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 2022, Czech gross electricity production reached 78.8 terawatt-hours (TWh), while domestic consumption was around 60.4 TWh. The Czech energy mix was made up of 53.60 percent fossil fuels (47.50 percent lignite, 5.86 percent natural gas, etc.), 40.95 percent nuclear power, and 5.46 percent renewables (3.34 percent biomass, 1.47 percent solar, 0.63 percent water, etc.). The first green hydrogen electrolyzer powered by solar energy in the Czech Republic started in May 2023 with production capacity of about 100 kilograms per day / 8,000 kilograms of green hydrogen per year.
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. Due to EU regulations, the share of coal energy will decrease but be largely replaced by both one (and possibly more) large nuclear reactors. The deployment of a series of small modular reactors is also under consideration by the Czechs. The share of alternative energies will grow but its potential for becoming the 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)
- Construct one nuclear reactor at the current Dukovany NPP site by late 2030s
Table: Market Size (US$, thousands)
|
|
2018 |
2019 |
2020 |
2021 |
2022 (Estimated) |
|
Total Local Production 1) |
3,739,000 |
4,000,000 |
3,600,000 |
3,600,000 |
3,700,000 |
|
Total Exports 2) |
8,682,199 |
8,367,056 |
7,061,385 |
7,500,000 |
7,500,000 |
|
Total Imports 2) |
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 8401-84162)
Units: $ thousands
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 triggered efforts in Europe to replace fossil fuels not only to fight climate change but wean off its 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 on 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 31 TWh of electricity in 2022. Both plants were designed and built in the 1980s and rely on Soviet-era technology. Russia provided fuel for both plants but will be replaced soon. 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 multiple small modular reactors to complement current and future large reactors.
Opportunities
CEZ, the state-controlled operator of the current reactors, launched a tender for new large nuclear 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 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 submitted bids in November 2022. The results of the tender are expected in early 2024.
In March 2022, CEZ announced it had designated an area of land at the Temelín NPP for the construction of the country’s first Small Modular Reactor (SMR), which could be deployed as early as 2030. CEZ has signed MoUs with multiple SMR technology vendors, including American firms. Other large Czech energy companies are interested in SMRs, particularly at sites traditionally used for coal-fired power production. Licensing will be a key factor in the timing for these deployments.
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 the name NextGenerationEU, which represents EUR seven billion in investments for the Czech Republic primarily dedicated to the modernization of the energy sector and renewable energy utilization. Demand for smart meters and other smart grid-related equipment/parts will increase as a result.
The Czech transmission system operator CEPS plans to invest CZK 46 billion in the development and renewal of the transmission system in period 2019 – 2028 with annual investments ranging between CZK 3.2 - 5.7 billion. While new transmission lines are the most expensive part of this modernization, digital and other advanced technologies to monitor and manage the transport of electricity from all generation sources will be in high demand.
Networking Events / Trade Shows
- September 14-18, 2023, Nuclear Days in Plzeň
- October 2, 2023, 3rd Nuclear Conference, Prague
- November 20-21, 2023, All for Power Conference 2023, Prague
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