Thursday, 24 April 2014

Industry Min to look into solar energy scandal

12 February 2013

Prague, Feb 11 (CTK) - Czech Industry and Trade Minister Martin Kuba (Civic Democrats, ODS) said yesterday he wants the government to start to deal with the results of the audit of purchasing prices of photovoltaic electricity, conducted at the Energy Regulatory Office (ERU), as soon as possible.

The topic could be discussed at the cabinet's meeting this or next week, Kuba told journalists.

ERU chairwoman Alena Vitaskova has said damage worth tens of billions of crowns has probably been created owing to wrong setting of purchasing prices of solar electricity in 2005 to 2011.

The cabinet must demand that results of the audit at the ERU be checked as soon as possible so that it becomes clear whether figures given by Vitaskova correspond to reality, Kuba said.

"Because, in this extent, this is the biggest affair concerning public finances of Czech citizens," Kuba said.

It is necessary to act resolutely because the topic of high purchasing prices of electricity from renewable sources affects the entire society, according to Kuba.

A number of companies with energy intensive production have problems with paying electricity bills, and their bankruptcy would lead to a loss of jobs and a further growth in unemployment which is already high, the minister said.

However, Kuba did not mention any specific measures that the cabinet could adopt.

It is above all necessary that all the involved institutions start to deal with the matter seriously as soon as possible and find out as soon as possible whether damage worth billions of crowns has really been created, he said.

Kuba also wants to ensure that the owners of photovoltaic power plants can be traced.

A number of the owners are hidden behind bearer shares, Kuba said, adding companies that receive any form of support from the state should have a transparent ownership structure.

Kuba also said he considers the current arrangement of support to renewable sources unreasonable. He repeated his ministry insists on terminating the support to new photovoltaic power plants as of 2014.

The ERU said last week that some of its employees might have acted illegally in setting the purchasing prices of electricity from photovoltaic plants in 2005 to 2011. The state allegedly suffered damage worth billions of crowns owing to the higher prices that were set in a non-transparent way.

Distributors must buy electricity produced by photovoltaic power plants at much higher prices than are the prices at which they then sell it. The difference in the prices is reflected in the final prices paid by consumers.

Environment Minister Tomas Chalupa (Civic Democrats, ODS) has said Czech tax payers will pay up to Kc1,000bn owing to the wrongly set system of support to solar electricity.

The Czech Photovoltaic Industry Association (CZEPHO) and alliance for energy self-sufficiency AliES said yesterday, referring to an expert assessment report written by company Ostravska znalecka, that investment return on photovoltaic power plants has exceeded the 15-year period guaranteed by law due to the introduction of tax on solar plants launched in operation in 2009 and 2010.

Both the organisations criticise the solar tax and reject the possible extension of its effect, proposed in the past by Kuba.

CZEPHO and AliES also say that the ERU submitted two contradictory assessment reports for the hearing on the solar tax at the Constitutional Court. The ERU used manipulated data, according to CZEPHO.

The ERU rejected yesterday the accusation that it had manipulated the documents submitted to the Constitutional Court in proceedings over the solar tax.

The ERU's documents submitted to the court were described as manipulated by CZEPHO executive director Zuzana Musilova on Sunday. A criminal complaint is being prepared against ERU head Vitaskova due to the alleged data manipulation, Musilova said.

A complaint against the 26 percent solar tax was filed by operators of photovoltaic power plants at the Constitutional Court, but the court turned down their objections and left the tax in effect.

Musilova said on Sunday the ERU had provided two different calculations that were "provably manipulated and wrong" to the court.

The ERU said yesterday the statements made by Musilova were not true.

"The Energy Regulatory Office will thoroughly consider further steps it will take in the matter of accusing the ERU of manipulating data," the regulator said in a press release.

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