The Ministry of Industry and Trade (MPO) reversed and significantly reduced support for renewable energy sources (POZE). As late as Friday, it proposed that the state budget allocate CZK 36 billion to subsidize fees for POZE for next year, but in the end it cut costs to CZK 9.35 billion.
According to Seznam Zpráv sources, the MPO cut the original amount based on the political decisions of the coalition less than three days after it proposed that the state subsidize renewable sources in 2024 as well. budget in the amount of CZK 9.35 billion,” the department states in the submission report published in the eKlep electronic library.
The proposal will be discussed on Wednesday afternoon at the government meeting on next year’s budget. However, due to the state’s efforts to save public finances, the state treasury is no longer counting on the originally requested CZK 36 billion. This likely means that the costs of POZE will be passed back on to households and businesses.
From last October until the end of 2023, POZE customers are still to be subsidized by the state. Previously, the fees were paid by households and companies in electricity prices and amounted to CZK 500 without VAT for each MWh of electricity consumed, which is the maximum amount set by law.
As recently as last year, the state shared the POZE payment with households and companies. The total costs amounted to about 43 billion CZK, of which 18 billion were paid by consumers and the rest was paid by the state. Of this 18 billion, 12 went to households and companies connected at the low voltage level, and the remaining six billion were paid by large companies at high and very high voltage.
Operating support for RES depends on the price of electricity on the market, but at the same time they have a ceiling set by law, thanks to which households do not pay more than just 500 CZK without VAT. Anything above this ceiling was paid by the state, and this amount was approximately CZK 200 for each MWh of electricity consumed. These costs thus correspond to CZK 9.35 billion.
The ceiling on the amount of the fee will not disappear, but someone will have to pay the rest of the amount, which is no longer included in the budget for next year. The state should therefore decide to whom the costs will be transferred next year. If the state does not pay them, only consumers, i.e. households and companies, are left.
In such a case, however, its price would increase by CZK 500 without VAT (CZK 599 with VAT) for each MWh of electricity consumed.
However, the MPO wants to push the government for a solution that will not affect consumers. A more viable option for him is to finance POZE from other sources. If it is not the state budget, according to the department, it could be revenues from emission allowances. Although this option is possible according to the MPO, for example the Ministry of the Environment, which also finances its subsidy programs from emission allowances, considers it unrealistic.
According to him, it is only possible to finance new projects, not existing ones, from the income from emission allowances. For example, solar entrepreneurs also collect POZE for projects that were created around 2010. This support is promised to them for roughly 20 years in advance and guaranteed by law. Therefore, it was not possible to cancel it, as Finance Minister Zbyněk Stanjura (ODS) originally proposed.