Czech Republic - Country Commercial Guide
Energy

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2022-01-30

Overview

The Czech energy sector has been largely built around two large nuclear plants and a number of smaller conventional coal power plants. Nuclear and coal power plants provide primarily baseload power at a high level of utilization, while gas-fired units, reservoir hydro and pumped storage provide flexible generation. Resent rises in costs of carbon credits have made coal power plants almost financially inviable.

In 2020, Czech gross electricity production reached 81.4 terawatt-hours (TWh), while domestic consumption was around 71.4 TWh. The Czech energy mix was made up of 52.5 percent fossil fuels (40 percent lignite, 9.6 percent natural gas, 2.6 percent bituminous coal, etc.), 40.75 percent nuclear power, and 6.75 percent renewables (3.4 percent biomass, 2.27 percent solar, 0.65 percent water, 0.43 percent wind energy, etc.).

While the goal of EU funds is to support a sustainable low-carbon-emission economy and ensure energy security by utilizing alternative energies, the Czech approach is different. As described in the State Energy Policy, the future Czech energy mix will be primarily based on nuclear power with a goal of reaching 50% of the energy supply with nuclear. Due to EU regulations, the share of coal energy will decrease, but largely replaced by both one large nuclear project and potentially a series of small modular reactors.  The share of alternative energies will grow but its potential for becoming a backbone of the energy sector is questioned. 

National objectives:

Maintain energy independence and energy security
Cut greenhouse gas emissions by 40% by 2030 (compared with 1990)
Construction of one nuclear reactor at the current Dukovany NPP site by late 2030s


Unit: USD thousands

 

2017

2018

2019

 

2020

 

2021

(Estimated)

Total Local Production1)

3,520,000

3,739,000

4,000,000

3,600,000

3,600,000

Total Exports2)

8,121,800

8,682,199

8,367,056

7,061,385

7,500,000

Total Imports2)

6,729,929

7,330,727

7,413,742

6,302,434

6,500,000

Imports

from the U.S.

 

340,566

402,443

569,912

498,203

500,000

Total Market Size

4,911,871

5,090,472

4,953,314

4,358,951

4,600,000

Exchange Rates

20.884

20.158

20.158

24.94

21.79

Statistical data for NACE 28.11) and HS 8401-8416 2). Sources: Czech Statistical Office, Czech Ministry of Industry and Trade, Exchange rates: IMF

Leading Sub-Sector:

Coal still provides the majority of fuel used in Czech power generation. While coal’s phase-out is assumed in 2035-2038, coal-based energy companies already face difficulties due to the rising costs of carbon credits and other impacts of the EU’s Green Deal.

The Czech Republic has no significant production of natural gas or oil and is fully dependent on imports. The country is integrated into regional transmission systems and can purchase oil and gas from different countries based upon on market prices in Rotterdam or elsewhere. The majority of oil and gas is imported via Germany.

The Czech Republic has two nuclear power plants at Dukovany and Temelin, which delivered over 30.05 TWh of electricity in 2020. Both plants were designed and built in the 1980s and rely on Soviet-era technology. Russia provides fuel for both plants.  The reactors at Dukovany are expected to remain in operation until 2035, and Temelin’s reactors until the 2040s, but all will ultimately need to be replaced. The government has discussed an interest in small modular reactors technology, yet has expressed an unwillingness to be an early adopter.

Opportunities

The Czech government has placed a priority on nuclear power. The country’s June 2015 Czech National Action Plan for Nuclear Energy states that nuclear energy should constitute about 50 percent of the Czech energy mix by 2040. CEZ, the state-controlled operator of the current reactors, launched a tender for new reactors in 2009, but cancelled it in 2014. The Ministry of Industry and Trade (MOIT) later invited nine companies/consortia to discuss their interest in participating in a procurement for the nuclear power plant at Dukovany, five of which advanced. The companies/consortia were Westinghouse, Rosatom (Russia), KHNP (Korea), EDF (France), and CGN (China). In 2021, the Czech Government excluded Rosatom (Russia) and CGN (China) from the tender for security reasons and announced its intention to provide financial guarantees for the construction. Three companies, Westinghouse, EdF, and KHNP, were invited to complete a security questionnaire in advance of the formal tendering process in 2021, and the full tender should be released in early 2022. Reportedly CEZ requested pricing information for up to 3 reactors.

The European Union and the Czech Government support conservation efforts and increasing the use of renewable energy sources. To meet EU and Czech targets, the country will need to invest $3 billion annually through 2030. The EU has recently approved the Czech national recovery and resilience plan under NextGenerationEU, which represents EUR 7 billion investments for the Czech Republic primarily dedicated to the modernization of the energy sector and also renewable energy utilization.

Resources

Ministry of Industry and Trade, Energy Division:

https://www.mpo.cz/en/energy/

 

State Office for Nuclear Safety:

https://www.sujb.cz/en/

 

CEZ Group:

https://www.cez.cz/en/home

 

Czech Power Industry Alliance:’

https://www.cpia.cz/en/

 

U.S. Commercial Service:  Zdenek.Svoboda@trade.gov