With the end of 2016 approaching, legislators and state clerks are busy taking steps to improve energy regulation in the Czech Republic. The Chamber of Deputies of the Czech Republic is currently discussing an amendment to the Czech Energy Act. This amendment proposed by the Senate of the Czech Republic is short (only three Sections), but crucial for operators of small hydro power plants (10 MW and less). Even though state financial support for the operators of small hydro power plants was approved by the European Commission the incorrect interim provisions in the Energy Act meant that the Czech electricity and gas market operator was unable to provide the financial support to all small hydro power plant operators as was expected. This provision affected as many as 62 power plants, the majority of whose operators were state-owned enterprises managing the waterways of Czech rivers. The amendment not only changes the interim provisions, but also authorizes the Czech electricity and gas market operator to provide sufficient compensation for support not paid in 2016. Although the Government of the Czech Republic agrees that a change in the regulation is necessary, it disapproves of these small individual amendments to such an important act such as the Energy Act and has promised complex changes in energy law, especially in the regulation of renewable energy sources. A quick legislation procedure has been proposed for the adoption of the amendment and therefore, if it is approved, we expect that it will enter in force at the beginning of 2017.
Apart from legislation changes, the European Commission recently approved the support scheme for installations producing renewable energy built in the Czech Republic between 2006 and 2012 under EU State aid rules. The scheme´s total budget amounts to CZK 836,5 billion over its lifetime. The issuance of this approval of the European Commission was a condition for a provision of State aid to the relevant installations of renewable energy sources. We informed you about this issue in our previous article. As a consequence, the Czech Energy Regulatory Office will probably soon issue a new Price Decision / Amendment of Price Decision regarding state support for the newly approved renewable energy power plants. However, this approval may not put an end to the long dispute regarding State aid provided to renewable energy installations as a criminal complaint has been filed regarding State aid illegally provided in 2016. We will inform you about further developments regarding this issue.