By Sean Carney WSJ.COM 9/13/13
Support for the European Union’s climate and energy policy eroded further Friday as the Czech Republic became the latest member to denounce subsidies for clean but costly renewable energy and pledged to double down on its use of fossil fuels.
It followed Poland’s declaration that it would use its abundant domestic coal supplies for power generation rather than invest in costly renewable energy facilities. Spain abolished subsidies for photovoltaic power generation in July and the U.K.’s power markets regulator last month froze solar power subsidies for the rest of the year.
The Czech Senate voted overwhelmingly in favor of a bill to eliminate subsidies for new photovoltaic power plants while quickly winding down support for other types of renewable power production. The bill has already been approved by the lower house of parliament and now only needs President Milos Zeman’s signature to become law.
Manufacturing and industry are key economic sectors in central Europe and the Czech decision marks the region’s divergence from the European mainstream, which supports subsidizing renewable energy.
Opposition to further subsidies is a major hurdle for EU lawmakers who this month are launching talks on the bloc’s 2030 climate change agenda. It hopes to wring firm commitments to reduce carbon emissions by the end of December.
The Czech Republic has seen a surge in renewable power production over the last four years due to rich cash payouts for investors in the sector. Since then public outrage over fast-rising power prices has forced politicians to put the brakes on subsidies. The payouts have been a drag on the economy, creating uncertainty on energy markets and preventing utilities from investing.
“To maintain the country’s [international] competitiveness we had to act,” said Senate Vice-chair Alena Gajduskova after the vote.
The bill also directs state and taxpayer support to centralized power production, a step directly at odds with EU goals.
“Small-scale renewable energy generation is a cornerstone of the future energy policy,” the EU Parliament’s industrial committee said in a statement Thursday.
The European Commission, the bloc’s executive arm, is tight lipped on the situation.
Marlene Holzner, spokeswoman for Energy Commissioner Gunther Oettinger, said that “the Commission believes that reforms to support schemes for renewables are needed,” and that the EC is closely monitoring the situation.
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