes in the Czech Republic Investment support: Support for energy production from RES as well as for building of installations producing energy from RES Subsidy programs financed from the state budget: Green Savings; EFEKT Program Operational programs financed by the EU structural funds: Operational Program Enterprise and Innovation for Competitiveness; Operational Program for Environment; State Program of Rural Development; Integrated Regional Program 10

11 RES support schemes in the Czech Republic Exemptions from income tax; Tax depreciations; Fiscal measures: Exemptions from taxes on electricity (the guarantees of origin of electricity from renewable sources are used); Exemptions from property tax 11

12 RES support schemes in the Czech Republic Czech NAP for RES In accordance with State Energy Policy of the Czech Republic and the Act No. 165/2012 Coll. on supported energy sources (performs regulatory functions of operational support of energy from RES). According to the Commission Decision No. 2009/548/EC setting the model for national action plans for the energy from RES and the targets to reach in 2020: Targets for the EU: 20 % share of energy from RES; 10 % share of energy from RES in transport Targets for the Czech Republic: minimum 13 % share of energy from RES; At least 10 % share of energy from RES in transport 12

13 RES support schemes in the Czech Republic Czech NAP for RES (continued) Targets of the 3 rd Czech NAP (2015): 15.3 % share of energy from RES in gross final energy consumption; 10 % share of energy from RES in gross final energy consumption in transport 13

14 Preparing for a new RED II for the period after 2020 Energy Union Framework Strategy: Long-term, secure, sustainable and competitive energy system in the EU; Europe should also be a leader in renewable energy; Continuing to increase the share of renewables in the EU The current renewable energy directive (RED): all Member States will contribute to reaching by 2020: 20% share of renewable energy at EU-level in gross final energy consumption; 10% of the final energy consumption in transport 14

15 Preparing for a new RED II for the period after 2020 European Council October 2014 increasing the share of renewables to at least 27% European Commission announcement of a new renewable energy package for the period after 2020: New renewable energy directive (REDII) for the period ; Updated EU bioenergy sustainability policy 15

16 RED II public consultation Public consultation on the REDII (November February 2016): gathering information on the position of individual EU MS and other stakeholders to form a new regulatory framework for the promotion of RES; finding appropriate tools for achieving the EU's binding target for RES of 27% in 2030 A total of 30 questions in five areas: General approach; Empowering consumers; Decarbonizing the heating and cooling sector; Adapting the market design and removing barriers; Enhancing renewable energy use in the transport sector 16

17 Czech Republic s stand on the RED and REDII Current RED - successful, but its application had some negative effects: higher prices for end customers; devalued investments in a range of existing production sources The RED II should secure legal certainty to national support schemes in the period National plans should rather focus on the framework until 2030, not 2050 Taking into account various conditions of MS (geographic, economic, etc.) Each Member State should choose its own renewable energy mix according to national circumstances Flexibility in meeting the RES targets The CR supports enabling the development of RES and strengthening the transmission and interconnection capacities Cross-border RES projects - still be based on a voluntary approach by individual countries 17

18 Czech Republic s stand on the RED and REDII RES support schemes in MS - progressive convergence at European level rather than harmonization The need to shift support to RES to the heating and cooling sector because of the sharp drop in prices of electricity and due to the high proportion of heat in total energy production A major obstacle to decarbonization in this sector - the high cost of switching from coal to RES 18

19 Czech Republic s stand on the RED and REDII Adjustment of the EU ETS system: Providing long-term decarbonization signals; Incentives to build RES on a commercial basis; Authorization and approval procedures - harmonization at EU level Using energy from RES in the transport sector: Evaluate the impacts of biofuels made from food biomass on the environment; Greater efforts in the commercial deployment of biofuels from non-food biomass; Enhancing the competitiveness of biofuels to conventional fuels - still poses a challenge 19

20 Thank you for attention 20