Oil Report

Czech grid warns will block solar, wind plants

PRAGUE, Feb 10 (Reuters) - The Czech power grid operator warned on Wednesday that a boom in solar and wind power plants could threaten stability of supplies, forcing it to take such plants offline, a warning to investors in new capacity.

Generous feed-in tariffs have led to an explosion in new power projects, especially solar plants, which guarantee high returns thanks to a drop in prices of photovoltaic panels.

“When we add together already completed projects and approvals issued for grid connections, the number is higher than an acceptable level for safe and reliable operation of the Czech Republic’s electricity system,” the operator CEPS said in a statement.

“Unless there is a quick change in the rules for connection of these sources, CEPS will be forced to take them out of operation, mainly when preventing or resolving emergency situations. That could mean a threat for investments... into solar and wind power plants.”

Ouptut of wind and solar plants is volatile due to changing weather, and sudden output surges or drops put pressure on grid operators who need to keep the power systems stable.

The feed-in tariffs are guaranteed by law, and can only be changed by 5 percent per year. Analysts have said that return on investments into solar power plants has soared and investors can recover their input in significantly less than 10 years.

CEPS said that the Czech power system already included 600 MW in solar and wind plants, and a further 3,500 MW capacity has been approved.

The company said it had asked the country's power distribution companies, CEZ CEZPsp.PR, E.ON EONG.DE and Prazska Energetika PREG.PR to halt issuing approvals for grid connections.

It said it would seek to define new rules for project approvals with the distribution companies.

The parliament has been discussing a law that would allow faster cuts in the feed-in tariffs for new plants built as of next year, prompting a rush in investment activity this year. (Reporting by Jan Lopatka; Editing by Keiron Henderson)