Mediafax (Mediafax)
Finance  |  September 01, 2010 15:36:07

The price of electricity would not rise next year


Mediafax

PRAGUE (MEDIAFAX) - Electricity prices would not have to rise next year due to excessive promotion of renewable sources, especially solar power. The Government in its Wednesday's meeting decided that the problem will be actively addressed.

The specific measures the government has proposed a voucher that must be done a number of meetings with entrepreneurs and other stakeholders in order to avoid the risk of state arbitration and litigation.

"The government has in this area is very limited options, but nezastíráme that we want to expand these opportunities," said Prime Minister Petr Necas (ODS).

The cabinet wants to gradually handle more extensive system solution, which has more character does not intend to publish.

Next year there is a significant increase in electricity prices, because the network is connected to a large number of photovoltaic power plants, which have a guaranteed purchase price of energy. Distributor of this energy must buy and the price for it rozpočítávají to individual customers.

However, the law until recently did not allow for greater annual reduction in purchase price of electricity by more than five percent, though the acquisition and operating costs of solar panels significantly decreased. The total output of photovoltaic power plants over the past five years has grown about několikasetnásobně. In addition to increasing electricity prices and traffic congestion threatens the network.

"This is not a market failure, but a meaningless legislative mistake," summed up the problem Necas. Act in 2005, the government of Vladimir Spidla (CSSD), and the reduction of the maximum purchase price incorporated into the law for members of the CSSD and the Communists.

Legislation changed the government of Jan Fischer, but contracts that were concluded before nonbeing force of law, the new legislation does not apply.

George Taborsky, taborsky@mediafax.cz

Adding editorial: The government is now trying to find a way to avoid price shock, or at least mitigate its impact on the most sensitive consumers. The situation, however, in our opinion, very complicated and there is no elegant solution. He speaks, for example, that the government would significantly increase the single tax on land on which solar power is even increased environmental tax on gas, coal and electricity (which is, in our opinion a very bad solution).One option is to negotiate with the operators of solar power plants with a voluntary reduction in prices for electricity. This option is impassable by us first, because there are thousands of these operators, partly because it would be a change in business conditions for the ex-post, which will almost certainly encounter stiff resistance
investors. CEZ has already announced that unexpectedly strong solar boom is likely to reduce this year's profit by 1-2 billion CZK (which will be offset later in 2012).

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