Visit windpowermonthlyevents.com for the latest on our upcoming conferences and webcasts

Market Status: Czech Republic - Solar boom jeopardises the future of wind power

CZECH REPUBLIC: The Czech Republic added 43.75MW of wind capacity in 2009, taking its total to 192MW, and is unlikely to add more than 38MW in 2010.

According to industry experts, the Czech wind energy sector is facing a number of threats that could explain the low projected growth for the coming year and seriously curtail development in the longer term.

One of the biggest immediate concerns is the booming expansion of the country's solar market. Photovoltaic installations in 2009 amounted to 400MW, nearly ten times that of wind. Some expect the solar total to have reached 1.5-2GW by the end of 2010, an explosion national wind energy association CSVE predicts could block connection of wind projects to the grid and force many to be abandoned.

Perhaps even more worrying are the potential consequences of a plan being considered to halt the solar boom. The Czech government wants to abolish the current 5% limit on the annual reduction to feed-in tariffs (FITs) enforceable by the regulatory office in a move that could take effect in 2011. Instead, a price cut of 25% could be imposed on renewables projects whose economic payback time is less than 11 years. Although the measure is aimed at slowing the growth of solar, a similar cut in tariffs for wind could result in the "total liquidation" of the Czech wind industry, the CSVE warns.

Meanwhile, the backdrop to all of this is a low level of political support for wind energy in the Czech Republic. In a report last November on the country's fulfilment of its target under the EU renewables directive, the Czech industry ministry described wind plants as "being more a source of problems than a competitive source of energy".

Negative perception

Without government backing, many authorities are wary of supporting wind projects, creating a negative attitude towards wind that acts as a barrier to new development, says energy company Cez. According to Cez spokesman Martin Schreier, other problems include widely held beliefs about the claimed negative impact of wind turbines on bird life and on television and radio signal reception, as well as on tourism and property prices.

Certainly, growth has been slow in recent years, climbing 34MW to 150MW in 2008, then up to 192MW last year. Of the 38MW expected in 2010, the largest project is likely to be Windenergie's Jindrichovice-Stara 9.2MW wind farm. Further ahead, the Czech wind fleet could reach 250MW by the end of 2011, with some larger projects in the pipeline for completion in 2012.

The future level of the FIT for wind energy will be key to the sector's growth. Wind power generators can choose between two support mechanisms: a fixed FIT or a green premium system. The feed-in tariff rate for 2010 has been set at CZK 2,230/MWh (EUR86/MWh), down 4.7% on 2009. If it is cut by another 5% next year, most projects will have problems with economic feasibility, says CSVE.

And although the green premium looks attractive, it too has its drawbacks. The premium is calculated as the FIT minus CZK 400 (EUR15) - therefore CZK 1,830/MWh (EUR70/MWh) in 2010 - added to the relevant wholesale market price for power, calculated as CZK 1,710 (EUR66) for 2010. The total payable thus comes to CZK 3,540/MWh (EUR136/MWh) - a great price, says CSVE, were it not for the fact that the green premium requires wind operators to accurately predict their output, something that is not feasible for small operators. Not only this, but banks prefer the certainty of a fixed FIT, CSVE adds.

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Only [DAYS_LEFT] days Subscribe Now

Left of your Windpower Monthly free trial

Your free trial Subscribe Now

to Windpower Monthly has expired

Windpower Monthly Events

Search more than 4,500 companies in the Windpower Directory

Latest Jobs