RES support and electricity market - CZ news 2007 J. Knápek 3.9.2007.

RES support and electricity market - CZ news

2007

J. Knápek

3.9.2007

RES legislation and logic of support

Act 180/2005 on RES-E support – no update

Logic of support remains the same

feed-in tariffs derived from regulated rate of return (WACC=7%)

Changes in „sub legislation„

Notice 150/2007 ERO (on regulation) – support is assured during „technical“ lifetime of technology

Update of ERO notice to Act 180/2005 on technical and economic parameters of RES-technologies

News in RES-E support

Up-date of notice ERO 475/2005

up-date and revision of feed-in tariffs for new plant after 1.1.2008

expected changes

• technical lifetime for PV from changed from 15 to 20 years

• changes in investment cost for the plant – impact of cost curves for individual RES-E technologies (e.g. SH increase)

• changes in assumptions for inputs to biogas stations – current tariffs derived from assumption of exclusive waste processing (intentionally planted biomass – price assumption for 2008 app. 25 EUR/t)

News in RES-E support 2

EU Funds

Program EKOENERGIE – MPO

• Submitted projects app. 12 bil. CZK

• RES-E and energy savings as priorities

Opened question if and how to include investment support into calculations

Changes in macroeconomic environment

tax reform: reduction of income tax from 24% to 15%

income tax exemption for RES-E project (5+1 years) is expected to remain

changes in depreciation scheme

News in RES-E support 3

update of technical and economic parameters based on statistical analysis supported (2004-2006) and prepared projects

e.g. new large SH: Ni=6300 EUR/kW, Tm=5750 hours

MVE do 100 kW - investice

y = 21461x-0,3704

R2 = 0,1116

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

450 000

500 000

0,000 0,020 0,040 0,060 0,080 0,100 0,120

výkon [MW]

měr

né

inve

stic

e [t

is.K

č/kW

]

ni [tis.Kč/kW] Mocninný (ni [tis.Kč/kW])

MVE do 100 kW - využití

y = -245,23x + 3906,8

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

0,000 0,020 0,040 0,060 0,080 0,100 0,120

výkon [MW]

ročn

í vy

uži

tí [

ho

d/r

ok]

T r [hod/rok] Lineární (T r [hod/rok])

Examples of technical and economic parameters

Biogas – existing projects, Tm=7500 hours, Npal=1,2 CZK/kWh

Bioplyn - investice

y = -14914x + 113978R2 = 0,022

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

180 000

0,000 0,500 1,000 1,500

výkon [MW]

měr

né

inve

stic

e [t

is.K

č/kW

]

ni [tis.Kč/kW]

Lineární (ni [tis.Kč/kW])

Bioplyn - palivo

0

0,2

0,4

0,6

0,8

1

1,2

1,4

1,6

1,8

2

0,000 0,200 0,400 0,600 0,800 1,000 1,200 1,400

výkon [MW]

měrn

é p

alivo

vé n

ákla

dy [

Kč/k

Wh

]

npal [Kč/kWh]

Biogas – new projects, Npal=1,5-1,5 CZK/kWh

Examples of technical and economic parameters 2

WindVítr - investice

y = 344,49x + 37551

R2 = 0,0253

0

10 000

20 000

30 000

40 000

50 000

60 000

0,000 5,000 10,000 15,000 20,000

výkon [MW]

měrn

é in

vesti

ce [

tis.K

č/k

W]

ni [tis.Kč/kW]

Lineární (ni [tis.Kč/kW])

Vítr - využití - bez extrémních hodnot

0

500

1 000

1 500

2 000

2 500

3 000

0,000 5,000 10,000 15,000 20,000

výkon [MW]

roč

ní

vy

uži

tí h

od

/ro

k

T m [hod/rok]

PV: boom of projects

expected Ni: app. 135 th. CZK/kW (4,96 th. EUR/kW)

expected Tm: in range 908-980 hours (will be decided)

BiomassBiomass

cannibal effect:

• biofuels

• RES-E, heat

• other

introduction of ecological taxes (coal, electricity, etc.)

general increase of prices (straw, planted biomass)

big projects for co-firing still only moderate progress

Unclear support for SRC plantations

RES-E development

Identification of barriers (non economic barriers seems more important than we expected (regional planning, EIA, environmental protection, etc.)

Wind power and PV projects, biomass slower than expected

0

1000

2000

3000

4000

5000

6000

2000 2001 2002 2003 2004 2005 2010

GW

h

Biogass Wind Biomass Municipal Waste Small Hydro Large Hydro Other

24812772

1874

3181

2768

3135

5720

Electricity market

Electricity exchange in Prague founded in 2007

Auctions of CEZ virtual power block canceled, all electricity traded via exchange

August 27, 2007: end of first trade period – electricity for 2008 and 2009

electricity traded in lots (2008+2009), 2008 with fixed price 50,42 EUR/MWh (ˇ+14% increase), 2009: traded price 57 EUR/MWh

from September 2007 electricity will

be traded for 2008 and 2009 indepen-

dently and without fixation

Average electricity price, base load, year forward

54

43

37

29

32

35

46

5156

20

25

30

35

40

45

50

55

60

2004 2005 2006 2007 2008

EU

R/M

Wh

ČR

Germany

???

+11,4% +15.0% +19,5% +???

Source: ČEZ, 19.4.2007

Electricity generation in CR - future

Majority of coal fired power plants is on the end of life (2012-2015)

Coal limits will not broken – shortage of coal (not all existing capacity will be rebuilt)

Quick continuous increase of domestic electricity consumption (current economic growth 6-7%)