Selected issues and topics in
the energy policy of the
Czech Republic
PhDr. TomášVlček, Ph.D.
MEB418 Energy Security ofVisegrad Countries
April 12, 2018
Czech Republic
Area 78 866 km2
Water 2 %
Population in 2011 10 436 560
Population density 134 / km2
GDP (PPP) 27 190 USD / per capita
President Miloš Zeman
Prime Minister Andrej Babiš
Religion 10.3 % Roman Catholic, 80 %
non-declared or non-religious
Ethnic Groups 63.7 % Czechs
4.9 % Moravians
1.4 % Slovaks
29.9 % Other minorities
Country-specific characteristics of
energy sector
 Essential Background of Current Czech
Energy Sector
 Specific topics
◦ Crude Oil and Natural Gas Introduction
◦ Power Utility Sector Development
 Coal Sector
 Nuclear Sector
 RES Sector
Vstup do problematiky
6
Five country-specific
essential
characteristics of
energy sector
 The former use of wood fuel replaced coal-energy-intensive
steam technology in the food industry, transport and industry.
 Use of relatively rich deposits of coal transportation was limited
- concentration of infrastructure around the mines.
 Origins of the systematic use of coal - 1930s - Kladno, Ostrava,
Rosicko-Oslavany.
 June 22, 1919 - General purpose power companies Act - the
need to connect to the network.
 The trend towards centralization of production - unification of
networks, voltages and frequencies.
7
Characteristic No. 1 - Tradition
 After nationalization of the fragmented electricity sector in
1945, the construction of a single power system began
◦ Destroyed infrastructure
◦ Planned industry
 50´s and 60´s of the 20th century are in the spirit of
intensive construction of line structures and linking of local
electricity systems
◦ Hodonín, Poříčí, Opatovice,Vltavská kaskáda (Lipno, Orlík etc.)
 Inefficiencies in the industry leads to excess of
consumption over current production - shutting household
off
8
Characteristic No. 1 - Tradition
 60´s and 70´s are characterized by extensive coal-fired
power plants
 70´s and 80´s bring nuclear energy
 Water installations were built during these years as
complementary power plants
 The backbone of the Czech electricity is thus built on this
triangle of coal-fired, nuclear and hydro power plants
=> Czech historical tradition of Energy
9
Characteristic No. 1 - Tradition
 Ing. Vladimír Dlouhý, CSc. 1.1.1993 – 2.6. 1997 Fakulta informatiky a statistiky VŠE
ABB, KSK Power Ventur, Pač. komise
 JUDr. Karel Kühnl 2.6. 1997 – 22.7. 1998 Právnická fakulta UK
 Doc. Ing. Miroslav Grégr, CSc. 22.7. 1998 – 15.7. 2002 Strojní fakulta ČVUT (Atomic grandpa)
Svaz průmyslu České republiky
 Ing. Jiří Rusnok 15.7. 2002 – 19.3. 2003 Národohospodářská fakulta VŠE
 Ing. Milan Urban 19.3. 2003 – 4.9. 2006 Hutnická fakulta VŠB v Ostravě
 Ing. Martin Říman 4.9. 2006 – 8.5. 2009 Fakulta elektrotechnická VUT v Brně
Středočeská energetická, a.s.; ČEZ,
a.s.; ČEPS, a.s.; SPČR
 Ing. Vladimír Tošovský 8.5. 2009 – 13.7. 2010 Fakulta elektrotechnická ČVUT
Středočeská energetická, a.s.; ČEZ,
a.s.; ČEPS, a.s.
 Ing. Martin Kocourek 13.7.2010 – 14. 11. 2011 Fakulta stavební ČVUT
Unipetrol, ČEZ
 MUDr. Martin Kuba 16.11 2011 – 10.7.2013 1. lékařská fakulta Univerzity Karlovy
Českobudějovické teplárny
 doc. Ing. Jiří Cieńciała, CSc. 10.7.2013 – 29.1.2014 Ekonomická fakulta VŠB v Ostravě
Třinecké železárny, Svazu průmyslu ČR
 Ing. Jan Mládek, CSc. 29.1.2014 – 28.2.2017 VŠE, Prognostický ústav AVČR
 Ing. Jiří Havlíček, MBA 4.4.2017 – 13.12.2017 Národohospodářská fakulta VŠE
 Ing. Tomáš Hüner 13.12.2017 – today Kat. tepel. strojů a jad. zařízení FS na VUT
10
Characteristic No. 2 – Ministers of Industry and Trade
 Energy sector was public service until 1990
◦ Politics/strategies and company praxis worked in positively
complementary relation
 Since 1990 it is private activity
◦ Politics/strategies and company praxis worke in dependent
relation, company praxis must deal with restrictive
politics/strategies (domestic and EU level)
11
Characteristic No. 3 – Privatization
 Development after 1989
General trends in post-revolution development
1) Replacement of fully controlled and
directively managed energy sector with a system
reflecting the interests of the new state
2)The process of entering into EU
12
Characteristic No. 4 – Structural Changes
 Phase 1 - the restructuring of centrally
controlled energy system
 Phase 2 - privatization of key energy companies
 Phase 3 - a stable situation with finished
privatization and concentration on completion
of the liberalization of energy sector (EU entry).
13
Characteristic No. 4 – Structural Changes
 Phase 1 - the restructuring of centrally controlled energy system
◦ 50 state enterprises, restructuralization of coal sector, unbdundling (CEZ,
CPP)
 Phase 2 - privatization and liberalization of key energy companies
◦ Natural gas (Transgas), Oil (refineries, transport) vs. electricity (CEZ)
 Phase 3 - a stable situation with finished privatization and
concentration on completion of the liberalization of energy sector
(EU entry).
◦ Current situation: stable energy sector with strong national company,
diversification of oil and gas, better energy efficiency and ecologization of
energy sector, liberalized market with electricity and gas, however high
energy intensity (1/3 above EU average), dependence on coal and nuclear,
export of electricity, old production units etc.
14
Characteristic No. 4 – Structural Changes
 Until 1990, the vast majority of energy companies was in
public/state ownership - a very long tradition
 After 1990, the privatization came into process, which has
been far from successful in some sectors
 At the same time the transition to a democratic system took
place
 And concurrently the EU liberalization process took place
As a result, these were major changes that induced
resistance and chaos among cadres and people who have
studied and acquired their work experience in the energy in
the period of socialism
15
Characteristic No. 4 – Structural Changes
 Coal (!)
 Uranium
 Water
 Gas from Russia
 Unsuitable geographical and meteorological
conditions for renewables development
16
Characteristic No. 5 – Status of the power
utility sector base
17
Relevant commodities
Commodity Resources Reserves Mine production
Lignite 1 903 000 819 053 000 262 000
Subbituminous
coal
915 100 000 4 468 789 000 43 931 000
Hard coal 168 917 000 7 545 818 000 11 193 000
Uranium 374 20 843 259
Crude oil 1 415 000 19 899 000 173 000
Natural gas 4 767 000 000 8 404 000 000 201 000 000
Czech Energy Sector
Key Energy Statistics
Source Consumption Imports TPES share Electricity
Generation share
Crude Oil 9.81 Mt 98% 17.1%* 0.1%
Natural Gas 8.41 bcm 111% 15.8% 1.3%
Coal (all types) 52.3 Mt 6% 42.7% 57.1%
RES - - 7.5%** 9.2%
Nuclear Energy - - 17.2% 32.3%
* Oil products imports add another 3.1% of TPES share
** Biofuels and waste stand for 6.5% of TPES share and 3.2% of Electricity Generation
share
Note: 2011 data; Source: U.S. Energy Information Administration; International
Energy Agency; OECD & IEA, 2013; compiled and calculated by T. Vlcek
Crude Oil and Natural Gas Introduction
 Oil production in the Czech Republic in 2014 reached the value of 0.148 milion tons, ie 2%
of consumption in the Czech Republic in 2014
Total consumption in the Czech Republic in 2014 amounted to 7.370 milion tons of oil
20
Crude Oil Supply Issues
21
Pipeline Routes in the Czech Republic
Druzhba IKL
Start of Supply 1962 (Slovakia), 1964 (Czech
Rep.)
1996
Transport Capacity (Mt/y) 9 10
Supply Volume (tons, 2010) 4.536 3.192
Percentage Rate (%, 2010) 58.7 41.3
Supply Volume (tons, 2012) 2.993 4.082
Percentage Rate (%, 2012) 42.3 57.7
Supply Volume (tons, 2014) 3.729 3.641
Percentage Rate (%, 2014) 50.6 49.4
Utilization (%,
2010/2012/2014)
50.40 / 33.26 / 41.43 31.92 / 40.82 / 36.41
Source Russia Algeria, Azerbaijan, Italy,
Kazakhstan, Libya, Nigeria,
Norway, Russia, Syria
Pipeline Transit Countries Russia, Belarus, Ukraine,
Slovakia
Italy, Austria, Germany
Note: The route of the south branch of the Druzhba pipeline, which transports supplies to the Czech Republic, crosses
Almetevsk - Kuybyshev - Unecha - Mozyr - Brody - Uzhhorod - Sahy - Litvinov. Also, crude oil coming from Russia is not
necessarily Russian.
Source: Ministry of Industry and Trade of the Czech Republic, 2009d, p. 1, Czech Association of Petroleum Industry and
Trade, 2010, p. 8; "Druzhba Pipeline", 2009, p. 56; Ministry of Industry and Trade of the Czech Republic, 2011, p. 15
22
23
4
3
1
4
1
0
2
0
1
4
6
9
2
0
3.25-
5
8
30/27
2
722.5
13.5
6.8
Slavonski brod
Pančevo
Novi Sad
Hamburg
Köln am
Rhein
Rotterdam
NWO
NDO
16.3
8
RAPL
9
0.6
6
7.9
25
 Natural Gas Diversification and Liberalization
Issues
 Natural Gas production in the Czech Republic in 2014 reached the value of
0.198 bcm/y, ie 2.7% of consumption in the Czech Republic in 2014
 Total consumption in the Czech Republic in 2014 amounted to 7.28 bcm/y
26
Deposits, reserves and mine production of natural gas in the Czech Republic
2008 2009 2010 2011 2012 2013 2014
Deposits – total number 88 92 94 83 90 96 93
- exploited 41 49 52 48 46 40 40
Total mineral reserves 46 044 46 140 28 924 30 172 30 506 31 085 27 949
- economic explored reserves 4 265 4 339 6 123 7 374 7 243 7 646 7 491
- economic prospected
reserves
39 807 39 895 2 281 2 335 2 791 2 981 2 956
- potentially economic
reserves
1 973 1 906 20 520 20 463 20 472 20 458 20 458
- exploitable (recoverables)
res.
27 812 27 846 4 767 4 660 4 886 5 512 5 064
Mine production 168 180 201 187 204 207 198
Note: reserves numbers in bcm.
Source: Ministerstvo životního prostředí / Česká geologická služba Geofond.
27
Natural Gas Supplies and the Most Important Companies in the Gas Sector
Russian Federation Kingdom of Norway
Launch of Supply 1967 1997
Volume of Supplies (bcm/y,
2009)
5,099 3,0
Proportional Share (%, 2009)* 58,81 34,60
Resource Areas Mostly from the fields of
Urengoy, Yamburg and
Medvezhye
Fields Draupner E, Sleipner, Troll
A, Mikkel, Kristin and other
fields in the continental shelf of
the Norwegian Sea
Transit Countries Ukraine, Slovakia Germany
Conclusion of Current Contract October 1998, 2006** May 1st, 1997***
Contract Until 2035**** Until 2017
Volume of contract 8-9 bcm/y 53 bcm in total, ca. 3,0 bcm/y
* Zbylých 4,59 % představuje dovoz ze Spolkové republiky Německo, v objemu 571 mil. m³.
** In October 1998, a contract between Transgas, a. s. and OOO Gazexport was signed for the
supplies of 8 to 9 bcm/y of natural gas for the period of 15 years. Thee contract with a defined price
and transport route should run until 2013. In 2006, RWE Transgas, a. s. (successor to Transgas, a. s.)
extended the contract until 2035. This extension nevertheless did not include the definition of the gas
price or transport route.
*** With Statoil, Norsk Hydro a Saga Petroleum
**** This, at the same time, means the definite securing of the Czech Republic’s transit position until
this year, as one third of the natural gas supplied by Russia to Western Europe will continue to be
transported through Czech territory.
Source: T. Vlček; supply volumes and contracts according to Ministerstvo průmyslu a obchodu ČR,
2010g, s. 4-5; Kastl, 2008.
 Trade with gas is specific in that it proceeds on the bases of long term contracts, in spite of
the developing EU liberalization activities
 96% of natural gas supplies are provided by two companies.
◦ Moravske naftove doly, a. s. procures the supplies from domestic production. These
amount to less than 1% of the demand in total.
◦ RWE Transgas, a. s. has concluded contracts with OOO Gazprom Export, the supplier of
Russian gas, until 2035 and with a consortium of Norwegian producers (ExxonMobil
Production Norway Inc., Statoil Hydro ASA, Norske ConocoPhillips AS, TOTAL E&P NORGE
AS, ENI Norge AS) until 2017.
◦ VEMEX s. r. o. has contracts with OOO Gazprom Export until 2012 with a possibility of
further extension.
◦ Since 2008, other companies have also started to import natural gas to the Czech
Republic: Ceska plynarenska, a. s., which obtained the purchase contract for gas in
Norway (0.1 % of total Czech import of natural gas in 2008), company Lumius, spol. s r.
o., which buys natural gas mainly in Germany (0.5 % of total Czech import of natural gas
in 2008) and German company WINGAS GmbH & Co.KG. (1.7 % of total Czech import of
natural gas in 2008).
◦ Although the expansion of suppliers with natural gas becomes a modern trend, the
extent of contracts is still rather insignificant and it does not have a major impact on the
gas market. 29
 Since 2007 the gas sector is fully liberalised (98/30/EC, 2003/55/EC, 2009/73/EC)
 There were 122 licensed gas traders on 1. 1. 2011
 The Czech Republic is provided with gas supplies on the basis of the long term contracts
with producers, which limits its implementation of EU liberalization measures, but, on the
other hand, provides stability and guarantees to both exporters and importers.
 The Czech Republic will, therefore, with great likelihood remain an important transit
country, while the natural gas producers will continue using the Czech territory for transit
purposes, which is by itself a safeguard of the maintenance of supplies for its own needs.
 The long term contracts with suppliers, however, limit its liberalization efforts. If the
greatest part of natural gas is provided to the Czech Republic on the basis of the long term
contracts, intrastate liberalization and the growth of new traders would de facto face the
fact that one and the same gas is being traded only with more mediators in between.
 Almost all of the gas the gas traders sell comes from Transgas
 Liberalization is in that manner still unfinished and it will not take place in an effective
manner in the forthcoming period either.
30
 Czech Republic as EU gas transit country
◦ Geography
◦ Great infrastructure (still the only reverse flow system in
Eastern Europe)
◦ Czech and EU projects strengthen this position
◦ Enhancement of the strategic reservoirs
◦ Increase in consumption due to natural gas use in electricity
production and transportation
◦ Infrastructure developments related to SEP 2015
32
34
Current projects in the gas sector
1 –Stork II pipeline until 2020 (connection to Poland, 7 bcm to PL, 5 bcm to CR)
2 – Increasment of the connection of the underground reservoirs Tvrdonice and Dolni Dunajovice in the
Southern Moravia to the transit system
3 – North-South gas corridor enhancement and reverse flow capacity enhavncement (Moravia pipeline, 32 km,
14 bcm)
4 – Gazela pipeline (166 km, Brandov-Weidhaus, 33 bcm)
5 – pipelines to Austria (BACI)
6 – reservoirs development (0.45 bcm in Dambořice commissioned in 2016), Dolní Rožínka, Uhřice
5
6
Coal in the CR
Coal in the Czech Republic
Installed Capacity in the Czech Electricity Grid on 31 December 2012
Type of Power Station Installed Capacity (MWe) Percentage (%)
Thermal Power Station 10644 51.9
Gas Combined Cycle Power
Station
521 2.5
Gas Fired Power Station 750 3.7
Hydroelectricity 1069 5.2
Pumped-storage
Hydroelectricity
1147 5.6
Nuclear Power Station 4040 19.7
Wind Power 263 1.3
Solar Power 2086 10.2
Geothermal Power 0 0
Total 20520 100
Source: Energeticky regulacni urad, 2013, s. 11.
Coal Power Plants in the Czech Republic with more than 150 MWe of Installed Capacity
Power Plant Owner Installed Capacity Connected to the Grid Fired on Life
Expectancy*
Detmarovice CEZ, a. s. 800 MWe 1975 - 1976 Bituminous coal 2020-2030
Chvaletice Severni energeticka
a.s.
800 MWe 1977 - 1978 Brown coal 2020-2029
Kladno Alpiq Generation
(CZ), s. r. o.
299.1 MWe 1976, 1999 Bituminous coal,
brown coal
2045-2050
Komorany United Energy
pravni nastupce, a.
s.
239 MWe 1959, 1978, 1986, 1994,
1997, 1998
Brown coal** 2025
Ledvice II CEZ, a. s. 220 MWe 1966-1968 Brown coal 2015
Ledvice III CEZ, a. s. 110 MWe 1998 Brown coal 2040-2055
Ledvice IV CEZ, a. s. 660 MWe 2014 - 2015 Brown coal 2055
Melnik (II) CEZ, a. s. 220 MWe 1971 Brown coal 2015-2020
Melnik (III) CEZ, a. s. 500 MWe 1981 Brown coal 2015-2020
Melnik (I) Energotrans, a. s. 352 MWe 1961, 1994 - 1995 Brown coal ?
Opatovice Elektrarny
Opatovice, a. s.
378 MWe 1979, 1987, 1995 - 1997 Brown coal 2020-2030
Pocerady CEZ, a. s. 1,000 MWe 1970 - 1977 Brown coal 2029+
Porici CEZ, a. s. 165 MWe 1957 Brown coal,
bituminous coal**
?
Prunerov II CEZ, a. s. 1,050 MWe 1981 - 1982 Brown coal 2015-2023
(2040***)
Prunerov I CEZ, a. s. 440 MWe 1967 - 1968 Brown coal 2015-2023
(2040***)
Tisova I CEZ, a. s. 183.8 MWe 1959 - 1961 Brown coal 2020+
Tisova II CEZ, a. s. 112 MWe 1959 - 1961 Brown coal ** 2020+
Trebovice Dalkia Ceska
Republika, a. s.
174 MWe 1961, 1998 Bituminous coal,
light fuel oil
2015-2020
Tusimice II CEZ, a. s. 800 MWe 1974 - 1975 Brown coal 2035
1 – česká část hornoslezské pánve 2 - česká část vnitrosudetské pánve 3 - podkrkonošská pánev
4 - středočeské pánev 5 - mšensko-roudnická pánev 6 - plzeňská a radnická pánev
7 - boskovická brázda 8 - mšensko-roudnická pánev 9 - mnichovohradišťská pánev
38
Coal in the Czech Republic
Exploitable Reserves of Bituminous Coal
Mine Exploitable
Reserves
Production*
Life
Expectancy**
Number of
Employers***
Karvina**** 23,975 2,621 6.7 4,422
Darkov 12,216 2,651 4.1 3,264
CSM 29,200 2,475 10.7 3,494
Paskov 850 863 - 3,003
Total 66,241 8,610 - 14,183
* As of 2013
**Calculated as Exploitable Reserves divided by 3-year average production, both coke and
energy coal included
*** As of 2013; including supply companies
**** Created by joining former mines CSA and Lazy in 2008
Note: figures in thousands of tons; Exploitable Reserves as of Ministry of Environment of the
Czech Republic geological statistics; Life Expectancy in years. Mines Karvina and Darkov will
be connected in one mine from 2015. The expected year of definitive end of bituminous coal
production is 2040 according to Ministry of Industry and Trade.
Source: OKD, 2014, p. 7-11; OKD, a.s.; calculations of life expectancy by T. Vlcek.
1 – chebská pánev 2 – sokolovská pánev 3 – severočeská pánev 4 – česká část žitavské pánve
40
41
Exploitable Reserves of Brown Coal
Basin Company Mine
Exploitable Reserves
As of 1. 1. 2013 Life Expectancy
North Bohemian
Basin
Czech Coal Group
CSA 41,3 2017 (4,5) 2021 (3)
Vrsany, Sverma 259,7 2044 (8) 2055 (7)
Centrum 1,3 - In
total 302,3 - Severoceskedoly,
a.
s.
Tusimice 227,2 2030 (13) 2035 (10)
Bilina 154,4 2031 (9,5) 2036 (7)
In total 381,6 - -
Sokolovska
Sokolovska uhelna,
pravni nastupce, a.
s.
Jiri
142,9
2023 (5-6) 2034 (4)
Druzhba 2030 (4) 2034 (4)
In total 142,9 - The
Czech Republic in total 826,8 - Note:
Exploitable Reserves in millions of tons. Life Expectancy in years, possible annual production in
millions of tons in brackets.
Source: Energostat
Coal in the Czech Republic
42
 Coal is an essential source in the Czech energy and electricity mix
 Coal is the only energy source, in which we are self-sufficient in terms of energy
security
 Domestic production of lignite fully cover domestic consumption
 Hard coal is also a major export commodity of the Czech Republic
 Current problems of the coal sector will most likely not and will not have a
significant negative impact on the electricity sector of the Czech Republic, but
may be at risk of inaction respective companies and industries significantly
negative impact on the sector CHP
Coal in the Czech Republic
43
Coal in the Czech Republic
 Two problems:
 Financial crisis and general drop in economic production (hard coal)
 Territorial Ecological Limits on Brown Coal Mining (brown coal)
Limits after SEP 2015
 Decision transferred to RMP which states (p. 49):
 On 19. 10. 2015 the Government discussed the material "Further
procedures and solutions for the territorial environmental limits of
the brown coal mining in northern Bohemia" and issued Resolution
no. 827 to tackle the issue of territorial environmental limits.
 At Bílina mine the government approved changes in the territorial
environmental limits with the new mining limits set 500 m from the
urban area of the nearby municipality.
 At the ČSA mine the government left the territorial environmental
limits in force. But the coal will be conserved and protected and
new assessment of the situation will take place in 2020, taking
account the process of construction of new nuclear units.
Financial Crisis
 At this moment the bituminous coal
sector in the CR and CE is very negatively
affected by the world market
 CR: drop in prices, production and
closure of Paskov (31.3.2017)
 PL: drop in prices, production and
significant closures, miners striking, threat
of bankruptc, energy security
Nuclear Energy in the Czech Republic
Temelin NPP
 On August 3, 2009, CEZ, a. s. has released the announcement about opening a
call for tender for two new nuclear blocks for the nuclear power plant
Temelin.
 After awarded, the overall administrative tender process will last for roughly 7
to 8 years (together with the construction, 15 years), which means that the
connection of new blocks is estimated for around 2024.
 The tender’s finale and the signing of the contract by its winner was set at the
end of 2011, in October 2010 it was, however, decided that selecting the
construction works’ supplier must be postponed by 2013 for unpreparedness
of suppliers, which will naturally lead to the delay of the entire process.
 The function of the Government’s Commissioner for the nuclear tender CEZ,
a. s. was granted to Mr.VaclavVartuska, Special Envoy for Energy Security of the
Czech Republic.
 The price was expected to CZK 200-300 billion
Temelin NPP
Technical Characteristics of the Projects Proposed by Single Nuclear Tender Applicants
Company Westinghouse Electric
Company, LLC
Areva SA SKODA JS, a. s.,
Atomstrojexport, a. s.,
OKB Gidropress, a. s.
Project AP1000 EPR™ MIR 1200 (AES 2006)
Thermal capacity(MWt) 3,415 4,590 3,200
Electrical capacity (MWe,
net / gross) 1,117 / 1,200 1,590 / 1,700 1,113 / 1,198
Efficiency (%) 33 36 33.7
Capacity factor (%) 93 90.3 >98*
Number of cassettes in the
active zone
157 241 163
Number of rods in
cassettes
264 265 312
Number of steam
generators
2 4 4
* Such a high value results from shorter maintenance and refueling breaks and prolonged fuel campaigns.
Source: Bílý, 2011, p. 268; Company’s official documents; selected and modified by T. Vlček.
Temelin NPP
 Westinghouse Electric Company, LLC
◦ 67 % Toshiba Corporation (67 %)
◦ 3 % Ishikawajima-Harima Heavy Industries Co. Ltd.
◦ 20 % The Shaw Group (20 %, americká strojařská společnost )
◦ 10 % Kazatomprom NAC (kazašská státní společnost)
 Areva SA
◦ 73,03 % Commissariat à l'énergie atomique (franc. vládou financovaná technologická
výzkumná institutuce)
◦ 10,17 % francouzský stát
◦ 4,82 % korejská automobilka Kia Motors
◦ 11,98 % další společnosti, zaměstnanci a veřejně obchodovatelné akcie
 ZAO Atomstrojexport
◦ 44 % VPO Zarubežatomenergostroj (kontrolován Federální agenturou pro jadernou energii –
Rosatom)
◦ 6,2 % OAO TVEL (kontrolován Federální agenturou pro jadernou energii – Rosatom)
◦ 49,8 % OAO Gazprombanka
Temelin NPP
 March 2013
 Announcement of the order of participants for tender
 4 cathegories of review:
 Technology Price Safety ???
 AP1000 MIR.1200MIR.1200MIR.1200
 Overal: AP1000 80/100 points
 MIR.1200 66,5/100 points
Temelin NPP
 „While originally the project was due to the market price of electricity and other factors fully
economically recoverable, today are threatened all investments into electrical energy sources, whose
income depends on the sale of electricity on the open market..“ (Daniel Beneš, 10. 4. 2014)
 The price of electricity over the past 5 years decreased by 60% (4/2014 - the price of €
34/MWh, historical minimum)
 CO2 allowances are worth about 113 CZK (€ 4.2), the plan was at least 15-20 euro
 Neither the EU nor the Czech Republic at the moment does not plan to provide guarantees or
stabilization mechanism for the construction of low-carbon sources (contract for difference, etc.).
 A risk that the government will require higher dividend from CEZ on their projects.
 To the construction of two units in Temelin be economicaly recoverable, ČEZ would need either
electricity prices over 70 euros per megawatt hour (according Candole Partners least 115), or
state aid.
 "CEZ is capable of doing, but it constrain all investments in other programs, which the company
does not like." Václav Bartuška, government commissioner for Temelin, Hospodářské noviny, 15
June 2012
Temelin NPP
 CEZ has concentrated on Dukovany, whose license ended in 3/2016
 CEZ would like to operate EDU until 2035, about 20 years longer
Minister of Industry Jan Mládek said that he expected that the company will announce new
tender within five years.
And if everything goes well, it could be
even in two to three years,
said Pavel Cyrani,
Director of Strategy in CEZ.
Current situation
 ČEZ is preparing tender to allowWestinghouse to compete with
TVEL for return toTemelin (23.1.2016)
 Should there be a new tender for ETE, the French will participate
again (23.8.2015)
 „… Second, I believe that the decision not to declare the result of the
tender was correct. If you take the construction of a nuclear power plant
seriously, a tender is the last thing you should do. Nobody in the world
builds a nuclear power plant on the basis of a tender and no one in this
manner chooses a supplier of nuclear technology.“ (Kirill Komarov, 1st
vice president of Rosatom, 25.9.2015)
 EDU received life-extension permission for operation beyond 2015
for indefinite time (31.3.2016)
 https://www.sujb.cz/jaderna-bezpecnost/jaderna-zarizeni/jaderna-
elektrarna-dukovany/dulezita-rozhodnuti-k-provozu-edu/
 Vienna plans to ask EC for crossborder EIA
Current situation
 National action plan for the development of nuclear
energy in the Czech Republic
◦ Particularly in order to maintain continuity of
production in Dukovany the construction of new
units in Dukovany and its launch no later than in 2037
is crucial
◦ Based on the material, it is desirable to immediately
start preparations for the construction of one nuclear
unit at Dukovany and one inTemelin with the
possibilite of extending the scope to two blocks in
both plants
Current Situation (SEP 2015)
 Promote and expedite the process of negotiation,
preparation and execution of the construction of new
nuclear units at the existing locations of nuclear power
plants with a total capacity of up to 2,500 MW (20 TWh
annual production) in the period of 2030-2035 including all
necessary steps.
 Create conditions for extending the life-cycle of the
Dukovany NPP for 50 years, and if possible, for 60 years
(with respect to technology, security, economy and EU rules).
 Target any construction of new units around the expected
shutdown of EDU (ie. after 2035).
Current situation
 National action plan for the development of nuclear
energy in the Czech Republic
◦ 1) investment by the owner and operator of
existing nuclear power plants (CEZ) or its
fully/partially-owned subsidiary (vendor)
◦ 2) investment through private group of investors
(mankala model, strategic partner)
◦ 3) direct construction by the state through newly
established state company
Current situation
 During the visit of Xi Jinping in the CR the China General Nuclear and
Czech Energy Alliance signed Memorandum of Understanding:
 Content: cooperation on information on nuclear power plant procurement,
construction, commissioning, operation and maintenance, repair and renovation
of nuclear fuel cycle facilities, the training of nuclear power plant workers and
cooperating in European Utility Requirements (EUR) certification
 The Czech Energy Alliance was created in September 2015 and brings
together, under the leadership of CEZ subsidiary Skoda Praha, 13 other
leading Czech engineering companies:Alta, Doosan Ltd, Elektro Kroměříž, IBC
Praha, Kralovopolska RIA, Modrany Power, MSA, Sigma Group, Skoda JS, OSC,
Skoda Power,Vítkovice, ZAT and ZVVZ Group. One of the aims of the Alliance
is to partner with large foreign firms in supplies for the construction of nuclear
power plants.
 The Chinese company formally applied to EU in May 2015 for certification of
the Hualong One reactor design.
Current situation
 6 out of 9 approached companies replied and met Minister of
Industry and Trade for consultations:
◦ Rosatom (Russia)VVER 1200
◦ EDF (France) EPR 1650 MWe
◦ Westinghouse (Japan) AP1000
◦ KHNP (Korea) APR1400
◦ China General Nuclear Power (China) Hualong 1 1080
MWe (merger of CPR-1000 and ACP1000)
◦ Areva + Mitsubishi (France, Japan) Atmea 1 1100 MWe
Renewable Energy Sources in the CR
Power Utility Sector Development
 How to fight the problem of aging
elektricity production portfolio?
 1) Renewables and „New Way“
 2) Boost up of the production base and
„Old Way“
 The oldest energy sector on Earth
vs.
 New wave of development
 New sector,
perhaps the most dynamic
Why?
62
Renewables
 The sector responds to the global trend of combating climate
change, protecting the environment, reducing greenhouse gas
emissions and decrease imports of energy resources especially after
1989.
◦ Rapid growth in consumption of energy resources
◦ Interdependence in the relationship with foreign suppliers
◦ Contradictory an effort to retain as much autonomy from foreign countries using
nuclear power, domestic coal and, increasingly, renewable energy
◦ First symptoms caused by lack of coal
◦ Probable end of the hydrocarbon age in the 21 Century (exhaustion of coal, oil
and natural gas)
◦ Fighting the climate change
◦ Emissions reduction efforts
◦ UN and EU commitments to those organizations
◦ The process of liberalization of the electricity market
◦ Rising energy costs
63
Renewable Energy Development
 Two attitudes to REP:
 Low-carbon economy
◦ a priori does not reject various fossil energy sources
◦ the aim is to adapt the existing economy to low-carbon principle as much as
possible, i.e. minimum production of CO2 as the main greenhouse gas
◦ this approach does not exclude (on the contrary - supports) the use and
development of nuclear energy as an emission-free source
◦ renewables may have different meanings, but they are always more or less
complementary to the primary sources
 Environmental
◦ focuses on the word "renewable" and refuses basically any fossil fuel
◦ the target is complete transition to renewable energy
◦ there are currently many limits for complete transition to renewable energy, such
as the condition of human knowledge and technology, technical aspects and
financial costs
64
Renewable Energy Policies
CZECH EXPERIENCEWITH RENEWABLES
DEVELOPMENT
65
Obligations Resulting from the Membership in International Organizations
Obligation Obligation as Amended by
Reduction in greenhouse gas emissions by 8 % by 2012. Kyoto Protocol
A greater renewable energy share in gross final
consumption, reaching the level of 8 % by 2010 and the
level of 15 % by 2030.
EU Accession Agreement
(Athens, April 16, 2003)
A greater renewable energy share in gross final
consumption, reaching the level of 13 % by 2020.
Directive of the European
Parliament and of the
Council 2009/28/EC
Reaching a renewable energy share of 10 % in all sorts of
transportation displayed on gross final energy consumption
in transportation in the Czech Republic by 2020.
Directive of the European
Parliament and of the
Council 2009/28/EC
Emissions from the sectors not covered by the EU ETS will
not exceed 2005 levels increased by 9 % by 2020.
EU Climate and Energy
Package
Source: T. Vlček from publicly available sources
CZECH EXPERIENCE WITH RENEWABLES
DEVELOPMENT
 Act No. 180/2005 Coll. pioneered the term ‘green bonus’, indicating
“the financial amount increasing the market price of electricity that is
paid by the operator of the regional grid system or the operator of the
transmission system to the producer of electricity from renewable
sources, taking account of reduced damage to the environment resulting
from use of a renewable source compared to combustion of fossil fuels,
of the type and size of the production plant and of the quality of
electricity supplied”
 It obliges the operators of the regional distribution systems and the
operators of the transmission system “to purchase all electricity
from renewable sources eligible for promotion and to conclude a
supply contract, if a producer has offered electricity from renewable
sources”.
 „Assumption of responsibility for deviation pursuant to special regulation” is of
extreme importance as well, as the responsibility was put on CEPS for
maintaining the stability of the network in the event of unstable
production of electricity from renewables.
66
 The system of state promotion of renewables was set so generously that,
for example, the target of 1,695 MWe of installed capacity in photovoltaic
power plants, which the Czech National Renewable Energy Action Plan set
for 2020, has been exceeded already in 2010.
 The cause of this boom lies in a combination of reduction of investment
costs in photovoltaic and wind power plants construction on one hand and
excessively high preferential treatment through state support on the other
hand, which led to a significant development of the renewable sector and
proliferation of companies engaged in installation of domestic and industrial
power plants.
 While in 2005 the purchase price of electricity from photovoltaic power
plants was 6.04 CZK/kWh, the Energy Regulatory Office more than
doubled this value in 2006, to 13.2 CZK/kWh (which is about twelve times
the market price of electricity)
67
 An originally well-planned program was supposed to
motivate citizens to accept renewables, to bring them to
trust in their potential and also to increase renewable energy
share in total production and consumption of electricity in
the Czech Republic, in order to accomplish the required
commitments resulting from international agreements.
 In reality, however, the citizens and industry sector identified
the opportunity and prospect of easily obtainable and
guaranteed state money in the course of several years, while
photovoltaic plants, consequently, experienced an incredible
expansion.
 Not even the Energy Regulatory Office was capable to
manage the situation, since the law allowed it to lower a
purchase price of electricity from renewables by maximum 5
% per year.
 It is clear that it was impossible to react on this unexpected and unanticipated
development of photovoltaic (and wind) power plans in a timely manner by
developing the technical base of electrification systém.
 The „Renewable Energy Crisis“ was de facto triggered by the mentioned
discrepancy and it erupted on February 16, 2010, when the companies CEZ
Distribuce, a. s. and E.ON Distribuce, a. s. met the request of CEPS, a. s. and
stopped with the approval of applications for installation of new photovoltaic
and wind power plants into the network.
 The stop of approvals lasted until September 2011, and than again from January
2012 until the end of the year in Southern Bohemia and Southern Moravia.
69
Tab. 7.8: Installed Capacity of Photovoltaic Power Plants in the Czech Electrification
System
Year 2004 2005 2006 2007 2008 2009 2010 2011 2012
Inst.
capaci
ty
0.13 0.13 0.74 3.4 54 464.4 1,959.10 1,971.0 2,086.0
Note: data always as of December 31. Installed capacity indicated in MWe.
Source: Energetický regulační úřad.
Renewables
Total Expenditures for Photovoltaic and Wind Power Plants in the Czech Electrification
System in the Period 2010 – 2030
Gross Costs In Total 2010 – 2030
(mil. of CZK)
Share of Total
(%)
Direct costs of electricity
purchased in photovoltaic power
plant
509,916 72.6
Direct costs of electricity
purchased in wind power plant
44,836 6.4
Costs of the provision of sufficient
PpS
48,948 7.0
Costs of induced investments 18,035 2.6
Costs of additional regulatory
energy
80,380 11.4
In Total 702,116 100
Source: Zajíček, 2010, p. 66; modified by T. Vlček.
 In November 2010,Amendment No. 330/2010 Coll. and, in
December 2010,Amendment No. 402/2010 Coll. to Act No.
180/2005 Coll., on the promotion of electricity production
from renewable energy sources and amending certain acts,
were passed and entered into force on March 1, 2011.
◦ state would from now on support only those photovoltaic power
plants connected to the distribution network
◦ So called solar farms will be also cut of support, whereas the state
support will go only to the photovoltaic power plants placed on
roofs and buildings with installed capacity of no more than 30 kWp
◦ So called retroactive solar tax of 26-28% was introduced for all
photovoltaic facilities launched in 2009 and 2010
◦ In 2011, a purchase price of electricity from renewables was set on
7.5 CZK/kWh.
 These amendments were understood as a temporary solution
 A new act entered into force on January 1, 2013, as Act No.
165/2012 Coll. on supported energy sources
 The Act was closely tied to Directive 2009/28/EC.
 According to the National Renewable Energy Action Plan, the
connection of renewables into the network will be, from now on,
capped with a yearly deliberate capacity.
 Even though Directive 2009/28/EC understands the levels of the
National Action Plan as minimum, the new Act No. 165/2012 Coll.
understands them as maximum.
 These caps are, according to the National Action Plan, calculated
every year not only for the entire Czech Republic, but for single
regions as well. Should they reach the upper limit, no further
connection approvals would be granted until the following year.
 Support of photovoltaic power plants is recently limited to the
production capacity of less than 30 kWp that is located on the roof
or perimeter wall of one building attached to the ground via firm
foundations registered in the real estate registry.
73
 The amendments and the new act contributed to the
stabilization of the renewable sector.
 The price to be paid is, naturally, high.A rough suspension of
the sector and a significant change of terms led to the
bankruptcy of tens of companies trading with photovoltaic
technologies, while the state is financially burdened with
support to decentralized production and renewables for the
next tens of years.
 Renewables were depreciated in the public eyes to a great
measure and the likelihood that the obligation of a 13 %
renewable energy share in gross final energy consumption by
2020 will be accomplished is very low.
 In 2004, production of electricity from renewables reached
the figure of 2.61 TWh and a 3.80 % share in consumption.
 In 2012, production of electricity from renewables amounted
to 8.06 TWh, while the share in consumption was 11.43 %.
 In this relation, it depends on the point of view whether we
really speak of positives figures.
 Why this boom affects the overall price of electricity?
75
Share of price components for electricity supply to households in 2010
and 2014
Electricity incl. margin 42,27 % 30 %
Market operator 0,12 % 0,2 %
System services of
ČEPS
3,94 % 2 %
Renewables,
cogeneration and
decentralized sources
4,41 % 10 %
Electricity distribution
and transport
31,86 % 40,2 %
Ecological tax 0,72 % 0,6 %
VAT 16,67 % 17 %
Source: Energetický regulační úřad
Price of electricity
76
The development of contribution to the RES, CHEP and DS for end consumers
Year 2009 2010 2011 2012 2013 2014 2015 2016
Contribution
in CZK per 1
MWh
52,18 166,34 370,00 419,22 583,00 495,00 495,00 495,00
Renewable Energy Policies
 26.7.2013 – approval of the amendment of the current law on renewable energy
sources (another amendment in March 2016)
 Content:
 1) capping the contribution to RES at 495 CZK / 1 MWh (positive effect on
competitiveness)
 2) end of support for new sources and distributed generation of electricity (biomass,
bioliquids and biomethane, solar power, biogas stations) since 1. 1. 2014
 Support stopped since 1. 1. 2015 also to installations, which will have authorization to
be build at the time the act entered into force
 3) end of the aid will not cover high-efficiency combined heat and power production,
secondary sources of energy, and the heat produced from renewable sources
77
Renewable Energy Policies
 In the current centralized arrangement of electricity (and heat production) in the Czech
Republic, RES can never be more than just complementary
 Rearranging of the system would of course lead to changing the potential use of RES
 Renewable energy sources are and will be in the Czech Republic for a long time only
supplementak sources, their development has been artificially and rudely stopped
 It should be rigorously separated the different types of renewable energy sources, because
each has different characteristics in terms of production, distribution, resource base,
networking, etc.
 This fact can not be viewed quite negatively
◦ sharply dialectical nature of the current energy sector aims to increase the use of
renewable energy sources
◦ attention should be given to headlessness and irrational support (biomass)
◦ we should target areas where the resource base is almost for free (eg. waste)
◦ we should support and conceptually and rationally develop projects based on geographic
and national specifics of appropriate conditions and those that have future potential
78
Renewable Energy Policies
Thank you for your attention!
Questions?