The Energy Act has been amended:
Right to choose natural gas supplier
- From 1 January 2005, all end customers whose annual gas consumption (in 2003) exceeded 15 million m3 and all licensed energy producers who burn natural gas to produce energy will be able to choose their natural gas supplier.
- From 1 January 2006, this will be extended to all end customers apart from residential customers.
- From 1 January 2007, all end customers will be able to choose their natural gas supplier.
Unbundling in the gas market
- From 1 January 2006, transmission system operators must not engage in any activities unconnected with transmission, storage or distribution.
- From 1 January 2007, the same will apply to distribution system operators.
Unbundling in the electricity market
- From 1 January 2005, transmission system operators must not engage in any activities unconnected with transmission.
- From 1 January 2007, distribution system operators must not engage in any activities unconnected with distribution.
Emissions Trading Act
The Emissions Trading Act brings Czech law into line with EU law and establishes the EU's emissions trading scheme for CO2 in the Czech Republic. The system should have started to operate on 1 January 2005 and will involve about 450 Czech companies. The first trading period will last for three years and subsequent periods will last five years.
In each trading period, the number of permits allocated and how they are allocated are determined by a National Allocation Plan. Each company producing CO2 can no longer operate without a permit authorising the release of CO2 up to a specified amount. Companies are deemed to consent to the NAP unless they raise any concerns with the Ministry of Environment.
The scheme aims to reduce CO2 emissions wherever the costs of emissions reduction are lowest. Companies whose emissions are less than their permit allows can trade the unused emissions on the EU market with companies whose emissions reduction costs are higher.
The Czech Republic's allocation for the first (three year) period, as agreed after negotiations with the European Commission, allows for the emission of 323.64 million tones of CO2 (107.88 million tonnes p.a.). More than 60% is allocated to the energy industry. About 3 million tonnes is held in reserve for new companies; any unused part of the reserve will be sold by auction to existing companies.
Renewable energy
A new law promoting the use of renewable energy – required to comply with EU law – has not yet been introduced after its passage through Parliament was suspended in November 2004. There are some incentives promoting the use of renewable energy sources in existing legislation but these are not sufficient to comply with EU law.
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