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Czech Republic Power Report Q1 2012
Business Monitor International, Jan 2012, Pages: 52
Business Monitor International's Czech Republic Power Report provides industry professionals and strategists, corporate analysts, power associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Czech Republic's power industry.
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The future of the country's power sector is largely dependent on nuclear and renewables, although gas has a key role to play over the medium-term, as it helps reduce reliance on coal in electricity generation. Solar power use has soared thanks to an over-generous subsidy scheme, which has now been revised in order to deliver more modest but sustainable growth.
Current investment plans suggest that generation will remain more than adequate, comfortably meeting the forecast steady growth in domestic demand and providing the basis for continued net power exports to neighbouring countries. Over the longer-term, the country aspires to significantly boost its nuclear power generation, with plans to add an additional 1.2GW of reactor capacity.
Key trends and recent developments in the Czech electricity market include:
- The significant solar addition to the country's electricity capacity has put unexpected pressure on the country's transmission grid which, in turn, is prompting investments by both CEZ and CEPS. In August 2010, CEPS announced plans to invest between CZK3bn and CZK4.5bn a year in the grid through to 2022, building new substations and 600km of new transmission lines. Most recently, CEZ has announced plans to invest CZK11.3bn (US$694mn) in 2011 alone, to strengthen its domestic distribution grid - an increase of 11% on 2010 investment.
- According to a new proposal from the Czech Ministry of Industry, the government may be forced to pay up to CZK11.7bn (US$641mn) in 2012 to help limit electricity price increases, which have been due to the increased supply of expensive solar power. The plan, which was due to have been discussed by the cabinet before the end of 2011, mirrors the amount disbursed in 2011 to cover for the country's solar subsidies. It should be part-financed through a 26% tax on solar plants, introduced in 2011, as well as by a 32% tax on free emissions vouchers. Additionally, energy prices are expected to see a further rise, increasing by an average of 4.3% for households and by 6.2% for companies, in 2012.
- Czech utility group CEZ has released technology supplier tender documents with a view of choosing a nuclear reactor supplier in 2013. Following several delays, CEZ appears to be keeping to its final timetable, with the deadline for technology bids to be submitted on July 2 2012, and a supplier to be selected 18 months later, by the end of 2013. Interest has been high, as CEZ is going to expand the capacity at the current Temelin nuclear plant by adding two reactors with a combined capacity of 1.6GW. According to Reuters, France's Areva (a joint venture between Czech Skoda and Russia's Atomstroyexport) and Toshiba-Westinghouse are all taking part in the tender.
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