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Consumer loss in Czech photovoltaic power plants in 2010–2011

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  • Průša, Jan
  • Klimešová, Andrea
  • Janda, Karel

Abstract

This paper provides a financial survey of a small sample of Czech photovoltaic (PV) plants. To evaluate the extent of market losses, we calculate the shadow market price of solar electricity. From the profit and loss accounts of the PV plants and the shadow market price we estimate the total economic loss generated by PV electricity sector in the Czech Republic. The presented microeconomic approach has two main advantages: firstly, we work with real observed data, which offsets the drawback of a limited sample. Secondly, the profit accounting calculation enables sensitivity analysis with respect to key variables of the plants. We show that money invested in PV plants would generate an annual loss of 8%. Given the estimated solar assets of CZK 165.6 billion (EUR 6.6 billion) as of December 2011, this translates in at least CZK 12.6 billion lost in the Czech solar sector in 2012. About 43% of this loss is due to high technology costs and corresponds to pure dead weight loss, while the remaining 57% constitute the redistributive profit component of subsidies. Finally, we calculate that unless electricity prices increase or technology costs decrease approximately sevenfold, PV plants will remain loss making.

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  • Průša, Jan & Klimešová, Andrea & Janda, Karel, 2013. "Consumer loss in Czech photovoltaic power plants in 2010–2011," Energy Policy, Elsevier, vol. 63(C), pages 747-755.
    • Handle: RePEc:eee:enepol:v:63:y:2013:i:c:p:747-755
    DOI: 10.1016/j.enpol.2013.08.023
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    Cited by:

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    2. Karel Janda & Jan Malek & Lukas Recka, 2017. "Influence of Renewable Energy Sources on Electricity Transmission Networks in Central Europe," Working Papers IES 2017/05, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Feb 2017.
    3. Janda, Karel & Tuma, Ladislav, 2016. "Market viability of photovoltaic plants: merit order effect approach," MPRA Paper 74884, University Library of Munich, Germany.
    4. Janda, Karel & Tyuleubekov, Sabyrzhan, 2016. "Overview of Czech and German Renewable Energy Policies," MPRA Paper 75442, University Library of Munich, Germany.
    5. Janda, Karel & Málek, Jan & Rečka, Lukáš, 2017. "Influence of renewable energy sources on transmission networks in Central Europe," Energy Policy, Elsevier, vol. 108(C), pages 524-537.
    6. Rečka, L. & Ščasný, M., 2016. "Impacts of carbon pricing, brown coal availability and gas cost on Czech energy system up to 2050," Energy, Elsevier, vol. 108(C), pages 19-33.
    7. Karel Janda & Štěpán Krška & Jan Průša, 2014. "Česká fotovoltaická energie: modelový odhad nákladů na její podporu [Czech Photovoltaic Energy: Model Estimation of The Costs of its Support]," Politická ekonomie, Prague University of Economics and Business, vol. 2014(3), pages 323-346.
    8. Karel Janda & Jan Málek & Lukáš Rečka, 2017. "Vliv obnovitelných zdrojů na českou soustavu přenosu elektřiny [The Impact of Renewable Energy Sources on the Czech Electricity Transmission System]," Politická ekonomie, Prague University of Economics and Business, vol. 2017(6), pages 728-750.
    9. Lukáš Rečka & Milan Ščasný, 2017. "Impacts of Reclassified Brown Coal Reserves on the Energy System and Deep Decarbonisation Target in the Czech Republic," Energies, MDPI, vol. 10(12), pages 1-27, November.
    10. Karel Janda & Jan Malek & Lukas Recka, 2017. "The Influence of Renewable Energy Sources on the Czech Electricity Transmission System," Working Papers IES 2017/06, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Mar 2017.
    11. Zimmermannová Jarmila & Pawliczek Adam & Čermák Petr, 2018. "Public Support of Solar Electricity and its Impact on Households - Prosumers," Organizacija, Sciendo, vol. 51(1), pages 4-19, February.
    12. Luňáčková, Petra & Průša, Jan & Janda, Karel, 2017. "The merit order effect of Czech photovoltaic plants," Energy Policy, Elsevier, vol. 106(C), pages 138-147.
    13. Ondřej Filip & Karel Janda & Ladislav Krištoufek, 2018. "Ceny biopaliv a souvisejících komodit: analýza s použitím metod minimální kostry grafu a hierarchických stromů [Prices of Biofuels and Related Commodities: an Analysis Using Methods of Minimum Span," Politická ekonomie, Prague University of Economics and Business, vol. 2018(2), pages 218-239.

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