H OW TO UNDERMINE IDEAS OF G REEN GROWTH : C ASE OF PHOTOVOLTAIC ELECTRICITY PRODUCTION IN THE C ZECH R EPUBLIC Jan Vávra Department of Regional Management Faculty of Economics University of South Bohemia INPROFORUM 2014, November 6-7, 2014, University of South Bohemia
S TRUCTURE OF PRESENTATION � Concept of green growth � Methods and research questions � Legal framework for PV � PV boom � Problematic consequences www.solarninovinky.cz
C ONCEPT OF GREEN ECONOMY / GROWTH � Reaction to the economic recession � How to kickstart the economy in a more eco-friendly and inclusive way? � Concepts of green growth/economy, Green New Deal � UNEP, OECD, World Bank, EU – specific concept � Different details, but similar goals and main ideas http://www.visionnoblesville.com/pillars/growth/
Fostering economic growth Resource and Decreasing of energy env. pressure efficiency Green Better Lowering management carbon growth of natural dependency resources Lowering Lower env. inequality pollution and decrease poverty Renewable sources of energy
Fostering economic growth Resource and Decreasing of energy env. pressure efficiency Green Better Lowering management carbon growth of natural dependency resources Lowering Lower env. inequality pollution and decrease poverty Renewable sources of energy
M ETHODS AND RESEARCH QUESTIONS � Methods � Desk study research, data analysis and literature review � Primary sources (legislative documents, governmental strategies, reports of the authorities, and articles in media) � Secondary literature (research papers and analyses) � Research questions � What was the legal and financial framework for the support of the solar electricity in the Czech Republic? � How did the production of solar electricity increase? � How were the rules applied? � What are the consequences of the implementation of PV support?
L EGAL FRAMEWROK FOR PV ELECTRICITY � EU 2001/77/EC Directive � On the Promotion of Electricity Produced from Renewable Energy Sources in the Internal Electricity Market � Indicative target of 12 % of gross domestic energy consumption from renewables by 2010 in EU � Czech Republic 180/2005 Act � On Promotion of Use of Renewable Sources � Indicative target of 8 % gross electricity consumption from renewables in 2010 � Guaranteed feed-in tariff or “green bonus” � Focus of this paper is on feed-in tariffs
C ZECH LEGAL FRAMEWORK FOR PV ELECTRICITY (A CT 180/2005) � 15 years period of guaranteed feed-in tariffs to reach 15 year repayment period for the producers of energy from renewable sources � Energy Regulatory Office is allowed to lower the feed- in tariffs only for 5 % annualy � High feed-in tarrifs for PV power stations to reflect the investment cost � 15 565 CZK in 2006, wind turbines 2 965 CZK, small hydro power stations 2 831 CZK � Fall of investment costs of PV in 2007–2009 � Approx. for 40 % (BDO Audit, 2012)
PV BOOM IN THE C ZECH R EPUBLIC Installed output 25 000 20 000 15 000 MWh 10 000 5 000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Coal Natural gas Nuclear Hydroelectric Wind Solar Source: ERÚ (2014).
PV BOOM IN THE C ZECH R EPUBLIC � In 2009 Energy Regulatory Office warned Parliament and Government about the solar boom � No changes of legislation � New legislation in 2010 � Feed-in tariffs lower by more than 5 % for the power stations with repayment period shorter than 11 years � Feed-in tariffs only for the small on-roof (or wall) power stations (≤ 30 kWh) � New 26 % tax on electricity produced by solar power stations (constructed in 2009–2010) for period 2011– 2013, except small on-roof (wall) power stations (≤ 30kWh)
C ZECH AND G ERMAN FEED - IN TARIFFS Czech Republic Germany 600 500 400 Euro/MWh 300 200 100 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Note: Mean of various feed-in tariffs. Source: Bundesverband Solarwirtschaft (2008), Fulton & Mellquist (2008), ERÚ (2013).
C ZECH RENEWABLE ELECTRICITY Electricity production from renewables 10 000 000 9 000 000 8 000 000 7 000 000 6 000 000 MWh 5 000 000 4 000 000 3 000 000 2 000 000 1 000 000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Hydroelectricity Wind Biological Solar Source: ERÚ (2014).
P ROBLEMATIC ECONOMIC CONSEQUENCES � Costs for government, industry and households � Legal actions again the state due to the retroactivity of legislation � Low cost-efficiency of the climate change mitigation Abatement costs of greenhouse gases through renewable sources of energy 500 450 400 350 €/tonne of CO2-eq 300 250 200 150 100 50 0 Solar Geothermal Biogas Biomass Wind Water Source: Radziwill (2012).
P ROBLEMATIC SOCIO - POLITICAL CONSEQUENCES � Criminal context of the PV industry � Prosecution, lobbyism , problematic role of some Energy Regulatory Office employees, unclear ownership of PV stations � Loss of trust � Business-government � Public-Government � Public-Business � Discrediting of renewables and ideas of green growth � From both parts of political arena (left-right) � Former Minster of Industry Martin Kuba, president Miloš Zeman, etc.
T HANK YOU FOR YOUR ATTENTION . Jan Vávra Department of Regional Management Faculty of Economics University of South Bohemia jvavra@ef.jcu.cz
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