Draft implementing legislation has been published in the e-library of forthcoming legislation for government action. Namely, the following drafts have been published:

Draft Decree amending the Decree on the details of licensing for business in the energy sectors

On 16 February 2022, the comment procedure was opened on the amendment to the Decree, which includes, among other things, the form for the authorization to act as an intermediary. However, the amendment reminds that according to the substantive plan of the new Energy Act (which is to replace the existing Act No. 458/2000 Coll.), only those who have a licence granted by the Energy Regulatory Office will be able to carry out the activity of an intermediary. The current solution, which requires ‘only’ a licence to act as an intermediary in the energy sector, should therefore be seen as only transitional.

In addition, the draft amendment to the Decree also includes:

• unification of the legal status for all license applicants, whereby a business plan containing a description of the long-term financing capacity of the licensed activity and a financial balance sheet containing the expected costs and revenues of the licensed activity will be submitted by all license applicants without exception,
• a procedure for demonstrating the ability to financially secure the licensed applicant’s business (in particular, bank statements and confirmation from the lender’s bank for the preceding 12 calendar months),
• clarification of the regulation concerning the definition of the defined territory in the application for a licence and the documents to be attached to the application for the licensed activity of electricity distribution, gas distribution or heat distribution.

The expected date of entry into force of the amendment is 1 July 2022.

The current text of the Decree with the proposed amendments is available here: https://apps.odok.cz/attachment/-/down/KORNCBPH2YC7

Draft Government Regulation on the definition of the development of supported energy sources for electricity, heat and biomethane production plants put into operation or upgraded from 1 January 2022 and for transitional transformation support for heat in thermal energy supply systems

The draft Government Regulation sets out the types of support and forms of support that are used for support and the types of supported resources, the size of the electrical installed capacity of electricity generating plants, the thermal installed capacity of heat generating plants and the energy output of biomethane generating plants to be supported in 2022-2024, or for which an auction for support may be announced in a particular calendar year. The Decree also provides for the possibility that if the supported capacity values are not exhausted in a given calendar year, they may be carried over to the following period.

Under the proposal, the following generating plants using supported energy sources, among others, are to be supported in 2022-2024:

• new wind power plants (30 MWe in 2022, 60 MWe in 2023 and 90 MWe in 2024),
• new and upgraded hydropower plants of up to 10 MWe (2 to 5 MWe of capacity will be supported annually),
• upgraded plants using landfill gas – only below 1 MWe, with support for upgrades of plants with a total capacity of 0.16 MWe in 2022 and 0.46 MWe in 2024. Support for 2023 is not yet foreseen in the proposal,
• New and upgraded natural gas-fired CHP plants with a capacity (up to/over 1 MWe) – an installed capacity of 25-1000 MWe is to be supported, depending on the form of support.

For all of the above mentioned plants, it is also possible to draw support in relation to only one source, not for the whole plant. For the sources listed below, support can only be granted for the whole production site:

• retrofitted biomass plants – only in 2022 for plants below 1 MWe with only 1 MWe supported in 2022,
• upgraded biogas power plants up to/over 1 MWe – 5 MWe in 2022-2024.

Despite initial information, the government’s proposal so far does not foresee support for new or upgraded PV plants, neither in the form of a green bonus nor through auctions, which was met with considerable criticism during the comment procedure, but it cannot be ruled out that this will be changed.

The amount of the financial security in the case of auctions depends on the individual sources of the supported resources and there are significant differences (e.g. a financial security of 750.000 CZK/MWh is proposed for mine gas, while for CHP plants only 300.000 CZK/MWh, while – as the ERO itself noted in the comment procedure – mine gas will not be a significantly more expensive installation than CHP).

The proposal also foresees support for heat production from new sources in the form of a green bonus, as well as maintenance support for, inter alia, existing heat plants using either biomass only or a combination of renewable and non-renewable sources.

The Regulation also proposes that heat generators from non-renewable sources should receive a transformation support, which should amount to CZK 500/allowance in 2021-2024 (i.e. also retroactively for 2021). The total expected amount for this support varies, with the Ministry of Finance (“MoF”) claiming that it should be up to approximately CZK 8 billion/year, which has been heavily criticised by both the MoF and the ERO.

It can be expected that some of the parameters in the Decree will be further changed on the basis of the comments submitted.

The draft can be viewed here: https://apps.odok.cz/attachment/-/down/KORNCASKTW2S

Draft Decree on the determination of types and parameters of supported renewable sources and criteria for sustainability and greenhouse gas savings for bioliquids and biomass fuels

The draft decree from the MIT sets out the types and parameters of supported renewable sources and the methods of use of supported renewable sources. The decree also sets out sustainability and greenhouse gas emission saving criteria for bioliquids and biomass fuels.

The Decree also establishes the scope of documents and records to be kept on the fuel used in the production of energy from supported renewable sources and the method of production of this fuel, and the share of biodegradable and non-biodegradable part of unsorted municipal waste in the energy content of municipal waste.

The proposal can be viewed here: https://apps.odok.cz/attachment/-/down/KORNC9RL49US.

The settlement of comments on the draft decree has not yet been published. Some changes in content can therefore be expected.

Draft Decree on technical-economic parameters for the determination of reference purchase prices and green bonuses and for the implementation of certain other provisions of the Act on Supported Energy Sources (Decree on technical-economic parameters)

Draft Decree on technical-economic parameters for setting reference purchase prices and green bonuses for supported sources. The draft Decree provides, inter alia

• technical-economic parameters for setting reference purchase prices and green bonuses for each type of supported sources for electricity, heat and biomethane production,
• the discount rate and the lifetime of electricity, heat and biomethane plants,
• the lifetime of upgraded electricity generation plants,
• the range and total amount of specific operating costs for determining the maintenance support for electricity and the maintenance support for heat; and
• the heat pricing method for determining the maintenance heat support.

One of the most significant changes is the reduction of the lifetime of small hydropower plants from 30 to 20 years.

Furthermore, the draft Decree sets the discount rate for determining the reference purchase price and the green bonus for each type of supported sources for electricity, heat and biomethane production at 6.12% after tax.

The Decree is to be applied to plants put into operation by 31 December 2021, to which the maintenance support for electricity or the maintenance support for heat applies, and to plants which have been upgraded since 1 January 2022.

The proposal in its entirety after incorporation of comments can be viewed here: https://apps.odok.cz/attachment/-/down/ALBSCB9JNNBX.