The Czech Republic is a presidential-signature away from eliminating subsidies for decentralized, clean renewable energy production following the Senate Friday approving a bill that instead directs support to centralized power production at plants burning fossil fuels.
The Czech upper house of parliament, or Senate, voted 56 in favor with only one opposing a bill to eliminate subsidies for new photovoltaic power plants while quickly winding down support for other types of renewable power production.
The law was designed to clamp down on abuse of the generous subsidies by firms with unidentified owners, following media speculation that politicians have also benefited. Subsidies have helped the Czech Republic become one of Europe's biggest solar nations but have also ratcheted up electricity prices for consumers and businesses.
The bill's approval signals that the central European country--where manufacturing and industry are key sectors of the economy--is breaking from the European mainstream which supports renewable energy. The new bill looks to favor major power producers, such as 70% state-owned CEZ AS (BAACEZ.PR), which primarily produces electricity at large, centralized power plants.
The new law sets a ceiling of 495 crowns ($25.27) per megawatt-hour on the price consumers will pay as part of their electricity bill, down from a current 583 crowns per MWh. Due to this measure, the overall costs of feed-in tariffs will remain the same, but the state will increase its share of the total by 4 billion crowns from 11.7 billion in 2013, according to a government estimate.
Sources: Reuters, Wall Street Journal