This is a best prospect industry sector for this country. Includes a market overview and trade data.
Overview
The Czech energy sector is largely built around two large nuclear plants and several 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. Recent rises in costs of carbon credits have made coal power plants almost financially inviable.
In 2021, Czech gross electricity production reached 84.9 terawatt-hours (TWh), while domestic consumption was around 73.6 TWh. The Czech energy mix was made up of 54.03 percent fossil fuels (43.89 percent lignite, 9.89 percent natural gas, etc.), 40.41 percent nuclear power, and 5.56 percent renewables (3.31 percent biomass, 1.65 percent solar, 0.61 percent water, 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 percent of the energy supply with nuclear. Due to EU regulations, the share of coal energy will decrease, but largely replaced by both one (and possibly more) large nuclear project. Deployment of a series of small modular reactors is also under discussion in the Czech Republic. The share of alternative energies will grow but its potential for becoming a backbone of the energy sector is unclear.
National objectives:
- Maintain energy independence and energy security
- Cut greenhouse gas emissions by 40 percent by 2030 (compared with 1990)
- Construction of one nuclear reactor at the current Dukovany NPP site by late 2030s
Unit: USD thousands
|
|
2018 |
2019
|
2020
|
2021
|
2022 (Estimated) |
|---|---|---|---|---|---|
|
Total Local Production1) |
3,739,000 |
4,000,000 |
3,600,000 |
3,600,000 |
3,700,000 |
|
Total Exports2) |
8,682,199 |
8,367,056 |
7,061,385 |
7,500,000 |
7,500,000 |
|
Total Imports2) |
7,330,727 |
7,413,742 |
6,302,434 |
6,500,000 |
6,500,000 |
|
Imports from the U.S.
|
402,443 |
569,912 |
498,203 |
500,000 |
500,000 |
|
Total Market Size |
5,090,472 |
4,953,314 |
4,358,951 |
4,400,000 |
4,600,000 |
|
Exchange Rates |
20.158 |
20.158 |
24.94 |
21.79 |
23.97 |
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 most of the 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. Russia’s aggression against Ukraine set off Europe to speed up all efforts to replace fossil fuels not only to fight climate changes but also to fight the dependency on Russian gas and oil. Coal has been accepted as a short-term solution for the winter 2022/2023 and beyond.
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 market prices in Rotterdam or elsewhere. Most oil and gas are imported via Germany.
The Czech Republic has two nuclear power plants at Dukovany and Temelin, which delivered over 30 TWh of electricity in 2021. Both plants were designed and built in the 1980s and rely on Soviet-era technology. Russia currently 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 expressed an interest in deploying small modular reactor technology.
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 2008, but canceled 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 is open and will close in late 2022.
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 seven billion investments for the Czech Republic primarily dedicated to the modernization of the energy sector and renewable energy utilization.
Resources
Ministry of Industry and Trade, Energy Division:
State Office for Nuclear Safety:
CEZ Group:
Czech Power Industry Alliance:
U.S. Commercial Service Contact: Zdenek.Svoboda@trade.gov