UPDATE 1-Czechs plan about 30 pct tax on carbon emissions

                                
 * Carbon tax part of broader plan to cap power price spikes
                                
 * Analyst says the news is negative for CEZ
                                
 
                                
 By Roman Gazdik
                                
 PRAGUE, Oct 27 (Reuters) - The Czech Republic plans to slap
a tax of about 30 percent on carbon credits in 2011 and 2012, a
higher-than expected rate as the government seeks funds to limit
power price hikes due to a solar boom, Industry Minister Martin
Kocourek said on Wednesday.
                                
 The carbon emissions tax is part of a broader plan the
centre-right government wants to enact in order to cap household
and industrial electricity price spikes at 5.5 percent.
                                
 "We do not want this to include heating plants, combined
production of electricity and heat, and electricity generation
for one's own use, so (the tax level) needs to be around 30
percent," Kocourek told Reuters.
                                
 The Czech Republic, a country of 10.5 million people, was
the third-biggest solar nation in Europe last year in terms of
new installed capacity due to an investment boom sparked by
generous feed-in tariffs.
                                
 The government plans to raise 4.8 billion crowns ($268.9
million) from the tax in 2011 and 2012, which will mainly hit
majority-state owned power group CEZ <CEZPsp.PR>, analysts say.
The government had not said what the tax rate might be but a
local daily newspaper had reported it would be 25 percent.
                                
 Josef Nemy, an analyst at Komercni Banka, said the news was
mildly negative for CEZ and would cost central Europe's biggest
utility and largest listed company about 2 Czech crowns per
share.
                                
 "This is a bit of surprise because (it was expected) the tax
would be 25 percent," he said. "It is a negative surprise but it
won't have as big an impact as previously announced measures."
                                
 Shares of CEZ -- slated to receive a big chunk of the
credits -- sank to a more than 1-1/2 year low earlier in October
due to a potential delay of its Temelin nuclear power plant
expansion tender and after the Czech government announced its
plan to rein in a solar boom driven by generous feed-in tariffs.
                                
 The government has also approved a 26 percent tax on solar
plants larger than 30 kilowatts installed capacity and connected
to the grid in 2009 and 2010.
                                
 Analysts said the taxes were meant to rectify a policy in
which subsidies granted to solar power producers had grown too
large after a steep fall in the price of solar power cells,
adding the move was not like a windfall tax on utilities in
Hungary that the government was using to plug budget holes. 
                                
 Earlier this week the Czech energy regulator said solar
capacity would likely soar past official estimates by the end of
2010, fuelled by a nearly 70 percent rise in new licenses in
October as plant operators raced to qualify to connect their
projects to the grids.
 (Writing by Michael Kahn and Jan Lopatka; editing by James
Jukwey)