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Czechs to End Most Renewable Subsidies, Supports Fossil Fuels
PRAGUE--The Czech Republic is a presidential-signature away from eliminating subsidies for decentralized, clean renewable energy production following the Senate Friday approving a bill that instead directs support to centralized power production at plants burning fossil fuels.
The Czech upper house of parliament, or Senate, voted 56 in favor with only one opposing a bill to eliminate subsidies for new photovoltaic power plants while quickly winding down support for other types of renewable power production.
The bill was put forth by the country's caretaker government, has been approved by the lower house of parliament and only needs the signature of President Milos Zeman to become law, which is expected within a matter of weeks.
The bill was fiercely opposed by environmental groups and lobbyists representing investors in the photovoltaic generation sector.
The bill's approval signals that the central European country--where manufacturing and industry are key sectors of the economy--is breaking from the European mainstream which supports renewable energy.
The new bill looks to favor major power producers, such as 70% state-owned CEZ AS (BAACEZ.PR), which primarily produces electricity at large, centralized power plants.
"Definitely we welcome it, it's a step in the right direction, to gradually limit the spiral of support for renewable energy which has deformed the entire market," CEZ spokesman Ladislav Kriz said immediately after the vote.
The Czech Republic has seen a surge in renewable power production over the last four years due to rich subsidies, but amid a public outcry over fast-rising power prices, politicians have reacted by virtually ending most subsidies.
Local politicians are now in campaign mode ahead of parliamentary elections scheduled for Oct. 25 and 26.
Write to Sean Carney at sean.carney@wsj.com
Go to http://blogs.wsj.com/emergingeurope/ for the WSJ blog on Central and Eastern Europe, covering business, politics, society and more, written by our correspondents across the region.
By Sean Carney