Czech Republic lacks wind power projects despite generous support

The Czech Republic has held its third-ever auction for renewable energy support. So far, the auctions have attracted only lukewarm interest from investors due to a lack of ready-to-build projects. The third auction was not fully subscribed either, despite relatively high support levels guaranteed through contracts for difference.

Renewable energy auctions are getting off to a very slow start in the Czech Republic. This is also evidenced by the results of the third auction, in which investors competed for operating support for wind power plants, small hydropower plants and the modernisation of biogas-fired power plants.

For larger projects, auctions are the only opportunity to obtain operating support. Under European Union rules, operating support for facilities larger than 1 MW (or 6 MW, or six wind power units) must be awarded through a competitive selection procedure, i.e. an auction.

A total of 4 bids submitted in the third auction

The Ministry of Industry and Trade received a total of 4 bids in the third auction, all of which met the auction conditions. Three bids were submitted in the wind power plant category, while one bid was submitted in the auction intended for small hydropower plants.

If the facilities successful in the auction are actually built, wind power capacity in the Czech Republic will increase by 24.8 MW. Approximately three-quarters of this capacity has a deadline for commissioning by the end of 2027. The remaining bid, from VTE Maletín, s.r.o., has a commissioning deadline set for the end of 2025.

While applicants for wind power support in the previous auction requested the highest possible reference price (3500 Kč/MWh), only one applicant requested this price in the third auction. The other two were satisfied with slightly lower prices (3230 Kč/MWh and 3440 Kč/MWh, respectively).

The very first bid for support for small hydropower plants was submitted by Povodí Vltavy, the state-owned Vltava River Basin Authority. Povodí Vltavy plans to build a small hydropower plant with a capacity of 1.8 MW and, thanks to its participation in the auction, has been promised 4500 Kč/MWh (approximately 182 EUR/MWh) for every MWh generated. This is substantially higher than the current exchange price of electricity (when compared with the nearest annual contract).

Even after the third round, auctions in the Czech Republic remain substantially undersubscribed. Across the three auction rounds, a total of 120 MW of wind power capacity was offered, while successful bids totalled approximately 45 MW. Only one bid—the one mentioned above—was submitted to the auction for small hydropower plants, with a capacity of 1.8 MW. However, the Ministry of Industry and Trade had offered support for a total of 21 MW.

In all three auction rounds, support was also offered for the modernisation of electricity generation facilities firing biogas. However, the ministry has not yet received a single bid in this category.

Climate plan calls for fivefold increase in Czech wind power by 2030

The current state of the auctions does not yet fully correspond to the Czech government's plans. It recently presented an updated climate and energy plan, under which approximately 1.2 GW of installed wind power capacity is to be built in the Czech Republic by 2030.

„Renewable energy sources combined with nuclear power are the future of Czech energy. However, we need to significantly accelerate the deployment of solar and wind power plants. I am therefore pleased that the climate and energy plan envisages renewables accounting for 30% of gross final consumption by 2030. We want to use 10 GWe of installed solar capacity (currently 2.1 GWe) and 1.5 GWe of wind capacity by 2030 (currently 0.3 GWe). Overall, this will bring us to five times the installed capacity in both solar and wind energy,“ said Minister Hladík when the Czech government approved the climate and energy plan.

According to statistics from the Energy Regulatory Office, there were approximately 340 MW of wind power capacity at the beginning of this year. By the end of 2025, the Ministry of Industry and Trade intends to offer operating support for only 500 MW of installed wind power capacity (in total for facilities supported through both auctions and the green bonus).

Unless projects without operating support also begin to emerge at a similar pace, or the Ministry substantially increases the volume of wind power support in the years after 2025, achieving the 1.5 GW target will be very difficult.