Environment Ministry: Czechia undergoing major transformation thanks to the Modernisation Fund

By 2030, Czechia will have nearly CZK 500 billion available through the Modernisation Fund. Most of the funding is flowing into renewable energy projects.

The Czech Republic is an eligible member state with the right to draw funding from the Modernisation Fund. The fund was established through an amendment to the EU ETS Directive, and its resources are intended to support the energy transition in EU countries with lower GDP.

As CEEnergy News reported, Czechia has been highly successful in drawing funds from the Fund. It was one of the first countries to implement the Modernisation Fund and was the first to begin drawing from it.

According to the Czech Ministry of the Environment, the country has undergone a significant transformation over the past two years thanks to the Modernisation Fund. The funding has primarily been used to support the growth of renewable energy sources.

Hundreds of projects have been submitted to the Ministry, with applications totalling more than CZK 185 billion. Now, following the reform of the European emissions trading system (EU ETS), the fund will also be extended to other areas and will increase to as much as CZK 500 billion by 2030.

The Ministry said the largest number of approved projects concerns the construction of solar power plants. Since 2022, nearly 2,000 megawatts (MW) of installed solar capacity have been supported, saving 1.6 million tonnes of CO2 annually.

These 2 GW of installed capacity, Environment Minister Petr Hladík stressed, correspond to the annual energy consumption of approximately 750,000 households. The minister said that large-scale construction of new solar power plants is taking place primarily in coal regions.

"A good example of the responsible approach taken by municipalities is the village of Kačice in the Central Bohemian Region, where they decided to install photovoltaic systems, including battery storage, on the municipal office building and a care home. As a result, they consume 31 megawatt-hours (MWh) less electricity annually, which could translate into annual savings of around CZK 124,000," explained Petr Valdman, director of the State Environmental Fund of the Czech Republic, which provides the full administration of the Modernisation Fund.

Funding from the Modernisation Fund is allocated annually. Applications are currently being accepted under five open calls: two are intended for the construction of solar power plants, two focus on technologies that improve energy efficiency and reduce emissions in the EU ETS, and the final one is open for the modernisation of district heating plants.