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Czechia announces the first call for support for high-efficiency combined production of electricity and heat

The Czech Ministry of Industry and Trade is launching auctions to provide operational support for the production of electricity from high-efficiency combined heat and power (CHP) generation for 2024.

The total expected budget for this support, which includes both a green electricity bonus and an auction bonus, has been set at 75 billion Czech koruna (2.9 billion euros) for the 15-year lifespan of the equipment covered by the support, as per the European Commission’s notification decision.

Minister of Industry and Trade Jozef Síkela emphasised the importance of this support, stating that “This support is key to the decarbonisation of the Czech heating industry and follows on from our successful efforts to ensure its approval by the European Commission.” He added that calls will be issued during 2024 and 2025, targeting production facilities with a total installed capacity of 3,090 megawatts (MW), to help replace coal-fired sources.

The auction will support electricity produced from high-efficiency combined production of electricity and heat, specifically in plants with an installed electrical output of over 1 MW, whether new or modernised. The total value of the installed electric power in this auction is set at 1,280 MWe. The fuels supported in this initiative include biomass, biogas and mine gas. For projects using natural gas, conditions must be met to ensure that by 2050, the project will be capable of replacing natural gas with renewable or low-carbon gases.

The deadline for putting the electricity production plant into operation or completing its modernisation is 31 December 2029. The reference auction price, from which the auction bonus is determined, is specified in the call. Successful bids will be entitled to an auction bonus for 15 years from the commissioning or modernisation of the plant. If the hourly price exceeds the competitive reference auction price, the manufacturer will return the difference.

The first call for bids in the 2024 auction to support electricity from high-efficiency combined heat and power generation is published and open from 2 July 2 2024. The deadline for submitting bids will begin on 17 July 2024, and the receipt of bids will close on 20 September 2024.

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