Up to 90 MW of wind power may receive operating support in Czechia. Ministry tightens conditions

The Ministry of Industry and Trade has announced another round of auctions for operating support for selected renewable energy sources. In this year's first auction round, the ministry has amended the conditions for participation – successful applicants will face additional administrative requirements. The ministry has set stricter conditions for wind power plants. Moreover, the ministry may cancel an auction if more than 80% of bids submitted to the auction state the same bid price. 

Another round of auctions for operating support for renewable electricity sources has begun in the Czech Republic. Following a lengthy period during which new power plants were not eligible for operating support, support for selected sources was reintroduced in 2022.

As in the previous year, support has been announced this year for biogas plants, small hydropower plants and wind power plants. By far the largest volume of installed capacity has been announced for wind power plants, which may receive operating support for up to 90 MWe of installed capacity. This is an increase of exactly one-half year on year – last year, the Ministry of Industry and Trade could announce support for only 60 MWe.

In further individual auctions, support can be obtained for up to 5 MWe of modernised electricity-generating plants using biogas and 7 MWe of new or modernised small hydropower plants. Operating support also remains unavailable for photovoltaic power plants.

Auctions for support for renewable electricity sources have so far not been particularly successful. In the very first auction round, no bids were submitted. Only the second auction, launched in 2022, was successful – the auctions attracted their first two applicants.

The first auction that could be described as nominally successful, at least for some wind power plants, took place at the end of last year. Bids totalling 44 MW were submitted to this auction, and it was fully subscribed for the first time. Ultimately, projects with a combined capacity of approximately 25 MW were successful.

Ministry tightens conditions for wind power plants

Compared with last year, the Ministry of Industry and Trade has decided to tighten the conditions that each wind power plant must meet in order even to be assessed as successful.

Newly, every wind power plant participating in an auction must have concluded a grid connection agreement or a future grid connection agreement. It must also demonstrate that the construction of the power plant complies with the applicable zoning plan or other spatial planning documentation.

Compliance with spatial planning documentation is a frequent issue in the case of wind power plants. If a municipality did not want wind power plants within its territory, its zoning plan did not permit their location. In such cases, it was not possible to issue either zoning or construction permits for a wind power plant. This is also why many developers establish various forms of cooperation with municipalities to motivate them not to obstruct the construction of wind power plants.

Successful auction participants will also face new obligations – after obtaining support, they will be required to inform the Ministry of Industry and Trade annually about progress towards commissioning the electricity-generating plant.

Will more applicants submit bids at the same price? The ministry will be able to cancel the auction

Compared with previous auctions, the Ministry of Industry and Trade has expanded the circumstances in which it may cancel an auction that has already been announced. One such circumstance is when more than 80% of bids submitted to the auction state the same level of requested support. Another is where it is proven that applicants for support cooperated and agreed on the requested support prices.

This already happened in the second auction announced for 2022. Only two bids were submitted, with both requesting the maximum level of offered support – CZK 3,500/MWh.