On October 6, 2022 the European Council issued Regulation (EU) 2022/1854 (the “Regulation”) stipulating the framework for a levy on excessive revenues from electricity sales (the “Levy”). The individual member states are to determine the details regarding the Levy, including its final amount and the conditions under which it will apply to electricity. They can choose to make electricity producers exempt from the Levy if they operate at an installed capacity of up to 1 MW (Article 7(3)) or have market revenues acquired from electricity sales on the balancing energy market and compensation for redispatching and countertrading (Article 7(4)), or to apply the Levy on only 90% of the market revenues exceeding the stipulated cap for market revenue (Article 7 (5)).
The conditions for applying the Levy in the Czech Republic are stipulated by the amendment to the Energy Act currently being prepared, published on November 11, 2022 in the electronic library of upcoming legislation and soon submitted to Parliament for expedited discussion due to legislative urgency (due to the energy crisis requiring a timely response and major impending economic damage) as Parliamentary Press No. 335 (hereinafter the “Bill”): https://www.psp.cz/sqw/historie.sqw?o=9&t=335
The Bill anticipates being in effect as of December 1, 2022, when the Levy should exclude excessive revenues from the sale of electricity generated:
The annual green bonus, which has been widely used by photovoltaic power plant operators in recent years, remains somewhat unclear, as the Bill does not explicitly exempt these revenues from the Levy. In the commenting proceedings the Ministry for Industry and Trade said the following on this point: “exempting producers’ revenues from support in the form of the annual green bonus has no basis in the regulation”.
However, the Regulation does state that the Levy excludes “any support provided by member states”. If the Bill includes the exemption of feed-in tariffs, auction bonus and hourly green bonuses, in our opinion it should also include a specific exemption of revenues arising from the annual green bonus, which of course the Bill does not currently include.
We will be able to analyse the Bill’s ultimate impact only after it is passed in Parliament. However, producers would be well advised to defer decisions on the form of support for 2023 and signing the agreement with the purchasing electricity trader as long as possible in order to wait and see whether the final version of the Bill will be passed
The Czech government has approved the bill amending acts including the Energy Act (Act No. 458/2000), the Act on Supported Energy Sources (Act No. 165/2012), and other related acts. The bill is known to the public as Lex OZE II. Lex OZE II introduces a number of changes including the following:
On October 1, 2022 an amendment to the Act on the Registration of Ultimate Beneficial Owners came into effect.
Proud to have assisted our client Heidel Verwaltungs GmbH with the sale of its container factory in Rozvadov, with over 35,000 sqm, and machinery, stores and raw materials.
