The recent amendment to the Act on Supported Energy Sources, known as Lex RES III, will significantly affect many solar power (PV) plant operators and the operating aid they receive for producing electricity from renewable energy sources (RES).
Which PV plants are affected by the amendment?
The amendment targets PV plants that were commissioned between 1 January 2009 and 31 December 2010, with a total installed capacity of 30 kW or more (controlled PV plants).
Which PV operators are affected?
Those who operate controlled PV plants.
What is the highest internal rate of return allowed for an investment in a controlled PV plant over its lifetime and what if it is exceeded?
8.4%
If this rate is exceeded, the operating aid for electricity production from RES for the specific controlled PV plant may be reduced or terminated in the future.
How will compliance be monitored?
Controlled PV plant operators must annually verify whether their entitlement to operating aid for the following year remains valid and at what level, or if it ceases.
The verification results must be:
(i) reported to the market operator (including any reduction in the amount of the aid for the following year); and
(ii) the market operator will then forward this information to the State Energy Inspection Authority.
If the controlled PV plant operator fails to report the verification results to the market operator or comment in any way, it will lose its right to operating aid for the following year.
What form should the report to the market operator take?
There will be a form, the template of which will be specified by a decree.
When must the report be submitted to the market operator?
Annually by 15 December.
What are the penalties for false information in the report to the market operator?
Up to CZK 50,000,000.
The amendment will affect:
- existing controlled PV plant operators;
- investors considering acquiring a controlled PV plant (due diligence will need to include verification of potential overcompensation and how to address it in the transaction);
- banks financing the controlled PV plant operators (especially if their entitlement to operating aid ceases or is reduced in the future); and
- sellers who have sold controlled PV plants and guaranteed a certain amount of future operating aid for electricity production from RES.
If you want to know whether and how the amendment affects your business, or how long the entitlement of your controlled PV plant to operating aid for electricity production from RES lasts, feel free to contact our specialised energy law team with any questions.
Key contacts at HAVEL & PARTNERS:
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