Czechia ·Biomethane auction ·Published 09 Sep 2026 ·MPO evaluation report, 7 Sep 2026

Czechia’s biomethane CfD: demand proven, delivery still to be tested

Czechia has replaced its little-used, administratively set biomethane bonus with a considerably more credible investment instrument: competitively awarded, 15-year, pay-as-bid support that functions economically as a two-way contract for difference. The reform removes most wholesale gas-price, offtake and balancing risk while protecting the state against windfall returns when gas prices are high.

Of 63 bids evaluated, 54 met the formal requirements and 11 were selected at the evaluation stage. The 54 compliant bids requested support for 153.60 million Nm³/year, 3.41 times the auction’s 45 million Nm³/year allocation. The 11 selected bids total 41.86 million Nm³/year, or 93.0% of the published allocation, at reference prices between CZK 2 346 and CZK 2 878.75/MWh HHV.

The first auction materially strengthens the policy case for Czechia’s biomethane CfD. It demonstrates that a competitively awarded, 15-year, pay-as-bid instrument can mobilise far more project volume than the state is currently prepared to support. It also produced a meaningful price spread below the CZK 3 000/MWh ceiling.

The 11 bids identified as successful in the evaluation report are not yet final, unconditional awards: each selected bidder must still provide the second part of its financial security. If one fails, MPO may move down the compliant ranking. Most selected capacity is scheduled for 2028–29, and every project still carries permitting, construction, connection, feedstock, certification and monthly performance risk.

Czechia now has a credible financing mechanism for grid-ready projects. It still lacks a complete transition strategy for the wider biogas fleet, especially plants that cannot connect economically or are better used for flexible electricity and local heat.

Gross submitted volume was almost four times the allocation; compliant volume was 3.4 times the allocation.

Forty-three of 54 compliant bids—representing 72.7% of compliant volume—were priced at or above CZK 2 880/MWh, within 4% of the ceiling.

Five of nine compliant new integrated-plant bids were selected, compared with three of 21 conversions and three of 24 upgrading-only projects.

The two largest projects account for 37.8% of selected volume; the three largest account for 53.8%. EFG secured three project awards representing 17.6%.

Only one selected project is scheduled for 2027; 94.8% of selected volume is scheduled for 2028–29.

Nine bids were rejected, including two priced within the winning range or at the award boundary.

Each bidder states the required reference auction price in CZK/MWh, using the fuel’s higher heating value, and the annual biomethane production it proposes to deliver. Bids are ranked solely by price, from lowest to highest, until the auction volume is filled. Each winner receives its own bid price rather than a common marginal clearing price.

For the first call, the maximum permitted strike price was CZK 3 000/MWh. The ceiling is intended to reflect the funding gap of a reference project, including capital expenditure, operating costs and an allowed cost of capital. Other investment aid must be reflected in the calculation, and aid cannot be accumulated for the same costs in a manner that creates overcompensation.

The producer injects biomethane into the Czech gas system and sells it under a standard contract to the competitively appointed mandatory purchaser. The purchaser pays the applicable monthly gas price and assumes balancing responsibility, removing the need for small producers to operate directly as gas traders.

When the relevant monthly gas price is below the project’s indexed strike price, OTE, the Czech market operator, pays the difference. When the market price exceeds the strike, the producer repays the excess. Eligible commodity-plus-support revenue is therefore substantially stabilised around the winning price rather than merely being protected by a floor.

The first call provides a fixed 2% annual escalation during operation. Indexation begins only after commissioning, leaving construction-period inflation with the developer.

Supported producers and the mandatory purchaser do not retain the relevant guarantees of origin. OTE combines the renewable and sustainability attributes into a product described as GO+, auctions it and applies the proceeds to support costs. Scheme financing is supplemented by EU ETS auction revenues and, where necessary, the state budget.

Planned auction trajectory

The Commission-approved design envisages six calls. Together, these calls would procure 350 million Nm³ of annual production capacity.

The 11 selected bids sum to 41.863 million Nm³/year, not the full 45 million Nm³/year headline allocation. The report explains that higher-priced bids remained outside the award set even after applying any bidder-accepted volume reductions. The residual 3.137 million Nm³/year is therefore best understood as an allocation-fitting effect, not a lack of demand. MPO had not explained whether or how the residual would be carried forward at the time of this update.

The compliant bid book, ranked by price

CEILING CZK 3 000

2 800

2 600

2 400

AWARD BOUNDARY

0 CUMULATIVE VOLUME BID → 153.6 MM Nm³/YEAR

Selected · 11 bids Compliant, not selected · 43 bids

The 11 selected projects

#	Route	Bidder / location	CZK/MWh	Nm³/year	Commissioning
{{ w.rank }}	{{ w.routeShort }}	{{ w.bidder }}	{{ w.priceF }}	{{ w.volF }}	{{ w.comm }}

SELECTED PENDING SECOND SECURITY · ROUTES: NEW = NEW INTEGRATED BIOMETHANE PLANT · UPGRADING = UPGRADING-ONLY INSTALLATION · CONVERSION = CONVERSION OF AN ELECTRICITY-PRODUCING BIOGAS PLANT · COMPANY IDs IN THE APPENDIX

The 54 compliant projects offered 153.6 million Nm³/year against a 45 million Nm³/year allocation. This is considerably stronger evidence of investability than pre-auction developer statements. The result also means that future procurement does not need to be justified as an attempt to discover whether a pipeline exists. The policy challenge is now to preserve that pipeline through predictable auction timing, grid access and stable implementation rules.

Winning bids ranged from CZK 2 346 to CZK 2 878.75/MWh HHV. The indicative volume-weighted winning price was CZK 2 697.13/MWh, approximately 10.1% below the CZK 3 000 cap. However, the average is pulled down sharply by the two largest and cheapest bids. The median winning price was CZK 2 844.53/MWh, and the first unsuccessful compliant bid was CZK 2 888/MWh—only CZK 9.25/MWh, or 0.32%, above the highest selected price. Across the full compliant book, 43 of 54 bids were priced at or above CZK 2 880/MWh. The first auction achieved real savings, but it does not establish that the broader Czech project pipeline can be delivered far below the cap. The dense cluster near CZK 2 900–3 000/MWh suggests that many projects have similar and relatively high required revenues.

Five of the nine compliant bids in the new integrated-plant category were selected, and that category accounts for almost half of selected volume. By contrast, only six of the 45 compliant conversion and upgrading-only bids were selected. This is notable because Czech policy discussions have often emphasised conversion of the country’s large existing biogas fleet. The result suggests that integrated plants designed around biomethane production, grid injection and the auction’s sustainability conditions from the outset can compete strongly.

Success rate by bid count, and share of selected volume

Success rate{{ r.rate }}

Share of selected volume{{ r.share }}

Total · 54 compliant · 11 selected · 20.4% · 41 863 445 Nm³/year

It would be premature to conclude that greenfield plants are structurally cheaper. The upgrading category contains the two lowest-priced and largest bids, while many bids in the conversion and upgrading-only categories cluster near the cap. Site-specific connection costs, sunk assets, alternative CHP revenues, feedstock contracts and plant configuration may matter more than the formal project category. MPO should therefore publish more granular, anonymised cost and connection analysis after several rounds.

The 11 selected bids correspond to 10 legal entities, because EFG BPS Acq 1 has separate selected bids for Vyškov and Rapotín. EFG as a group reports three selected projects—Vysoké Mýto, Vyškov and Rapotín—with combined annual volume of 7.36 million Nm³, or 17.6% of the selected portfolio. Two separate bidders located in Smržice account for the two largest projects and 15.81 million Nm³/year. The evaluation report does not establish common ownership or shared infrastructure.

Selected volume by project · largest three shaded

Only ALADERON’s 2.19 million Nm³/year conversion is scheduled for 2027. Nearly three-fifths of selected volume is scheduled for 2028, and more than one-third for 2029. The auction will make only a modest contribution to national output before 2028.

Scheduled commissioning of selected volume

The contract is not simply a 15-year price guarantee. Support depends on monthly production and sustainability performance.

The sustainability trajectory is an important strength. It progressively directs the market towards wastes and residues without immediately prohibiting all other sustainable feedstocks. It also avoids locking 15-year contracts into today’s carbon-performance threshold.

The weakness is the binary penalty design. A marginal monthly failure can have a disproportionate revenue impact because support for the whole month is lost. That risk is likely to be reflected in bids through higher strike prices, conservative capacity licensing, larger reserve accounts or more restrictive debt covenants.

Fossil process heat will reduce eligible output

MPO · 21 Jul 2026

On 21 July, MPO clarified that fossil fuel—particularly natural gas—used to provide technological or process heat should reduce the volume of biomethane eligible for support by an equivalent amount of energy. The clarification closes a potential carbon-accounting loophole under which a plant could claim support for gross biomethane output while relying materially on fossil energy in production.

MPO has warned against strategic withdrawal and rebidding

MPO · 07 Jul 2026

A 7 July statement warned successful projects against withdrawing and attempting to rebid the same development in a later auction on more favourable terms. MPO indicated that rules could be tightened if strategic behaviour emerged.

Capacity calculations remain legally unsettled

Print 67 · unresolved

MPO’s second set of frequently asked questions acknowledged that current legislation does not clearly regulate every combination in which auctioned capacity, supported capacity and the installation’s eventual licensed capacity differ. Under the existing approach, lower delivered capacity reduces support, while additional capacity does not automatically expand the support entitlement. MPO associated a fuller correction with parliamentary print 67.

Because the Senate rejected the wider bill on 20 August, that correction had not become law by 3 September. The Chamber may still override the Senate, but bidders and lenders should not treat the proposed wording as settled until the legislative process is complete.

Feedstock eligibility can evolve during the contract

MPO Q&A

MPO has also clarified that the list of qualifying advanced feedstocks is not frozen permanently at the date of award; it can evolve with Czech and EU legislation. Digestate-storage covering is not prescribed as a specific technology provided the project meets its GHG limit.

Translated from MPO’s official evaluation report. Filter and sort the book below.

Route

Result

Sort

#	Result	Route	Bidder / location	Source gas	CZK/MWh	Nm³/year	Comm.
{{ r.rank }}	{{ r.result }}	{{ r.routeShort }}	{{ r.bidder }}{{ r.id }}	{{ r.gas }}	{{ r.priceF }}	{{ r.volF }}	{{ r.comm }}

Calculation note. All totals, shares, medians and volume-weighted prices in this analysis were calculated from the 54 compliant line items published by MPO. The volume-weighted price is an analytical indicator, not an official auction clearing price. Because the auction is pay-as-bid, each successful project retains its own reference price.

Sources

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