Boston, MA -- (SBWIRE) -- 08/31/2012 -- BMI View: The future of the country's power sector is largely dependent on nuclear and renewables, although gas has a key role to play over the medium-term, as it helps reduce reliance on coal in electricity generation. Solar power use has soared thanks to an over-generous subsidy scheme, which has now been revised in order to deliver more modest but sustainable growth.
Current investment plans suggest that generation will remain more than adequate, comfortably meeting forecast steady growth in domestic demand and providing the basis for continued net power exports to neighbouring countries. Over the longer-term, the country aspires to significantly boost its nuclear power generation. Key trends and recent developments in the Czech electricity market include:
- The government has recently introduced a retroactive 26-28% tax that must be paid to the state by all owners of 30 kilowatt (kW) solar energy plants brought into operation in 2009 and 2010. The legitimacy of the law was questioned by a group of members of the Senate. However, in May 2012 the Czech Constitutional Court ruled in favour of the Government, arguing that it was fully within the Government's rights to act in what was regarded as the public interest in an attempt to limit public costs and to react to the changing circumstances in the solar sector. BMI holds to its forecast for stagnant real GDP growth of 0.1% in the Czech Republic in 2012 following the mildly positive Q112 revision of the seasonally adjusted real GDP figure to -0.7% year-on-year (y-o-y) - from the -1.0% flash estimate. However, we see both upside and downside potential to our outlook depending on the evolution of the aggregate eurozone economy.
- Allowing for system losses (estimated at around 5.7% in 2011, and expected to decrease to 5.4% by 2021, owing to new investment in the grid), power supply should continue to outweigh demand, allowing for continued net exports to neighbouring states. Czech power generation will have reached an estimated 80.03TWh in 2011. BMI is now forecasting an average 0.54% annual increase to 85.28.0TWh by 2021. This quarter we forecast that thermal generation is set to register negative 0.2% average annual growth, with gas gradually displacing both coal and oil. Gas-fired generation is forecast to increase by an average 17% per annum to 2021.
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