Study: Support for renewable sources widens budget gap

Prague, Sept 18 (CTK) - Czech state budget deficit would be 14 percent lower next year if the state did not support renewable sources, according to a study drafted by company Next Finance, presented by the firm's representatives at a press conference yesterday.

Support to renewable sources has a very serious impact on the Czech economy as renewables are a heavy burden on family budgets, the state as well as companies.

"A state budget deficit of Kc105bn is planned for the year 2012. If renewable sources did not receive support, the deficit would stand only at Kc90bn," the study says.

The study looks at the support given to renewable sources from a different angle.

"If we did not support renewable sources, we could cancel real estate tax as well as motorway fees, and there would still be Kc3bn left," the study says.

Support to renewable sources will reach Kc38bn this year. The state's contribution to the amount is Kc11.7bn. Another part of the sum is paid by consumers in electricity prices.

An average family pays Kc1,047 in support to renewable sources a year, according to Next Finance. Most of the amount is used for the support os photovoltaic power plants.

But in 2013, the state will provide less than Kc11.7bn for the support of renewables, which will result into a further growth in electricity prices.

Renewable energy sources also have a serious impact on the industry which has to pay more for electricity prices because of them.

"When supporting the tax in 2011, the industry supported renewable sources with an amount of Kc8.2bn that could be used for investment raising the industry's competitiveness or in research," the study says.

Per capita investment in green energy in the Czech Republic is the second highest in the world, according to Next Finance.

Investment in renewables is the highest in Germany. Richer countries such as France, the Netherlands and the USA invest significantly less in green energy sources.

The study says the existing conditions of the Czech system are set in such a way that a certain very limited group of people can benefit from it.

However, the sector of renewable sources positively influenced employment, according to Next Finance.

"A total of 28,000 additional jobs were created in the Czech Republic thanks to the support to renewable sources," the company said in the study.

But production in the photovoltaic industry, for example, will gradually become more automated, which means that the number of people employed in the segment will be falling.

In the years to come, the system of support to renewable sources will lead to state expenditure worth Kc750bn, according to the study.

The Energy Regulatory Office (ERU) wants to stop the support to renewable sources as of 2014, but the state's expenditure will grow because the guaranteed investment return of the existing sources is in some cases even 20 years.

The study also says it would probably be more effective to invest the money spent on renewable sources on building insulation.

This would reduce energy consumption in the economy as well as dependence on gas imports. The measure would also maintain the volume of investment in housing.

Martin Sedlak of the Alliance for Energy Self-Sufficiency has rejected the conclusions of the study.

The study contains a lot of speculative or incomplete information, according to Sedlak.

"We can speculate that its main goal is to defend interventions in support of renewable sources that are being prepared in the draft of the state's energy policy," Sedlak said.

The Czech industry, for example, was lagging behind in competitiveness already before the support to renewable sources was introduced, he said.

"The condition would not change even after the support was cancelled," Sedlak added.