Czech ministry launches programs to support biomass and alternative sources

The Ministry of Industry and Trade launched calls this week focused on transforming Czech district heating and combined heat and power generation. Auctions and grant programs are intended to help companies modernize existing plants and encourage them to make greater use of natural gas and renewable energy sources such as biomass. The support amounts to hundreds of millions of crowns, and most supported projects are expected to be completed between 2028 and 2030. 

The Ministry of Industry and Trade published the terms of the auction, which covers a total of 13.12 MWe of installed electrical capacity, just before the end of last year. Its main aim is to support combined heat and power generation at plants with an installed capacity of more than 1 MW that use natural gas, biomass, biogas or mine gas.

The call does not apply to waste-burning plants. Applicants with natural gas plants must also demonstrate that their projects are technically and economically capable of replacing natural gas and operating on renewable or low-carbon gases by 2050.

More forms of support are available this year

The support therefore gives operators of local or industrial heating plants an opportunity to modernize their facilities. These plants still rely largely on coal, production of which is expected to be significantly reduced in the Czech Republic by 2030. The auction sets the deadline for commissioning a subsidized plant or completing its modernization at the end of 2029. Successful applicants will therefore have around 5 years to complete their projects, with most expected to start receiving support in the form of a green bonus between 2028 and 2030.

Support for smaller electricity-generating plants with a capacity of up to 1 MW, biomass heat plants and ongoing support for biomass heat will be provided in the form of an administratively set green bonus. Support for these sources is due to start as early as 2025.

In addition to the auction mentioned above, the Ministry of Industry and Trade also announced a call at the end of last year, funded by European funds, to support energy production from biomass, with an allocation of 500 million crowns. The call is primarily intended to help companies increase the efficient use of renewable energy from biomass and reduce primary energy consumption. It is open to both small and medium-sized enterprises and large companies.

Biomass and biogas use has stagnated in recent years, but the outlook is positive

The announced support shows that biomass and biogas continue to have a role in the Czech energy sector. According to data from the Energy Regulatory Office, at the end of 2023 there were 78 biomass-burning plants in the Czech Republic, with a total capacity exceeding 2200 MW, and 418 biogas plants with an installed capacity of 333 MW.

Although development in both areas has largely stagnated in recent years, and installed capacity and the number of plants have even declined in the case of biomass, the new calls indicate that the state still sees potential in these sources. Installed biomass capacity is expected to grow through the end of the decade. Support for biogas is gradually coming to an end, but a shift to biomethane offers one way to support further development.

Biomass accounts for around 3 % of electricity generation in the Czech Republic. Since 2020, annual output has consistently remained above 2.2 TWh, at a similar level to generation from hydropower plants. However, these fuels play a significant role in heat production, accounting for around 20 % of total output in 2023. As coal use continues to decline, their share of the fuel mix is expected to keep growing.