Before the government s decision to cut subsidies for renewable energy, the Czech Republic s solar power sector was booming owing to lucrative solar feed-in-tariffs (FiT) and attractive climactic conditions. In ----, CEZ claimed that the installed capacity of the country s solar schemes was the third highest in the EU, reaching -.- gigawatts (GW). ...However, the rate of expansion exceeded government targets and became increasingly unsustainable - particularly as the economic situation in the country worsened. As a result, in January ---- a law was passed to cut subsidies in order to reduce the financial burden on the government and prevent electricity prices from becoming over-inflated and regionally uncompetitive. Furthermore, new solar power capacity had placed stress on the country s transmission and distribution grids. In light of these developments and the lack of government commitment to the continued expansion of the industry, we forecast that solar capacity will grow by a modest -.-- annually between ---- and ----. The solar project pipeline has recently narrowed, with no projects in the planning or construction phase.
...The Czech Republic power market is relatively limited in size due to a lack of domestic consumption and a small population. Coal remains the dominant power industry fuel, contributing to a high level of carbon dioxide emissions. ...Coal remains the dominant power industry fuel, contributing to a high level of carbon dioxide emissions. Concerns over the country s economic competiveness and previous difficulties with setting renewables subsidies at a sustainable level have led the government to scale back - and almost abandon - its pursuit of renewable energy. At present, the country s grid infrastructure seems unable to cope with the stress of new renewables capacity. Despite some progress, power generation and transmission remain dominated by former state companies. Multiple cases of corruption decrease the trust in government institutions and increase risks to the operating environment.
...< ALACRA META ABSTRACT>BMI View: A lack of developments this quarter confirms our expectation that the non-hydropower renewables sector willremain stagnant over the coming decade as investor interest in the market remains subdued. Concerns about the country s economic competiveness and previous difficulties with setting renewables subsidies at a sustainable level have led the government to scale back - and almost abandon - its pursuit of renewable energy. ...
