Energy transitions and impact on the CEE region:
Case study of Energiewende and the Czech energy
sector
Filip Černoch
cernoch@mail.muni.cz
Energy policy of the EU
Energy transition - decarbonization
• Driven by the climate change
• Low-carbon policies are introduced (esp. in Europe)
• Uncertainty about the future – how the system based (largely)
on RES will look like?
• The energy sectors in the CEE region are rather conservative,
but are exposed to the external pressures (neighboring
countries, the EU)
Energy transition - decarbonization
Energiewende
Economic growth, power and energy
consumption, GHG emissions 1990 - 2017
Gross power production in Germany 1990 –
2018 by source, in TWh
Share of energy sources in gross German
power production in 2018
Impact of EW on the Czech Republic
Trading with electricity – price convergence
• Size of the German and Czech electricity market – 631TWh
and 86TWh (average for 2011-2015).
Wholesale price of electricity
0
5
10
15
20
25
30
35
40
Q1 and
Q2/2014
Q3/2014 Q4/2014 Q1/2015 Q2/2015 Q3/2015 Q4/2015 Q1/2016
Germany
The Czech Republic
Market signals – decreasing price of power
• RES subsidies drive the wholesale price of electricity down
(retail price up)
• Price accepted by the neighbouring countries
Market signals – volatile prices
• Electricity production in Germany in week 19 2019 (wind + solar)
Impact on Czech producers
• Producers face reduced revenues. (EBITDA of ČEZ decreased
from €3,5 bn. in 2009 to €2,5 bn. in 2015, EW one of the
reasons)
• Low variable cost generation portfolio (nuclear, hydro) – still
profitable company
• 88 % of electricity generated from low-merit or mid-merit
sources (coal 50 %, nuclear 30 %, hydro 5,5 %)
• What should be the investment strategy in this scenario?
Impact on Czech consumers
• Impacted by the import of cheaper electricity
Historical Prices of CZ Base CALs (Delivery periods)
15
20
25
30
35
40
45
50
1/1/2013
3/1/2013
5/1/2013
7/1/2013
9/1/2013
11/1/2013
1/1/2014
3/1/2014
5/1/2014
7/1/2014
9/1/2014
11/1/2014
1/1/2015
3/1/2015
5/1/2015
7/1/2015
9/1/2015
11/1/2015
1/1/2016
3/1/2016
5/1/2016
7/1/2016
9/1/2016
EUR/MWh
CAL-15
CAL-16
CAL-17
CAL-18
CAL-19
Impact on government
• Nuclear energy as a baseload source of energy questioned.
(Price, construction time, volatility).
• Nuclear is planned to replace decommissioning of 14 GW (out
of 24 GW total) of capacities in 2030.
SEPU 2015 – target structure of gross electricity production (2014 situation in
brackets)
Nuclear-fueled 46-58% (29%)
Renewables and waste 18-25% (13%)
Natural gas 5-15% (9%)
Hard and brown coal 11-21% (55%)
Operational flexibility of sources
Technology
Minimum power
(% of rated
power)
Ramp rate (% of
rated power per
minute)
Hot start-up time
(h)
Nuclear 50% 2% 24
Coal 30% 6% 3
Natural gas –
CCGT
30% 8% 2
Natural gas –
OCGT
20% 20% 0.16
Unscheduled flows
What about coal
power plants?
Unscheduled flows
Grid is not fit to accomodate 1 500 000 PV units and
23 000 wind turbines
Trades and flow of electricity 2014/2015
Sources
• BMWi (2015): Making a success of the energy transition.
• Clean Energy Wire
• Černoch et.al.(2017): Energiewende and the Energy Security of the
Czech Republic and Poland
• IEA (2019): World Energy Investment 2019
• AleaSoft (2019): European electricity markets panorama: Germany
• Clean Energy Wire (2019): Germany´s energy consumption and
power mix in charts