The Energy Sector
and Energy Policy
of the Czech Republic
Tomáš Vlček et al.
Masaryk University Press
Brno 2019
The Energy Sector and Energy Policy
of the Czech Republic
Tomáš Vlček et al.
This monograph is the second, expanded and revised edition, with the expansion made possible by the Masaryk
University Specific Research Project “Perspectives of European Integration in the Context of Global Politics”
(MUNI/A/1025/2018).
Scientific Board of Masaryk University:
prof. PhDr. Jiří Hanuš, Ph.D. (Chair)
PhDr. Jan Cacek, Ph.D.
Mgr. Tereza Fojtová
doc. JUDr. Marek Fryšták, Ph.D.
Mgr. Michaela Hanousková
doc. RNDr. Petr Holub, Ph.D.
doc. Mgr. Jana Horáková, Ph.D.
prof. MUDr. Lydie Izakovičová Hollá, Ph.D.
prof. PhDr. Mgr. Tomáš Janík, Ph.D.
prof. PhDr. Tomáš Kubíček, Ph.D.
prof. RNDr. Jaromír Leichmann, Dr. rer. nat.
PhDr. Alena Mizerová
doc. Ing. Petr Pirožek, Ph.D.
doc. RNDr. Lubomír Popelínský, Ph.D.
Mgr. Kateřina Sedláčková, Ph.D.
prof. RNDr. Ondřej Slabý, Ph.D.
prof. PhDr. Jiří Trávníček, M.A.
doc. PhDr. Martin Vaculík, Ph.D.
Pre-publication review: doc. Ing. Václav Dostál, Sc.D.
1st
edition ©2013 Masaryk University Press, Tomáš Vlček, Filip Černoch, Veronika Zapletalová, Petra Bendlová
2nd
revised edition ©2019 Masaryk University Press, Tomáš Vlček, Ľubica Bodišová, Patrícia Brhlíková, Filip
Černoch, Jana Červinková, Gabriela Prokopová, Tereza Stašáková, Eliška Trmalová, Veronika Zapletalová, Petra
Bendlová
ISBN 978–80–210–9352–2
ISBN 978–80–210–6523–9 (1st
edition)
https://doi.org/10.5817/CZ.MUNI.M210-9352-2019
6 Table of Contents
Table of Contents
Abstract 14
Introduction 15
1. Actors in, and the Legislative Framework of, the Czech Energy Sector 16
1.1 State Institutions 16
1.1.1 The Ministry of Industry and Trade 16
1.1.2 The Ministry of the Environment 17
1.1.3 Monitoring Bodies and Other Institutions  19
1.2 The Legislative Framework of the Energy and Raw Materials Policy of the Czech Republic 20
1.2.1 2000 State Energy Concept 21
1.2.2 Strategic Documents in the New Millennium  22
1.2.3 State Energy Policy Update of 2015  25
1.2.4 Conclusion 25
1.3 Sources 25
2. The History of the Czech Energy Sector 28
2.1 The Three Periods of Development from 1989 to Today 28
2.2 The Restructuring Phase  29
2.3 The Privatisation Phase  30
2.3.1 Unipetrol 30
2.3.2 ČEZ 31
2.3.3 Transgas 32
2.3.4 Privatization of the Coal Sector 33
2.3.5 Issues Related to EU Accession–Liberalization of the Energy Sector 35
2.3.6 Temelín Nuclear Power Plant 38
2.4 The Third Phase of Development – EU Membership Through to the Present 39
2.5 Sources  41
3. The Coal Sector 44
3.1 Introduction to the Coal Industry 44
3.2 Deposits, Mine Production, Companies and Traders 45
3.2.1 Lignite 45
3.2.2 Brown Coal 46
3.2.3 Bituminous Coal 48
3.2.4 Exploitation of Coal and Trading 49
3.3 The Regulatory Framework of the Coal Industry 50
3.4 Demand Forecast 52
3.5 The Heat Supply Industry 53
7Table of Contents
3.6 The Issue of Extraction Limits 57
3.7 Coal War 59
3.8 Sources 62
4. The Oil Sector 66
4.1 Introduction 66
4.2 Deposits, Production, Companies and Traders 67
4.2.1 Deposits and the Production of Oil in the Czech Republic 67
4.2.2 International Carrier Oil 67
4.2.3 Processing Plants 68
4.2.4 Distributors 69
4.2.5 Traders in Oil Products 69
4.2.6 Use of Oil 70
4.3 The Regulatory Framework of the Oil Industry 71
4.4 Demand Forecast 72
4.5 Current Issues and Proposed Projects in the Czech Oil Sector 73
4.5.1 Infrastructure Projects 73
4.5.2 The Druzhba Pipeline 76
4.6 Summary 78
4.7 Sources 80
5. The Natural Gas Sector 83
5.1 Introduction 83
5.2 Deposits, Mine Production, Companies and Traders 84
5.2.1 Deposits and the Production of Natural Gas in the Czech Republic 84
5.2.2 Holders of Purchase Contracts 85
5.2.3 The Transportation, Transit and Distribution of Natural Gas 86
5.2.4 Important Actors on the Czech natural gas market  88
5.2.4.1 Transmission system operator 88
5.2.4.2 Distribution system operators 88
5.2.4.3 Storage system operators  89
5.2.4.4 Gas producers 89
5.2.4.5 Wholesale and Retail Traders  89
5.2.4.6 National Regulatory Authority 90
5.2.4.7 Gas Market Operator  90
5.2.4.8 Czech Gas Association 90
5.2.5 Underground Natural Gas Storage 90
5.2.6 The Use of Natural Gas 92
5.3 The Regulatory Framework of the Natural Gas Industry 93
5.3.1 The Legislation  93
5.3.2 The Energy Regulatory Office  94
5.3.3 Security of supply  94
8
5.4 Demand Forecast 95
5.5 Current Issues and Projects in the Czech Gasworks Industry 97
5.5.1 The development of the Transmission System and of Cross-Border Interconnectors 97
5.5.2 Decarbonisation of the gas sector 98
5.6 Summary 99
5.7 Sources 100
6. The Nuclear Sector 104
6.1 Nuclear Power Plants in the Czech Republic 104
6.2 Deposits, Mine Production, Companies and Traders 105
6.3 Spent Fuel and the Nuclear Waste Repository  107
6.4 The Regulatory and Safety Framework of the Nuclear Industry 110
6.4.1 The safety framework after the Fukushima accident and change in the perception of nuclear power
in the European Union 113
6.5 Demand Forecast 114
6.6 The long road to a new nuclear source of energy for the Czech Republic  116
6.6.1 First attempt, an unsuccessful tender for Temelín nuclear power plant 116
6.6.2 Second attempt, the new trajectory 119
6.6.3 Second attempt, who is going to pay? 120
6.6.4 Opposition to the new nuclear unit 121
6.7 New development in nuclear sector: smaller and modular 123
6.7.1 SMRs in the Czech Republic 124
6.8 Sources 124
7. Renewables 129
7.1 Introduction 129
7.2 Renewables Use for Electricity and Heat Generation 130
7.3 The Regulatory and Safety Framework of the Renewables Industry 135
7.4 Demand Forecast 137
7.5 Criticism and Development of Renewables 139
7.6 Current State of Renewables 141
7.7 Sources 144
8. The Electric Power Industry 147
8.1 The Electricity Grid of the Czech Republic 147
8.2 The Regulatory and Safety Framework of the Electric Power Industry 149
8.2.1 State Regulatory Framework 149
8.2.2 Supranational Regulatory Framework 151
8.3 The Transmission and Regulation of Electricity 153
Table of Contents
9
8.4 The Price of Electricity and the Trade in Electricity 156
8.5 Stability and Development of the Transmission System–Crisis or a Revolutionary Change in
the Electric Power Industry? 159
8.6 Sources 163
About the Authors 166
Table of Contents
10 List of Tables
List of Tables
2. The History of the Czech Energy Sector 28
Tab. 2.1: The Process of Electricity Market Liberalization  36
Tab. 2.2: Liberalization of the Natural Gas Market  37
Tab. 2.3: The Number of Electricity and Natural Gas Suppliers Changed During
the Liberalization Process and Upon its Completion  37
Tab. 2.4: Total Primary Energy Supply (TPES) by source (Ktoe) 39
3. The Coal Sector 44
Tab. 3.1: Coal Power Plants in the Czech Republic with more than 150 MWe of Installed Capacity 45
Tab. 3.2: Deposits, reserves and mine production of lignite in the Czech Republic 46
Tab. 3.3: Deposits, reserves and mine production of brown coal in the Czech Republic 46
Tab. 3.4: Exploitable Reserves of Brown Coal and Their Limits  47
Tab. 3.5: Deposits reserves and mine production of bituminous coal in the Czech Republic 48
Tab. 3.6: Development of OKD mine production and profits 49
Tab. 3.7: Shares of Solid, Liquid and Gas Fuels in Energy Resource Consumption According
to the State Energy Policy of the Czech Republic from 2004 and Updates from February 2010
and August 2012 (in %) 52
Tab. 3.8: The Balance of Thermal Energy from the Central Heating Supply System in 2010–2017 54
Tab. 3.9: Fuel Mix for Production of Thermal Energy in the Czech Republic in 2017 54
Tab. 3.10: CHP of Thermal Energy by sources in the Czech Republic in 2018 55
Tab. 3.11: Forecast Demand for Brown Coal According to EGU Brno 57
4. The Oil Sector 66
Tab. 4.1: Pipeline Routes in the Czech Republic 66
Tab. 4.2: Deposits, reserves and oil well production of oil in the Czech Republic 67
Tab. 4.3: The Oil Pipeline Network of the Czech Republic 68
Tab. 4.4: Oil Consumption in the Czech Republic by Sector 70
Tab. 4.5: Final consumption of oil products in the Czech Republic 71
Tab. 4.6: Gross oil consumption in the Czech Republic in 2010–2017 72
Tab. 4.7: The Shares of Fuels in Energy Resource Consumption in 2000 and 2017
and the Shares According to the State Energy Policy of the Czech Republic from 2004
and Its Update from 2014 (in %) 72
Tab. 4.8: Oil Consumption Prediction 73
Tab. 4.9: Central European Oil Infrastructure 75
Tab. 4.10: TAL Pipeline 76
Tab. 4.11: Oil Curtailment to the Czech Republic 77
11List of Tables
5. The Natural Gas Sector 83
Tab. 5.1: Natural Gas Supplies  84
Tab. 5.2: Deposits, reserves and production of natural gas in the Czech Republic 85
Tab. 5.3: Transmission system and underground gas storages in the Czech Republic 87
Tab. 5.4: Distribution system operators in the Czech Republic 89
Tab. 5.5: Underground Natural Gas Storage Reservoirs in the Czech Republic and their
Maximum Capacity as of March 31, 2018 91
Tab. 5.6: Natural Gas Consumption in the Czech Republic by Sector 92
Tab. 5.7: Gross gas consumption in the Czech Republic (in mcm) 95
Tab. 5.8: Gross gas consumption in the Czech Republic (in mcm) 95
Tab. 5.9: The Shares of Fuels in Energy Resource Consumption in 2000 and 2017
and the Shares According to the State Energy Policy of the Czech Republic from 2004,
including the 2014 Update (in %) 96
Tab. 5.10: Natural Gas Demand Prediction for the Czech Republic 96
6. The Nuclear Sector 104
Tab. 6.1: Review of ČEZ, a. s. Nuclear Power Plants as of December 31, 2012 104
Tab. 6.2: Deposits, reserves, and mine production of uranium in the Czech Republic 105
Tab. 6.3: Uranium Futures Price of Uranium Concentrate (U3
O8
) 106
Tab. 6.4: Scheme of the End of the Nuclear Cycle in the Czech Republic 110
Tab. 6.5: Regulatory and Safety Bodies for the Czech Nuclear Sector and Their Role 111
Tab. 6.6: The Shares of Solid, Liquid and Gas Fuels in Energy Resource Consumption
According to the State Energy Policy of the Czech Republic of August 2012
and Its Revisions of December 2014 (in %) 114
Tab. 6.7: Forecast of Uranium Concentrate Demand in the Czech Republic (tonnes per year) 115
Tab. 6.8: Technical Characteristics of the Projects Proposed by Single Nuclear Tender Applicants  117
Tab. 6.9: Limit costs incurred from 01/2015 in individual sub-milestones of the project 120
Tab. 6.10: Comparison of Some Economic and Environmental Advantages and Disadvantages
of Nuclear and Thermal Power Plants 122
7. Renewables 129
Tab. 7.1: The Amount of Solar Energy in the Czech Republic Striking a Square Metre
of Surface Bent at an Angle of 40° South (Wh/m2
/day) 131
Tab. 7.2: Yearly sum of global irradiation on horizontal surfaces in the Czech Republic 131
Tab. 7.3: Average wind speed in hundreds of meters in the Czech Republic 132
Tab. 7.4: Evolution of gross electricity production from RES and its share of gross national
consumption (TWh) 135
Tab. 7.5: Obligations Resulting from Membership in International Organizations 137
Tab. 7.6: Scenario of renewable energy share in final energy consumption by sector (%) 137
12
Tab. 7.7: Anticipated development of renewable energy sources in electricity sector (TJ) 137
Tab. 7.8: Scenario of renewable energy share in final energy consumption according to the Ministry of
Industry and Trade of the Czech Republic for the purposes of the Intrastate Plan (TJ) 138
Tab. 7.9: Development of the RES according to the Proposal of the Intrastate Plan of the Ministry
of Industry and Trade 138
Tab. 7.10: Installed Capacity of Photovoltaic Power Plants in the Czech Electrification System (MW)  140
Tab. 7.11: Total Expenditures for Photovoltaic and Wind Power Plants
in the Czech Electrification System, 2010 – 2030 140
Tab. 7.12: The difference between FIT and Auction mechanism 142
8. The Electric Power Industry 147
Tab. 8.1: Installed Capacity in the Czech Electricity Grid on December 31, 2018 147
Tab. 8.2: Gross Electricity Production in 2018 148
Tab. 8.3: Regulatory Organs in the Electric Power Sector and Their Role  150
Tab. 8.4: The Process of Electricity Market Liberalisation in the Czech Republic  151
Tab. 8.5: Total Consumption and Connection Sites That Have Changed Supplier  153
Tab. 8.6: A Simplified Division of Regulation Reserves as part of ČEPS System Services 155
Tab. 8.7: Maximum Regulation Reserves in the Czech Republic in 2019 155
Tab. 8.8: Share of Main Components of the Price of Electricity Supplies to Households
in 2019 (excluding VAT) 156
Tab. 8.9: Minimum and Maximum Volume Orders at PXE Exchange 158
Tab. 8.10: Parameters of short-term markets 158
Tab. 8.11: Example: the Construction Process of an Extra High Voltage Line  159
Tab. 8.12: Comparison of Different Types of Power Plant  160
Tab. 8.13: Forecast of the Future Course of Electricity Consumption in the Czech Republic (GWh) 161
Tab. 8.14: The Potential Construction of New Electricity Sources 162
List of Tables
14 Abstract
Abstract
This book addresses various aspects of the energy sector of the Czech Republic. There is hardly a more turbulent
or more sensitive sector of the Czech economy than the energy sector. As a result, its future is carefully monitored
not only by the political and economic elite of the country, but also by the general public.
The book The Energy Sector and Energy Policy of the Czech Republic is divided into eight chapters. The first
describes the key actors and legislative framework of the energy sector of the Czech Republic, including an analysis
of the Government, the Ministry of Industry and Trade, the Ministry of the Environment, and other legislative
and regulatory bodies and political parties. The second chapter introduces the rich and complicated history of
the development of the Czech national energy sector. The following chapters familiarize the reader with coal, oil,
natural gas, nuclear, renewables industries, and electricity and heat.
The intended readership consists of scholars and researchers, as well as experts in the relevant fields of study,
but the book will also serve as a guide for those outside academia who work with the topic daily, such as in public
administration. Finally, the general reader can make great use of this book to gain a thorough yet accessible
impression of the Czech energy sector.
15Introduction
Introduction
In 2013, a monograph of the same name was published, building on the success of its 2012 Czech edition.
Understood and meant primarily as a textbook for students of energy policy and the energy security of the Czech
Republic, the book quickly found an audience among the scholars, journalists, researchers and practitioners of
energy policy in the Czech Republic. The book covered all Czech energy sectors, their history, legislation, and
actors and thus gave readers a comprehensive and nuanced picture of the situation.
However, within the Czech economy, there is no sector more sensitive or more turbulent than energy. Thus,
some years after the publication of the first edition, the data and information it contained slowly became dated
and it lost its original reliability and competence. For this reason, a group of outstanding graduates and lecturers
of the International Relations and Energy Security program at the Faculty of Social Studies of Masaryk University
decided the monograph needed to be updated.
Dear reader, the outcome of our joint effort you hold in your hands.
The monograph has become an edited book but retains its original structure. Starting from a detailed historical
excursion through the development of the Czech energy sector, we put forward basic information regarding
individual energy commodities, electricity and heat, while we have devoted a part of the book also to foreign policy
issues. The book thus contains chapters on historical developments, actors and legislative background, and
the individual commodity sectors–coal, oil, natural gas, nuclear energy, renewables, and the electricity industry.
Since the energy industry is a complex topic, the book is supplemented by a number of tables showing and illustrating
the relevant subjects of discussion.
The ambition of this publication is not to be a complete guide to the subject at hand, and the authors had to,
for lack of space, leave out a number of issues. Accordingly, the book is not primarily intended for the direct use
of experts in the field, who, as part of their tightly delimited fields, have likely available more detailed and expert
works to consult. The target group is a broader public audience, predominantly including the academic, and it
strives to give a more comprehensive picture of the sector, to lay out the problems and provide knowledge for
further studies or contemplation. It is precisely this broader public that might feel a keen lack of sources of information
that would allow them to lead a decent debate addressing energy issues. For this reason, we hope this
publication will meet the stated purpose, and that it will be useful to the readers in their efforts to become acquainted
with the very interesting story of the Czech energy sector.
Brno, August 2019
Tomáš Vlček
Actors in, and the Legislative Framework of, the Czech Energy Sector16
Chapter 1: Actors in, and the Legislative Framework
of, the Czech Energy Sector1
Tomáš Vlček, Filip Černoch, Veronika Zapletalová
The energy sector of any state, including the Czech Republic, presents an active arena comprising the clash of
interests and priorities of a diverse spectrum of actors–starting with offices of state and continuing through to
private companies. Providing a concise characterization of at a minimum those actors that represent the state–
their competence, influence, interests and activities–is therefore a logical part of this book. In the second part
of this chapter this information will be supplemented by an assessment of the legal framework of Czech energy,
including the introduction and evaluation of basic conceptual documents and reports.
Given the broad subject matter, we will narrow the entire issue down to the period from 2006, when
the Government of Mirek Topolánek commenced, through to the end of 2018.
1.1	 State Institutions
On the following pages, the chief governmental bodies and relevant regulatory institutions responsible for
the management of the energy sector are introduced.
1.1.1 The Ministry of Industry and Trade
In terms of formal competence, this is the central government body that oversees the production, transport, and
trade of energy and the preparation of energy related strategic documents, primarily of the State Energy Concept,
the Integrated Raw Materials Policy, and the Use of Mineral Resources. It is also the central governmental body
for commodity exchange, except for issues under the purview of the Ministry for Agriculture, and also supervises
inspections in the energy sector. This ministry is also responsible for legislative coordination and for the implementation
of European law within the department. (Ministry of Industry and Trade, 2019)
Because of the authority entailed by the position, the Minister of Industry and Trade has a unique opportunity
to give Czech energy policy a specific shape. Unsurprisingly, the functioning of the Ministry of Industry and
Trade is significantly influenced by particular person who currently serves as minister.
Following the elections to the Chamber of Deputies of June 2–3, 2006, this job was given to the liberally-oriented
electrical engineer and lawyer Martin Říman (ODS). His appointment did not give rise to any notable political dispute,
but during his term of office he did arouse opposition, predominately from the coalition Green Party and the opposition
Social Democrats (ČSSD). They were, above all, dissatisfied with his role in preparing the National Allocation
Plan2
for 2008–2012, in which he arranged for the Czech Republic to receive an average 101.9 million tonnes of emission
allowances per year, a 25% increase on 2005. This opened hime to the charge that he was allowing an increase
in the emissions burden on the environment, although he never betrayed the actual wording of the election cam-
paignprogramofhispartybecausethe platformnevermentionedemissionlimits(seeEuropeanCommission,2006).
1		 This chapter makes substantial reference to the text The Czech Energy Policy as the Matter of Political Parties’ Decision-Making:
Aggregation and Articulation of Interests in terms of Their Intensity and Consistency (Černoch, Zapletalová, Vlček, 2010, p. 255-284).
2	 The key element of the EU ETS emission allowances trading system is that it decides how allowances will be allocated in the Czech
Republic and to what companies.
Actors in, and the Legislative Framework of, the Czech Energy Sector 17
He also received a great deal of criticism for supporting the breach of territorial limits on brown coal mining
in North Bohemia and consenting to the construction of two additional blocks at the Temelín nuclear power
plant. For these actions, Martin Říman won the (anti)award ‘Gobbler of the Year’ in 2006. But it is also true that
his actions were substantially based in the 2004 State Energy Concept (see Anketa Ropák & Zelená perla, n.d.).
Following the appointment of Jan Fischer’s Government on May 8, 2009, Říman was replaced as Minister of
Industry and Trade by a non-partisan, Vladimír Tošovský, nominated by the Czech Social Democratic Party (ČSSD),
also an electrical engineer, with broad working and professional experience in the field. During his year in office,
he pursued a more conservative energy policy based on domestic resources. The energy concept he proposed
accepted that mining limits would be breached, uranium mining extended, coal mining in Beskydy would continue,
and greater exploitation of nuclear energy would take place (see Kubátová, 2009).
Under the new Government headed by Petr Nečas, the post of Minister of Industry and Trade was assumed
on June 13, 2010 by the economist Martin Kocourek3
(ODS); therefore, after a long time a politician without expertise
and a professional background in the energy sector had the job. Nor did he hide his inclination towards more
robust exploitation of nuclear fuel and coal, and he remained in the post long enough to see through a new draft
State Energy Concept that called for expanding Czech nuclear power by 15 units with 1,000 MW capacity each.
Both experts and the general public strongly opposed the notion for the unrealistic calculations it relied upon
and the infeasibility of construction (see Lukáč, 2011). Kocourek lost his position in a financial scandal, in which
he practically confessed he had swindled his wife out of part of their joint property during divorce proceedings.
(see Ekonom, 2011)
Despite reservations on the part of the public4
, on November 16, 2011, the vacant ministry was filled by Martin
Kuba (ODS). He announced the preparation of a new, more balanced revision of the State Energy Concept, took
a long-term stance on the need nuclear power, including support for completion of the Temelín nuclear power
plant, and did not hide his disdain for providing further support for renewables.
During the rather turbulent 2013–2018 period, seven ministers rotated through the position, only one of whom
had enough time to really have an impact on energy sector of the country. Jan Mládek (ČSSD) served from January
29, 2014 – February 28, 2017 and cultivated a conservative approach to energy. Under his supervision, a 2015 State
Energy Policy Update was prepared that strongly emphasised nuclear energy and the coal industry. (Ministry
of Industry and Trade, 2015) Mládek initiated a debate on opening a new uranium mine at Brzkov, insisted that
the government take over the collapsing OKD hard coal company, and further sensitised the topic of territorial
ecological limits that restricted production in the North Bohemian and Sokolov brown coal basins by partially rescinding
them. (Baroch, 2014), (Černoch, Lehotský, Ocelík, Osička, & Vencourová, 2019)
If we look at the group of ministers that held this position in succession, there is apparent a major similarity in
their preferences and ideas on how the Czech energy sector should look in the future. In their eyes, it should be
based on local resources, coal mining, and uninterrupted support for the nuclear power industry. They also held
in common a restrained attitude towards renewables and reliance on savings and energy efficiency. Scepticism
about energy-environmental proposals coming from the European Union was prominent, with individual ministers
accepting them only to the minimum possible extent.
Aside from specific ministers, the Ministry of Industry and Trade can in any case be marked as one of the main
creators of the Czech energy sector, at least at the level of public administration. Its authority and influence rank
highly in the country, while playing a much lesser role in international forums and at EU level, sharing power, for
example, with the Ministry of Foreign Affairs.
1.1.2 The Ministry of the Environment
The other important body in the energy field is the Ministry of the Environment. This is the central body of the government
administration for protection of the environment in general, for operation of the National Geological
Survey, protection of the mineral environment, including mineral resources and groundwater, geological work,
and environmental mining supervision. It is also responsible for environmental impact assessments on industrial
3	 We should not however understate his activity in the Supervisory Board of ČEZ, a.s. in 2006–2010.
4	 Aside from the lacking education in the field, the new minister was reproached also for his previous alleged connection with the company
PSM, based on the principle of a pyramid scheme, as well as for his disputable working activity in the South-Moravian Region,
where he came into contact with one of “the ODS godfathers”, Pavel Dlouhý (see Kopecký, Štastný, 2011).
Actors in, and the Legislative Framework of, the Czech Energy Sector18
activities and their consequences, including cross-boundary, and stands behind the National Environmental
Policy. As part of the safeguarding and oversight activity of the Government, the Ministry of the Environment coordinates
activities of an environmental character performed by all ministries and other central administrative
authorities. (Ministry of Environment, 2019)
Like the Ministry of Industry and Trade, the Ministry of the Environment is strongly affected by the person at
the top. Following the 2006 elections, the post of Minister of the Environment was assumed by a non-partisan,
Petr Jan Kalaš. After some five months, on January 9, 2007, he was replaced by the then-president of the Green
Party, Martin Bursík. With his arrival, the Ministry of the Environment experienced a phase in which it played
a very active and important role within the Czech energy sector.
As a representative of the new party in the Parliament, the Green Party, Bursík’s aspiration to be Minister of
the Environment was logical. In relation to electoral success (6.29%, 6 MPs in the Chamber of Deputies), this position
then provided the Green Party with negotiating power above its weight. Such a position helped the Green
Party find a way to implement basically all the crucial energy points of its election campaign program, specifically
environmental tax reform, an Act on Promotion of Renewable Energy Sources, postponement of a decision on
the construction of new nuclear power plants, and departure from the policy of breaching environmental territorial
limits on brown coal mining5
(see Strana zelených, 2006, p. 14–18).
Passing the above-mentioned propositions would have most likely been impossible if the result of 2006 elections
had not been an impasse and if the coalition government had not been so dependent on just six Green
Party MPs. While the policy statements of the Green Party and of the other governing party, the Christian and
Democratic Union – Czechoslovak People’s Party (KDU-ČSL) were fairly similar (mainly as concerns territorial
environmental limits on brown coal mining, exploitation of renewables, and energy savings) and a consensus
could be expected even without the impasse after the 2006 elections, the consensus between the Green Party
and the leading government party, the Civic Democratic Party (ODS) on postponing the decision on construction
of new nuclear power plants and no longer breaching the territorial environmental limits on brown coal mining
should be to a great extent perceived as the outcome of the indecisive election and the need to cooperate
(see KDU-ČSL, 2006, p. 40). Proof lay in the fact that when the coalition started to collapse, the political power
of the Green Party dropped significantly. The first serious sign of this was in February 2009, when the Chamber
of Deputies rejected a draft amendment to the Environmental Assessment Act proposed by Bursík because of
a lack of votes from the coalition ODS and KDU-ČSL parties (see ČT24, 2009).
With the appointment of the Jan Fischer Government on May 8, 2009, another rotation of the post of Minister of
Industry and Trade occurred, making way for the non-partisan Ladislav Miko, nominated by the Green Party.6
This
educated biologist and environmentalist with long working experience in the Czech Environmental Inspectorate,
was on leave of absence from the position he had in the Directorate–General for the Environment during his mandate
at the Ministry. He returned to that position (see Aktualne.cz, 2009) not long after, on November 30, 2009,
when the position of Minister of the Environment was assumed by the non-partisan (he suspended his membership
in the Green Party for the function) Jan Dusík, also nominated by the Green Party. On March 19, 2010, he resigned
from the post over a dispute about the reconstruction plan for the Prunéřov power plant, and on April 15,
the Ministry of the Environment was taken over by Rut Bízková, who had some experience in the energy field–
somewhat surprisingly, however, as spokeswoman for ČEZ coal power plants and as Counsellor to the Deputy
Minister of Industry for energy, metallurgy, and civil engineering.
As in the Ministry of Industry and Trade, during the Nečas Government, two ministers rotated through
the Ministry of the Environment as well. The first of them, Pavel Drobil, left at the end of 2010 (having been in
the position, then, for about six months) over suspicions that he influenced investment tenders commissioned
by the State Environmental Fund of the Czech Republic (see Aktualne.cz, 2010) He was replaced by the political
scientist and lawyer Tomáš Chalupa, who devoted the initial year of his mandate to the dispute that then raged
over Šumava National Park and the problematic Green Savings Program.
5	 Among all parties succeeding at the 2006 elections, the Green Party had the best developed approach concerning the Czech
energy sector.
6	 Ladislav Miko accordingly stayed as Chairman of the Directorate for Nature within the Directorate-General for the Environment under
the European Commission. He got two months leave to perform the function of minister and, given the unanticipated delay in the early
elections, was forced to resign from that function.
Actors in, and the Legislative Framework of, the Czech Energy Sector 19
After the six month reign of Tomáš Podivínský (Nonpartisan, July 2013 – January 2014) Richard Brabec (ANO)
took over the position in January 2014, and he is still in office. The former CEO of fertilizer producer Lovochemie,
a company owned by Prime Minister Andrej Babiš, and a man reservedly aspiring for the Ministry of Industry and
Trade, was not welcomed to office by the environmental organization with optimism. (Novotný, 2017) As a minister,
he has never come up with truly ambitious plans or actions, and his ministry has been accused more than
once of being very responsive to the interests of his boss’s business empire. (see Pšenička, 2017; Pšenička, 2017b)
But he was also able to further or defend some significant pieces of environmental legislation. (see Bartoníček,
2017) In the energy sector, for example, his ministry supervised an ambitious program of subsidizing the exchange
of obsolete solid fuel boilers with new and less polluting ones in homes, financed from European funds.
(see Skoupá, 2017) His work so far has thus been accepted with mixed feelings among both industrial and environmental
stakeholders.
As already stated, the Ministry of the Environment is a key actor in the Czech energy sector, mainly as a result
of having the authority to interfere in the approval processes of various energy projects as well as having
an effect on the final version of legal acts relevant to the energy sector. It is also to some extent expected to be
a counterpart to the Ministry of Industry and Trade. One pursues the goal of a well-functioning industry and energy
sector, the other of ensuring that this affects the environment as little as possible.
This role was compromised to some extent in recent years when ministers like Miko, Bursík, and Dusík, educated
or experienced in the field and more or less dedicated to the effort to protect the environment, were replaced
by Bízková, Drobil, and Chalupa (all ODS). The party never hid its reservations about the “anti-business” sentiment
of the Ministry and openly called for “de-greening” the institution. “We want to proceed with a non-dogmatic,
non-ideological approach”, said Prime Minister Nečas (ODS) when launching Chalupa (see Dolejší, Frouzová,
2011). With Brabec, the situation seems to be slowly and modestly getting back to normal.
1.1.3 Monitoring Bodies and Other Institutions
The State Energy Inspection (SEI) performs monitoring functions at the prompting of the Ministry of Industry and
Trade, the Energy Regulatory Office or at its own initiative. Its responsibilities include the supervising compliance
with the Energy Act and the Act on Prices, regulating conditions for access to the network for cross-border exchanges
in electricity and the Act on the Promotion of Electricity Production from Renewable Energy Sources.
It also has the power to impose fines. (see Státní energetická inspekce, 2019)
The Energy Regulatory Office (ERÚ) is a body with a significant level of authority that stems substantially
from the European Union. The ERÚ sets the rules for business activity in the energy sectors as well as the rules
of trading. The Office establishes the business conditions of the electricity market operator, decides disputes
over access to the network, and performs a number of other functions. (see Energy Regulatory Authority, 2019)
The fairly stable relationship between these two institutions and their distribution ended with an amendment
to the Energy Act of August 18, 2011 (Act No. 211/2011 Coll.), which emerged primarily in reaction to the Third
Liberalization Package of the EU. This gives significantly expands the scope of authority of the Energy Regulatory
Office: “One of the new major competences will be inspection of the electricity and gas markets in order to decide
whether competition exists in these markets and the imposition of measures (in matters not within the scope of
the Office for the Protection of Competition). The ERÚ will have a number of oversight powers, including the right
to enter business premises, inspect business records, seal premises, etc. Finally, the ERÚ will monitor compliance
with the provisions of the Energy Act on Protection of Consumer Interests in Business Activities in the Electricity
and Gas Sectors” (see Pravda, 2011, p. 39).
The revision of the ERÚ’s position is also interesting from the perspective of significant changes that occurred
within its management. The then-Chairman of this “small Energy Ministry”, Josef Fiřt, was replaced on August
1, 2011, by Alena Vitásková. Her appointment provoked diverse reactions, mainly over her previous employment
as Chairwoman of Transgas and her stake in Vemex, partly owned by Gazprom (see Léko, 2011a). The main objection
was that the management of the principal energy regulatory body should not have such close ties with
specific (regulated) companies.
During her time in the job, Vitásková strongly criticized state support for renewable sources and used political,
diplomatic, and legal measures to limit this support. Heavily politicizing the ERÚ, she even campaigned (unsuccessfully)
in her last year in the position to be elected to the Senate of the Czech Republic. Her confrontational
managerial style and her unwillingness to resign from the office contributed to the changes in the structure of
Actors in, and the Legislative Framework of, the Czech Energy Sector20
the institution. In 2017, the ERÚ began to be managed by a collective body comprised of five directors, instead of
a single chairperson. (see Černoch, 2017; Klimeš, 2016; Lukáč, 2017; Dolejší, 2016)
The final important regulator of the Czech Energy market is the Czech Electricity and Gas Market Operator
(OTE). It evaluates and counts the consumption and supply imbalances of each market participant, organizes
the short-term electricity and gas market and energy balancing market, prepares market reports and consumption
forecasts. It administers the National Register of Greenhouse Gas Emissions as well as the trading portal
of electricity from the combined generation of electricity and heat. Unlike the other mentioned institutions, it is
a joint stock company, with a share of at least 67% to be owned by the state under law. (see OTE, 2019)
1.2	 The Legislative Framework of the Energy and Raw Materials Policy
of the Czech Republic
The founding strategic document and the flagship of legislative development in the first half of the 90s was
the Energy Policy of the Czech Republic, adopted at the beginning of 1992. It was largely declaratory in character,
primarily aimed at completing the processes of privatisation and restructuring within the energy sector, changing
the legal framework so as to involve new provisions, and promoting the formation of a regulatory body for
the energy sectors. The long-term aim of this document was to form an active price and tax policy, support competition
in the field of energy production, and harmonize Czech legal norms with those of the EU (see Stehlík,
2000, p. 152–156).
This whole framework then underwent changes in terms of basic legal acts. First, electricity, gas, and heat
supply legislation needed replacement as it had been set up for the conditions of central planning and the presence
of state companies. It was therefore incompatible at many points with the market-driven context of the newly
emerging joint stock enterprises and other energy market entities (see Neužil, 1995, p. 1).
Work on these acts had been taking place since 1992, but it was later decided to bring them together into a single
document, which was, moreover, supplemented by an amendment to the Act on the State Energy Inspection.
This body monitors compliance with energy laws, and exercises the right to impose fines and define7
their scope
(see Neužil, 1995, p. 2). The resulting Act on Business Conditions and on the Execution of State Administration
in the Power Industries and on the State Energy Inspection, usually called the “Energy Act”, was adopted on
November 2, 1994, and entered into effect on the first of January of the following year. In this way, it became
the third multifaceted legal act in the history of Czechoslovak, and later Czech, energy legislation.8
This “basic code” of Czech energy law has for twenty years now delimited the terms of business activity
within the energy sectors, and thereby in the sectors of electricity, gas and heat production and distribution,
in the public interest. It also defined the state’s role in relation to business entities and set the relationship between
energy suppliers and energy users. It was gradually supplemented by Act No.18/1997 Coll. on the Peaceful
Utilization of Nuclear Energy and Ionizing Radiation, Regulating the Requisites of Nuclear Power Plant Operation
and the Treatment of Fuel and Waste (the so-called “Atomic Act”) and Act No. 309/1991 Coll. on the Protection of Air
from Polluting Substances with an Impact on the Desulphurisation of Coal Power Plants. A bit later, in 1999, Act No.
189/1999 Coll. on Emergency Oil Reserves and on Emergency Oil Management came into law (see Neužil, 1995).
Also noteworthy is the preparation of the new energy policy in the second half of the 1990s, which came to an
unsuccessful conclusion. The first renewed attempt to arrive at a new version of the policy was made by Minister
of Industry and Trade Vladimir Dlouhý in a proposal which emphasised an entire line of environmentally-friendly
measures and focused on the creation of an independent energy monitoring office. The document did not however
even come under consideration by the Government.9
His work was continued by Karel Kühnl, who in a new
document counted on a fairly gradual wind-down to coal mining, the development of the nuclear power industry,
including completion of the Temelín nuclear power plant and modernization of the Dukovany nuclear power
plant, as well as pressure to liberalize the energy market. Due to early elections in 1998, deputies were unable to
7		 Even though a portion of that authority was transferred to the Energy Regulatory Office in 2011, in line with the adopted amendment to
the Energy Act.
8	 It followed Act No. 438 from 1919 On State Support During the Commencement of Systematic Electrification and the previously mentioned
Act No. 79/1957 on the Production, Distribution and Consumption of Electricity (for more details, see Neužil, 1995).
9	 For more details on the proposal (see Šálek, 2004).
Actors in, and the Legislative Framework of, the Czech Energy Sector 21
approve the document. The incoming Minister, Miroslav Grégr, in the end authorized the preparation of an entirely
new draft highlighting his own priorities.
1.2.1 2000 State Energy Concept
The 1990s were years of major change in the energy policies of the Czech Republic and those of the EU, toward
whose membership the country was heading. At the internal state level, there was a shift from a centrally regulated
energy trade to a significantly more market-like milieu accompanied by the gradual withdrawal of state intervention
in the form of such things as subsidized electricity prices. But environmental taxes had not yet been
implemented, the energy legislation regulating the monopoly and final electricity consumption had not been completed,
and the unfinished privatization of energy companies represented a major weakness. The lack of success
was then addressed by the policy of energy savings and more intensive exploitation of renewables.10
In line with
events at the EU level, the Czech Republic was compelled to respond to legislation associated with strong liberalization
efforts in the field of natural gas and electricity.
All these and many other changes demanded the preparation of a new conceptual document to regulate
the long-term future of the Czech Republic, resulting in the 2000 State Energy Policy of the Czech Republic (SEP
2000). This is perceived to have been the first truly detailed strategic and conceptual document of its kind, adopted
with clearly defined objectives and proposing the means to reach them. It also made a strong contribution to
closing the energy chapter as part of the EU Accession Negotiations.
The first issue the SEP 2000 framework resolved was rectifying the price and tariff structure of energy commodities
and associated services, mainly by removing cross-subsidies and charging less to households at the expense
of industry users. This solution was intended to bring progressively rising prices set by the market by
the year 2002.
The document also addressed the very sensitive matter of the final privatization of state shares in the key
energy companies, specifically in ČEZ, Transgas, ČEPRO, MERO, and Unipetrol. With the exception of the latter,
the state was, according to the Policy, supposed to maintain a degree of influence in each, and the intent
was strictly to transform Transgas, ČEPRO, and MERO into joint stock companies under full state ownership.
The privatization issue was also connected to the need for an independent regulatory body that would supervise
the Czech energy sector in the future.
The document responded to the  EU requests noted above by calling for regulations to be enacted that would
pave the way for an internal electricity and gas market, distinguished by the ability of users to choose the supplier
for these energy commodities. SEP 2000 also proposed some environmentally-friendly measures for the exploitation
of renewables, promoted saving measures, and emphasized the combined generation of electricity
and heat, with a portion of the document being devoted to support for domestic mining and a very optimistic future
for the nuclear energy sector.
At approximately the same time as the State Energy Policy was being prepared, a start was made on the new
Energy Act, as well, motivated primarily by an effort to adapt the Czech legal framework to bring it into line with
European requirements, therefore, mainly in accordance with the Directive concerning common rules for the internal
market in electricity (96/92/EC) and gas (98/30/EC). The resulting Act No. 458/2000 Coll. on Business
Conditions and Public Administration in the Energy Sectors and on Amendments to Other Laws (once again
called the “Energy Act”) predominantly regulated access of third parties to the network, introduced the term of
public administration, defined an authorization principle for constructing new energy capacity, set an obligation
to keep separate accounting across specific activities, and introduced gradual liberalization of the electricity and
gas markets. A noteworthy part of the law was an obligation to regularly evaluate current energy policy every two
years (see Šindler, 2006, p. 10–13). That was meant to prevent recurrence of the situation at the start of the 1990s,
when the political will to create a conceptual document of this sort did not exist and energy entities were therefore
forced to anticipate what the state had in mind for the future.
The Act also set up the Energy Regulatory Office for the electricity, gas, and heating sectors, the body responsible
for regulating the energy field. It also gave rise to the Czech Operator of the Electricity Market. The act
was naturally amended repeatedly, with the most notable changes in 2003 under Act No. 278/2003 Coll. (regulating
the schedule of electricity market opening) and Act No. 670/2004 Coll. in 2004 (see Šindler, 2006, p. 16).
10	 The summary is based on the document Energy Policy of the Czech Republic (see Vláda České republiky, 2000, p. 3).
Actors in, and the Legislative Framework of, the Czech Energy Sector22
Persistent market liberalization as well as accompanying protections for customers were then repeated in the revision
of the Energy Act from 2011.
Together with the Energy Act, Act No. 406/2000 Coll. on Energy Management was passed as well. This
document primarily aimed at reaching maximum efficiency in the production, transmission, distribution, and
consumption of energy, including rules for making the means of achieving those aims. The act includes obligations
that apply to construction companies and building owners, the labelling of appliances according to their
energy efficiency, and guidelines for preparation of the State Energy Concept and Territorial Energy Policy,
among other things.
Admission to the European Union was the pretext for the adoption of Act No. 180/2005 Coll. on the Promotion
of Electricity Production from Renewable Energy Sources.
In line with the provisions of the Energy Act, at the end of 2001 an evaluation was made as to whether the requirements
of 2000 SEP had been met, and the conclusion was that the majority of short- and long-term goals
had been accomplished. The unions and the entrepreneurial sphere, however, were asking for a comprehensive
revision of the policy in order to make the state’s long-term goals clearer, so that they would have a clear basis for
their business decisions. A decision on preparation of the updated State Energy Policy was classified as a priority
by the new government. This decision making was additionally burdened by persistent problems stemming
from the incomplete transformation of energy management, its environmentally still inadequate character, and
admission to the EU (see Ekonom, 2003, p. 39).
1.2.2 Strategic Documents in the New Millennium
The 2000 State Energy Policy was followed by several foundational papers, mainly the 2004 State Energy Concept,
the Paces report and the Updated State Energy Concept from February 2010 (SEK 2010).
The 2004 Energy Concept (SEK 2004) sharply revised the priorities that had priorly been emphasised, despite
the fact that they were already largely accomplished. Instead of the previously emphasized restructuring
and privatization, attention was turned to specific measures for the further long-term functioning of the sector.
SEK 2004 was, moreover, to a certain degree a necessary reaction to Czech obligations at the EU level (usually
with reference to the promise to produce a specific percentage of electricity from renewables) and the fact that
2005 was drawing closer, the year in which another evaluation of the 1991 coal mining limits was to take place.
Already by 2003, the body responsible for preparing the Concept was the Ministry of Industry and Trade,
headed at that time by Milan Urban (ČSSD). His Deputy, Martin Pecina (ČSSD), previously General Director of
the public company Hutní projekt Frýdek-Místek, also played a crucial role. The Ministry’s draft worked with six
different developmental scenarios that varied in terms of energy mix. The ministry itself opted for the one labeled
Green, finding it the best, and basically the only appropriate option. It emphasised maximal Czech independence
from fuel imports, to be achieved by using domestic sources and relying on the sustained self-sufficiency
of the Czech Republic in the field of electricity production. The specific tools for reaching these objectives involved
a broader use of nuclear energy and the construction of new coal power plants (connected to the possibility
of mining beyond the territorial limits). SEK 2004 projected a smaller increase in natural gas employment,
especially since it needed to be imported, as well as a rather limited role for renewable sources of energy (see
Ministry of Industry and Trade, 2004).
The Ministry of the Environment, headed by Libor Ambrozek (KDU-ČSL), developed strong reservations about
the Concept. Its office even prepared its own alternative version highlighting energy savings (for example, in
the form of thermal insulation for homes), more active use of renewables, and a higher level of natural gas use.
The key issues responsible for the clash between the Ministries were the breaching of territorial limits on mining
and continuing construction of power plants. Following the repeated postponement of discussion over the final
version of the document, accompanied by public protests organized by environmental organizations and representatives
of mining-affected municipalities, the two parties came to a compromise. It basically followed the trend
set by the Ministry of Industry and Trade, but dropped specific requirements referring to the breach of mining
limits and requested only their re-evaluation in the future.11
As far as nuclear energy is concerned, SEK 2004 continued
to count on the construction of additional (not three, but two) blocks.
11	 “The extracts on the breaching of territorial mining limits were left out of the Concept, replaced by the formulation of their rational evaluation
in the future,” said Ministry of the Environment spokeswoman Karolína Šůlová. (see Hospodářské noviny, 2004)
Actors in, and the Legislative Framework of, the Czech Energy Sector 23
All the main participants in the debate, Libor Ambrozek, Martin Pecina, and Milan Urban, had basically followed
the policy advocated by their parties, which however did not see the issue as a high priority. The entire
preparation of the concept instead differed in focus the ministries (where the Ministry of Industry and Trade was
generally inclined to a rather centralized character for the energy sector with massive sources and priority laid
on electricity production, the Ministry of the Environment was rather interested in energy savings, renewables
and landscape preservation) and the chief representatives (L. Ambrozek, as an environmentalist and a long term
opponent of the nuclear energy, and M. Urban and M. Pecina as proponents of “the traditional“ Czech energy
sector, underlining the state role and use of local sources) had.
Some of the factual matters as well as debates over the preparation of the concept are addressed in other
parts of this book, but here we may basically argue that it is precisely this concept that had brought the Czech
energy policymaking process to a close at the strategic and legislative levels. The elementary legal framework
treating this segment of the economy was created, one which stood shoulder to shoulder with its western counterparts.
The energy sector ceased to be seen as a field that could survive by being left to free market forces, using
state intervention only when necessary, and it became a more predictable, more stable system of updated
concept documents (policies, concepts) that showed the direction of the energy sector over longer time horizons.
Accordingly, since that time, we have been able to point unambiguously to two issues that will impact the Czech
energy industry in the future. These are, first, the still unsettled debate over the (non)breaching of coal mining
limits and, second, the local development of the nuclear industry.
This routine of cyclically preparing concept documents (energy policies) was broken in 2008 with the appearance
of a less typical document, the Report of the Independent Expert Commission for Establishing the Energy
Demands of the Czech Republic (the Pačes Commission). This paper came in the aftermath of disagreement
within the then-governing coalition, which had split over a nuclear sector matter and the continued use of coal
beyond the territorial limits. According to the official explanation, this report was supposed to be some sort “an
expert guideline” for the future Czech direction of the Czech energy sector.
The report emerged as a result of testy coalition negotiations between the Civic Democratic Party (ODS),
the Christian Democratic Union – Czechoslovak People’s Party (KDU–ČSL), and the Green Party in the second
Government headed by the Prime Minister Topolánek (from January 9, 2007). The parties taking part in the negotiation
process had the following preferences: ODS, represented in energy matters by Minister of Industry and
Trade Martin Říman, perceived nuclear energy to be an indispensable source and its development, therefore,
as the natural order of things, while support were overall rather turned to a substantial exploitation of coal as an
important energy source.12
Both were absolutely at odds with the interests of the Green Party, a future coalition
partner. KDU-CSL, as the third government party-to-be, took a fairly moderate, even ambiguous stance, rather
close to the ODS point of view.13
The resulting agreement formulated in the Government Decree for that reason unavoidably had to embody
a compromise between these interests, but it was accordingly a substantial success for the Green Party. Not
only did the Party force through a foundational part of its environmentally-relevant energy objectives such as
insistence on reduced greenhouse gas emissions, it also sustained its priorities in the nuclear sector and coal
mining limits: “The territorial limits on brown coal mining will remain. The Government will neither plan nor support
the building of new nuclear blocks and, after consultation with the opposition, based on a consensus of all
three political parties sitting in the Government, set up an Independent Expert Commission to assess the energy
requirements of the Czech Republic in the long term” (see Vláda České republiky, 2007).
ODS placed quite strong hopes in this commission, trusting that its findings, provided they were neutral at
least as concerned the nuclear sector, might serve it as a tool to make headway with the Green Party, which
could then change its position and thereby lead to compromise. The Pačes Commission was set up in January
2008, but the parties did not nominate representatives to it until April of that year. ČSSD, moreover, announced
that it would not participate in the Commission’s work at all. “There is no reason when our representatives would
only assist there in disputes between the Green Party and ODS, which the Commission will surely not be able to
avoid”, declared shadow Minister of the Environment, Petr Petržílek of CSSD (see Břešťan, 2007).
12	 Although these topics do not show up in the 2006 election campaign program. The energy sector was mentioned only in relation to
the need for a higher degree of energy efficiency within the economy (see ODS, 2006).
13	 Neither does his election program in any specific manner deal with the energy issue. Although Libor Ambrozek, an opponent on these
issues, was still an active member of KDU-ČSL, the party generally took a pragmatic stance (see KDU-ČSL, 2006).
Actors in, and the Legislative Framework of, the Czech Energy Sector24
The gradually released findings of the report aroused strong emotions. After releasing an initial incomplete
version, the Green Party blamed the Commission for its unprofessional and improper conduct (Party Deputy‑Head
Dana Kuchtová). Martin Bursík even labeled the entire commission biased since it included former Minister of
Industry and Trade Vladimír Dlouhy14
, whose previously written pro-nuclear pieces were not supposed to be considered
by the commission in a detailed manner (see Pavlovič, 2008). A highly negative reaction also came from
Martin Říman, who called it all “a trick” and an effort to sweep under the carpet those parts of the report that
were inconvenient for the Green Party (see Petržílek, 2009).
Given the fragile governmental coalition and apparent readiness of the Green Party to leave it if any fundamentally
pro-nuclear or pro-coal propositions were passed, the conclusions of the Pačes commission essentially
stayed on paper, with no direct or specific guidelines for their execution.
In terms of its contents, the Pačes report was a decent document that mapped the situation and needs of
the Czech energy sector. In terms of the traditionally sensitive points of the Czech energy sector, the report concludes
that nuclear energy has and should have its place in the Czech energy mix, although the text is not particularly
optimistic with regard to nuclear. But it also does not call for mining limits to be breached. (see Úřad
vlády ČR, & Nezávislá energetická komise, 2008)
The Energy Act establishes the regular updating of the State Energy Concept, which is why the Ministry of
Industry and Trade had started preparing its revision already during the commencement of the Paces commission,
resulting in the 2010 State Energy Concept, which at least in its initial phase did not raise any great public
or political attention.
Already by the start of 2009, the Ministry of the Environment, led by Green Party president Martin Bursík, had
commented on the practically completed draft, now however not insisting on complete elimination of the formula
concerning the need to extend nuclear energy in the Czech Republic, but narrowing his demands only to ensuring
their maximum safety. “We are not fundamentally against it, if our remarks are noted. We are not fundamentally
against nuclear energy,” said spokesman Jakub Kašpar (see Šrámek, 2009). In terms of the Green Party’s agenda,
it represented a dramatic shift, albeit the Green Party and ODS continued to have absolutely varying stances
on coal. It was precisely this issue, together with the continuation of uranium mining, that SEK 2010 addressed.
Aside from the by now traditional clash between the Ministry of Industry and Trade and the Ministry of
the Environment, the debate over SEK 2010 was also joined by ČSSD.
It first started with Milan Urban’s unhesitating request for the Government to involve the Social Democrats more
in the document´s preparation, then with a particular criticism coming from shadow Minister of the Environment,
Petr Petržílek. He described this piece of work as amateurish, poorly addressing issues of the environment, energy
efficiency, energy savings and the treatment of raw material and said it did not reflect the conclusions of
the Paces commission, the Integrated Raw Materials Policy of the Czech Republic, nor the country’s EU obligations
(see Petržílek, 2009).
The preparation of the State Energy Concept was, naturally, also significantly influenced by the change in
Government that happened when Topolánek’s cabinet was replaced by the caretaker government led by Jan
Fischer. Represented by Minister of Industry and Trade and former leader of ČEPS Vladimir Tošovský, this
Government worked on the final form of the concept, which emphasized maximum use of domestic raw materials,
including nuclear and coal, enhancement of energy efficiency and a pro-export orientation for the electricity
sector in the future. In terms of political viability, it was Tošovský who was in an advantageous position at the point
when his concept received support in the Government from ODS (which, according to its statements, nevertheless
stood against breaching of the territorial limits, although it had no issue in principle with coal itself) as well
as CSSD (which was rather inclined to continue breaching the limit but on condition it be decided in a referendum),
while the Green Party–following the departure of Minister of the Environment Dusík (of the Green Party)
and his replacement by Rut Bízková (ODS, formerly employed at the Ministry of Industry and Trade) had few options
to influence the concept’s final approval.
14	 The Commission consisted of: Chairman – Václav Pačes, President of the Czech Academy of Science; ODS – Vladimír Dlouhý (former
Minister of Industry and Trade, Counselor of Goldman Sachs Bank), František Hrdlička (Dean of the Czech Technical University
in Prague); KDU-ČSL – Aleš Doležal (member of the Association of Energy Managers), Josef Bubeník (Chairman of the Czech Energy
Agency); KSČM – Petr Otčenášek (independent counselor in the energy department), Miroslav Kubín (member of the Association of
Energy Managers); Green Party – Vladimír Vlk (energy auditor), Edvard Sequens (counselor in the energy field, Calla Association); ČSSD
– refused to nominate its representatives in the Commission.
Actors in, and the Legislative Framework of, the Czech Energy Sector 25
1.2.3 State Energy Policy Update of 2015
After multiple failures to update SEK 2004 because no minister ever stayed in office long enough to finish the concept,
a new strategic energy document was approved by the Government and published in 2015, labeled the State
Energy Policy Update of 2015 (SEPU 2015).
In this paper, six scenarios were developed and offered for evaluation, with the “Balanced” scenario chosen
as the basis for modelling the future energy mix. Under this scenario, the long-term preference of the country for
nuclear energy resonated strongly, with an expected increase of this technology in electricity generation from
32.5% in 2015 to 46%–58% by 2040. (Ministry of Industry and Trade, 2015) Surprisingly, SEPU 2015 did not offer
answer the question of how the new sources should be financed, the problem which led the 2009 ČEZ nuclear
tender to fail. Nor was the problem resolved in the National Action Plan for the Development of Nuclear Energy
in the Czech Republic, adopted that same year. Even though the Action plan listed three options–investment
through ČEZ, the existing owner and operator of the nuclear power plants, investment via a private investor consortium,
and direct construction by the state by means of the newly established state-owned enterprise, and
even though it expressed a preference for the first option, it did not suggest any way to persuade ČEZ to opt for
this seemingly unprofitable venture. (see Ministry of Industry and Trade, Ministry of Finance, 2015; Tramba, 2015)
Nuclear sources were to be supplemented by renewables (a planned increase of 10.7% to 18–21% in 2015),
natural gas (2.7% to 5–15%), and black and brown coal (54% to 11–21%). A significant decline in coal consumption
was to result from the anticipated process of tightening domestic and EU environmental regulations and mining
companies coming up against environmental mining limits in North Bohemia. In this regard it should be noted
that the SEPU 2015 vision of a slow phase-out of coal was published around the same time the partial recission
of the limits was announced, allowing companies to continue mining at the Bílina mine until approximately 2050.
(see Adámková, 2015)
Surprisingly, SEPU 2015 also broke a basic rule of Czech energy planning–the huge emphasis laid on a strong
export position for the country in electricity. From 2015, the country was to focus on producing just enough electricity
to meet domestic demand, maybe with some limited overproduction, but the years of massive electricity
exports seemed to be over. (Technický týdeník, 2015)
1.2.4 Conclusion
The legal delimitation of the energy sector requires one further note. The strategic concept (policy) is, under an
ideal scenario, supposed to set the basic state limits and priorities that would be embodied in every newly prepared
law and in the overall position of the governmental apparatus in regulating the sector. As far as the previously
described documents are concerned, adoption of this idea has lagged behind to some extent, even if
the State Energy Concept does indicate the Government’s stance on certain issues (usually when referring to
limits on coal mining); however, their real concord with the energy sector is generally rather poor. Usually, one
cannot sense that either of the governing parties in the coalition had anything to do with the wording, let alone
their hypothetical compliance with the opposition and potential to outlive more than one Government in unaltered
form. Instead of setting the direction for decades ahead, which would provide coordination for the public
and commercial spheres and serve as a reliable guideline for investors in their efforts to rationally allocate their
assets, these sorts of documents embody the current distribution of opinions and powers in the Government.
1.3	 Sources
Adámková, A. (2015, October 23). Vláda rozhodla o částečném prolomení limitů těžby uhlí. Euro, p. 47.
Anketa Ropák & Zelená perla. (n.d.). Retrieved from http://​www​.ropak​.detizeme​.cz/
Baroch, P. (2014). Ministr chystá nový uranový důl. Lidé se bouří. Retrieved from týden.cz:
https://​www​.tyden​.cz​/rubriky​/domaci​/ministr​-chysta​-novy​-uranovy​-dul​-lide​-se​-bouri​_323892​.html
Bartoníček, R. (2017, February 28). Richard Brabec, muž s legitimací číslo 002, stoupá po žebříčku ANO.
Hospodářské noviny, p. 3.
Břešťan, R. (2007, April 23). Atom, či zelená energie? Vládě napoví komise. Hospodářské noviny. Retrieved from
http://​hn​.ihned​.cz​/index​.php​?p=​500000​_d&​article​[​id​]=​20966620
Actors in, and the Legislative Framework of, the Czech Energy Sector26
Černoch, F. & Zapletalová, V. & Vlček, T. (2010). Energetická politika ČR v rozhodování politických stran:
agregace a artikulace zájmů z hlediska jejich intenzity a konzistence. Central European Political Studies
Review, Vol 12, No 4.
Černoch, F. (2017). Energy Transition: the Case Study of Germany and the Czech Republic - Habilitation Thesis,
unpublished. Brno: Masaryk University.
Černoch, F., Lehotský, L., Ocelík, P., Osička, J., & Vencourová, Ž. (2019). Anti-fossil frames: Examining narratives
of the opposition to brown coal mining in the Czech Republic. Energy Research & Social Science, p. 140-
149. https://​doi​.org​/10​.1016​/j.erss​.2019​.04​.011
ČT24. (2009, February 18). Bursík hrozí odchodem z koalice, poslanci mu neschválili novelu. Retrieved from
http://​www​.ceskatelevize​.cz​/ct24​/domaci​/45941​-bursik​-hrozi​-odchodem​-z-koalice​-poslanci​-mu​-neschvalili​
-novelu/
Dolejší, V. (2016, February 26). Žena, která naštve každého. Hospodářské noviny, p. 2.
Dolejší, V. Frouzová, K. (2011, January 11). Nový ministr Chalupa: puntičkář a klausovec, který ekologii neholduje.
Zprávy.idnes.cz. Retrieved from http://​zpravy​.idnes​.cz​/novy​-ministr​-chalupa​-puntickar​-a-klausovec​-ktery​
-ekologii​-neholduje​-1jl​-/domaci​.aspx​?c=​A110111​_1512479​_domaci​_jj
Ekonom. (2011, November 9). Ministr Kocourek rezignoval, premiér jeho demisi příjal. Retriveved from
https://​ekonom​.ihned​.cz​/c1​-53586810​-ministr​-kocourek​-rezignoval​-premier​-jeho​-demisi​-prijal
Energetika. (2003). K aktualizaci státní energetické koncepce. Energetika, No 2, p. 39.
European Commission. (2006). Národní alokační plán České republiky 2008 až 2012. Retrieved from
http://​www​.mzp​.cz​/C1257458002F0DC7​/cz​/narodni​_alokacni​_plan​/$FILE​/OZK​-NAP​_2-20081008​.pdf
Hospodářské noviny. (2004, March 10). Vláda schválila energetickou koncepci se změnami v těžbě uhlí.
Retrieved from http://​byznys​.ihned​.cz​/c1​-14084690
KDU-ČSL. (2006). KDU-ČSL Volební program: volby 2006 – klidná síla. Retrieved from http://​www​.kdu​.cz​
/getattachment​/Dokumenty​/Volby​/2006​/Volby​-do​-PSP​-CR​/Volebni​-program​-KDU​-CSL​-2006​---2010​
/Volebni​_program​_KDU​-CSL​_2006​_-_2010​_pdf​.pdf​.aspx
Klimeš, D. (2016). Deset milionů voličů Aleny Vitáskové. Hospodářské noviny, 10.
Kopecký, J. Šťastný, J. (2011, November 15). Ministrem průmyslu bude Martin Kuba. Nečas ho nechtěl do vedení
ODS. Idnes.cz. Retrieved from http://​zpravy​.idnes​.cz​/ministrem​-prumyslu​-bude​-martin​-kuba​-necas​-ho​
-nechtel​-do​-vedeni​-ods​-10k​-/domaci​.aspx​?c=​A111115​_150709​_domaci​_kop
Kubátová, Z. (2009, October 15). Vladimír Tošovský: Jednou to uhlí bude potřeba vytěžit. Hospodářské noviny.
Retrieved from http://​hn​.ihned​.cz​/c1​-38658610​-vladimir​-tosovsky​-jednou​-to​-uhli​-bude​-potreba​-vytezit
Léko, I. (2011a, July 20). Šéfkou ERÚ je plynová královna Alena Vitásková. Česká pozice. Retrieved from
http://​www​.ceskapozice​.cz​/domov​/politika​/sefkou​-eru​-je​-plynova​-kralovna​-alena​-vitaskova
Lukáč, P. (2011, November 2). Energetická koncepce státu je mimo realitu, shodují se experti. Hospodářské
noviny. Retrieved from http://​byznys​.ihned​.cz​/zpravodajstvi​-cesko​/c1​-53471450​-energeticka​-koncepce​
-statu​-je​-mimo​-realitu​-shoduji​-se​-experti
Lukáč, P. (2017, July 31). Alena se svatozáří. Hospodářské noviny, p. 10.
Ministry of Industry and Trade. (2004). Státní energetická koncepce České republiky. Retrieved from
http://​www​.mpo​.cz​/dokument5903​.html
Ministry of Industry and Trade. (2015). State Energy Policy of the Czech Republic. Retrieved from www​.mpo​.cz:
https://​www​.mpo​.cz​/assets​/dokumenty​/52841​/60946​/636123​/priloha001​.pdf
Ministry of Industry and Trade. (2019). Areas of Athority of the Ministry of Industry and Trade. Retrieved from
www​.mpo​.cz: https://​www​.mpo​.cz​/en​/guidepost​/ministry​/about​-the​-ministry​/competence​/areas​-of​
-authority​-of​-the​-ministry​-of​-industry​-and​-trade​--69279/
Ministry of Industry and Trade., Ministry of Finance. (2015). National Action Plan for the Development of
the Nuclear Energy Sector in the Czech Republic. Retrieved from www​.mpo​.cz: https://​www​.mpo​.cz​/assets​
/en​/energy​/electricity​/nuclear​-energy​/2017​/10​/National​-Action​-Plan​-for​-the​-Development​-of​-the​-Nuclear​
-_2015​_.pdf
Neužil, J. (1995). Česká energetika na začátku roku 1995. Energetika, 1995 (1).
Novotný, J. (2017, February 2). Na lovu nových kádrů. Euro, p. 34.
ODS. (2006). Podrobný volební program ODS pro volby 2006 – Společně pro lepší život. Retrieved from
https://​www​.ods​.cz​/volby​/weby​/2006​/download​/docs​/volebni​_program​_ODS​.pdf
Actors in, and the Legislative Framework of, the Czech Energy Sector 27
Pavlovič, R. (2008, June, 30). Bursík zpochybnil práci Pačesovy energetické komise. Český rozhlas. Retrieved
from https://​www​.irozhlas​.cz​/zpravy​-domov​/bursik​-zpochybnil​-praci​-pacesovy​-energeticke​-komise​
_200806302300​_vjanous
Pravda, P. (2011, October 17). Novela energetického zákona. Právo, 2011, p. 39.
Pšenička, J. (2017a, March 15). Babišově chemičce Precheza umazali pokutu lidé Babišova ministra, p. 53.
Pšenička, J. (2017b, April 11). Sobotka zjišťuje, proč Brabcův tým straní firmám z Agrofertu. Hospodářské noviny,
p. 72.
Skoupá, A. (2017, March 16). Startuje druhá vlna výměn kotlů. Rozdělí se 3 miliardy. Hospodářské noviny, p. 54.
Stehlík, J. (2000). Komentář k Energetické politice ČR. Energetika, 2000(5), p. 152-156.
Strana zelených. (2006). Volební program Strany zelených “Kvalita života” pro volby do Poslanecké sněmovny
2006. Retrieved from http://​strana​.zeleni​.cz​/247​/86​/file/
Šálek, M. (2004). Rozpočet není Mikuláš. Respekt, 2004, p. 4.
Šindler, P. (2006). Energetické právo v České republice (Non-published rigorous thesis). Masarykova univerzita.
Brno.
Šrámek, P. (2009, January 15). Ministerstvo životního prostředí překvapivě nežádá vyškrtnutí jádra z energetické
koncepce. ČT24. Retrieved from http://​www​.ct24​.cz​/ekonomika​/41757​-ministerstvo​-zivotniho​-prostredi​
-prekvapive​-nezada​-vyskrtnuti​-jadra​-z-energeticke​-koncepce/
Technický týdeník. (2015, November 3). Aktualizovaná Státní energetická koncepce schválena. Retrieved from
www​.technickytydenik​.cz: https://​www​.technickytydenik​.cz​/rubriky​/archiv​-technik​/aktualizovana​-statni​
-energeticka​-koncepce​-schvalena​_32859​.html
Tramba, D. (2015, January 8). Nová pravidla energetické hry. Ekonom, p. 32.
Vláda České republiky. (2007, January 17). Programové prohlášení vlády 2007. Retrieved from
http://​www​.vlada​.cz​/assets​/clenove​-vlady​/historie​-minulych​-vlad​/prehled​-vlad​-cr​/1993​-2007​-cr​/mirek​
-topolanek​-2/Programove​-prohlaseni​-vlady​_1.pdf
The History of the Czech Energy Sector28
Chapter 2: The History of the Czech Energy Sector1
Filip Černoch
Two basic trends are evident in the development of the Czech energy sector after 1989. First, there was the need
to replace the system of a fully controlled and centrally run energy sector,2
typical for the countries of former
Eastern bloc, with a system that reflected the geopolitical, political and economic interests of a newly emerging
state. This meant the need to privatize and liberalize the sector, to reduce its energy inefficiency, to restructure an
environmentally unsatisfactory coal sector, and to reduce disproportionally high energy spending in households.
The second fundamental factor was the EU accession process, successfully completed in 2004. As part
of that process, the Czech Republic had been adapting to the energy legal framework and the provisions of
the acquis communautaire, which had primarily left a mark on acts addressing environmental issues, market liberalization,
and control of the monopolistic behaviour of energy companies.
In this chapter, we will consider this course of development as well as try to capture some of the basic problems
encountered by the Czech energy sector at present, issues that will likely remain relevant in the immediate future.
2.1	 The Three Periods of Development from 1989 to Today
The post-revolutionary development of the Czech energy sector and energy policy may in principle be divided
into three basic phases. The first, which lasted roughly until the mid-1990s, led to the restructuring of the centrally
run energy system and its division into a number of smaller entities, often remaining in state hands. The second
phase involved privatization of the key energy companies, with the greatest success coming mainly in the gas
sector. In response to EU demands, in this phase came the initial steps of market liberalization with the goal of
customers being able to choose an electricity or natural gas supplier. The third phase, starting roughly in 2005
and lasting until today, involves a stable situation in which privatization has been brought to an end and the focus
is primarily on completing the liberalization of the energy market, further harmonizing with EU requirements, and
maintaining the energy sector in decent shape for the future.
In parallel with these key processes, naturally, continuous modification of the entire line of further fundamental
energy-related issues had been taking place – for example, the energy efficiency of the sector had been significantly
improved. At that time the energy demand of the Czech economy was two to three times higher than in
the rest of the EU. After many delays as a result of insufficient political will3
and limited means, a trend towards
energy production with cleaner, more modern and environmentally less damaging tools was set in motion. Once
the position of the Russian Federation as practically the exclusive supplier of energy materials to the Czech
Republic was weakened, one could also perceive a particular advance in Czech geopolitical security by, for
1		 The chapter in some places makes direct reference to the chapter Energy Policy, published in the book Public Policy in the Czech
Republic in the Years 1989-2009 (see Černoch, 2010, p. 141-167).
2	 The energy industry and energy sector are for purposes of this text understood to refer primarily to the electric power industry, gas
and heat supply sectors, to a relevant extent also coal industry and mining, as well as, peripherally, the processing of uranium ore.
The Czech Republic has a very limited volume of domestic oil and natural gas, which is why these sectors will be addressed only if they
have influenced or are currently influencing the Czech energy industry as a whole.
3	 Former Minister of Industry and Trade in the period 1998–2002, Miroslav Grégr, may serve as a typical illustration here, emphasizing
the use of nuclear fuel and domestic coal with an attitude verging on the disdainful towards investment into cost-saving technologies
or renewable sources.
The History of the Czech Energy Sector 29
example, building the IKL pipeline. The solution of problems associated with the restructuring of the coal sector
then acquired a social dimension, since the former had led to a reduction of mining, the shutting down of mines
and the dismissal of miners and workers in related professions.4
Two blocks of the second Czech nuclear power
plant (Temelín NPP) were built, and further projects are in preparation.
2.2	 The Restructuring Phase
At the beginning of the 1990s the energy sector of the Czech Republic faced a major task–to transform the centralized,
office-directed, energy inefficient, polluting and geopolitically dependent energy sector to the standards
common in Western Europe. The first step in this endeavour was to restructure the production and transmission
divisions of energy companies. The change affected approximately fifty state companies active in the field of fuel
and energy systems, which were transformed into joint stock enterprises.
Already in 1990, electricity distribution was separated from production, with eight regional energy distribution
companies, or REAS, formed from ČEZ5
, though the state kept a majority stake in them as well as in the parent
company.6
ČEZ from that point controlled only large power plants, some heating plants, and the 400 kV and
220 kV transmission systems.7
Over time, the heating supply companies that had been separated from ČEZ were
privatised (with majority shares in the hands of municipalities), as well as research institutes, construction-assembling
organizations and some smaller power plants.
Privatisation and restructuring in the coal sector was accompanied by notable social involvement by the state,
since the programmed reduction of coal use and its replacement with natural gas understandably led to a reduction
of mining and subsequent redundancies. As part of modifying the entire sector to attain acceptable environmental
standards, by 1998 the coal power plants had been desulphurised (and in some cases shut down)
(see Píha, 1998, p. 236–237).
The monopoly importer, transporter, and distributor of natural gas and other pipelined gases, ČPP8
, was restructured
as of January 1, 1994, leading to the separation of eight distribution companies with significant shares
in the hands of cities, municipalities, and the state. The transition system, a spinal pipeline network, underground
gas tanks, and dispatch remained under state ownership in the form of a re-established company, ČPP Transgas.
(see Energetika, 1999)
Direct state financial expenditures in the energy sector were gradually terminated. State subsidies were concluded
and the operation of energy companies was financed from that point on only out of their own assets and
bank loans. The latter, of course, caused pressure for increasing electricity prices, which until that time had been
kept at an artificially very low level. It had been set by the Ministry of Finance and did not correspond either to
production or transmission expenses, not to mention the corresponding profits.9
Moreover, the subsidies for solid
fuels were cancelled in 1994, liquid fuels in 1997 and thermal energy in 1998. (see Neužil, 1995)
In this initial transformation phase, the privatization difficulties typical of many transformations of post-soviet
economies in the region emerged, with the sale of state property to private entities lacking transparency in
a number of cases.
‘Demonopolisation’ of the entire sector was also delayed. Based on a Government Decree of Spring 1992, ČEZ
was, for example, meant to be ‘demonopolised’ no later than during the second privatization wave (see the succeeding
chapters), but that did not happen. Therefore, ČEPS, running the spinal network of the transmission
4	 To complete the picture, between 1990 and 2000, mining experienced a decline of 35%, or 50.4 million tonnes per year in the case of
brown coal, while in case of bituminous coal this reduction was from 23.3 million to 14.9 million tonnes per year. On the other hand,
labour productivity had risen from 325 to 630 extracted tonnes per person per year for bituminous coal (in the same period), and for
brown coal from 1,930 to 3,256 tonnes per person (also in the same period). (see Energetika, 2003)
5	 Czech Power Works, previously Czechoslovakian Power Works.
6	 Pražská energetická, a. s., Středočeská energetická, a. s., Jihočeská energetická, a. s., Západočeská energetická, a. s., Východočeská
energetická, a. s., Jihomoravská energetická, a. s., Severomoravská energetická, a. s.
7		 The transmission system and central dispatch were separated by 1999 and joined to ČEPS, while remaining under ČEZ ownership (see
Píha, 1998, p. 236-237).
8	 Czech Gas Company.
9	 Criticism also came from representatives of the World Bank, which made a loan to the Czech Republic conditional on ending this situation.
The complete liberalisation of prices occurred at the beginning of the 2000s.
The History of the Czech Energy Sector30
system, remained in ownership of ČEZ even after its accounting independence in 1999. It was indeed the electric
power sector that witnessed the emergence of an oligopolistic structure with a dominant company at its head,
where a financially more efficient giant, i.e. ČEZ, decides prices and smaller producers are forced to adapt (see
Invicta Bohemica, p. 18).
2.3	 The Privatisation Phase
As previously noted, the most visible feature of the second phase of the post-revolutionary development of
the Czech energy sector was the privatization of state shares in the dominant energy companies. This delicate
process, the realisation of which in the electric power sector and petrochemicals proceeded without much transparency
and in a tense atmosphere, was additionally burdened by EU liberalisation demands in the second half
of the 1990s. The entire period is for this reason characterised by the noteworthy clash of two opposing processes,
in which the gas sector was undergoing successful privatization but delayed liberalization, and by contrast,
the electric power sector was experiencing unmanaged privatization but rapid liberalization (see Výlupek, 2003).
The Government aimed to complete privatization in basically a single stroke at the end of 2001. The state at that
time still held a 67% share in ČEZ as well as in individual REAS (it had a majority share in five of them, while in PRE,
JCE, and JME it held a minority share) and a 97% share in Transgas, where in addition to the majority share in six
regional distributors, it had a majority share in PRP and JCP. The entire Unipetrol holding, including Chemopetrol
Litvínov, Kaučuk Kralupy and Synthesie, was to be sold as well (see Invicta Bohemica, p. 18).
The political sensitivity of the sector led to a situation in which the Government, aside from the criterion of
price, had set an entire line of limitations for applicants, thereby expressing concerns regarding the strategic,
security, and social impact of privatization. The future owners had to agree to a ban on the resale of purchased
assets for some period of time, not to restructure the companies without Government consent, and to abide by
conditions on the production maintenance of some power plants or requiring the consumption of brown coal.
Such a proviso, naturally, had its own impact on the price of the offered shares and the number of interested parties
(see Invicta Bohemica, p. 18–19).
2.3.1 Unipetrol
The privatization of Unipetrol was complicated by the Government binding the new owner of this heterogeneous
holding not to sell any of its parts over the first ten years. Of the three interested parties that finally decided to enter
the competition, the Austrian-Hungarian coalition OMV-MOL-TVK was rejected for formal reasons, leaving only
the offers from the company Agrofert of Czech entrepreneur Andrej Babiš, supported by the American company
Conoco, and the British Rotch Energy, disadvantaged by its lack of experience in the petrochemicals field. Although
the offers worked in favour of the latter, which was willing to pay 453 million EUR for the holding, in comparison to
Agrofert’s 361 million EUR, it was the Czech company that was finally chosen. A questinable clarification was that
Agrofert was the greatest taxpayer in the Czech Republic, whereas Rotch Energy was a mere speculator and not
a strategic partner (see Invicta Bohemica, p. 19).
The problems related to Unipetrol’s privatization, however, persisted. On September 30, 2003, Agrofert announced
that due to changes in circumstances which had an impact on its ability to meet the privatization requirements,
it would not buy the share in Unipetrol and asked to negotiate a lower price and change its strategic partner
to the Polish firm PKN Orlen. Vladimír Špidla’s government for that reason decided to cancel the agreement and
start a new privatization round.
The new round launched at the end of 2003 attracted the abovementioned PKN Orlen, again in cooperation with
Agrofert, as well as Conoco, then the Hungarian firm MOL and British-Dutch Shell. The first applicant, although in
collaboration with the already once problematic Agrofert,10
then obtained the state share for 14.7 billion CZK.11
10	 The Partnership of PKN Orlen and Agrofert eventualy terminated with a number of court proceedings exactly concerning ownership
issues related to Unipetrol.
11	 Already at the end of 2005, Unipetrol’s privatization, however, erupted into a scandal with international reach, related to the suspicion
of corruption both on the Polish and Czech sides. Locally the key moment was TV Nova’s news report which videoed the meeting of
the Head of the Prime Minister’s Office (then Jiří Paroubek’s office), Zdeněk Doležal with the Polish lobbyist Jacek Spyra, where Doležal
allegedly asked for a five million bribe for privatization in PKN Orlen’s favour. (see iHned, 2009)
The History of the Czech Energy Sector 31
2.3.2 ČEZ
The privatization of ČEZ was no less complicated. The Government was ideally anticipating CZK 300 billion from
the sale12
, a great sum of money, at least in view of the conditions attachend, such as a fifteen-year obligated
take‑off of brown coal from dedicated domestic mines and the requirement to keep a minimum share of electricity
production from nuclear sources.13
Given the nature of the target company, practically every leading electric power
company in Europe joined the contest. The unambiguous favourite was the French monopolist and the strongest
electric power company in Europe, Electricite de France (EdF), with vast experience in the nuclear industry.
The German companies RWE and E.ON proved to have quite strong potential as well, but the weak point of
the first of these was its agreement with the German government to terminate the nuclear program, while E.ON
was unofficially handicapped by a previous decision to stop importing Czech electricity to Germany. British
International Power (then-owner of the Opatovice power plant) and British Energy allegedly also had modest
chances. The American companies AES, NRG and Energy Corp. made marginally interesting offers, and the chances
were not high for the German-French EnBW, Italy’s Enel, Spain’s Union Fenosa, or Belgium’s Electrabel (see
Zajíček, 2001b, p. 8).
In preparing the list of companies eligible to even enter the tender, though, a very surprising turn of events
took place. Only EdF, Electrabel, the consortium of Enel and Iberdrola, and the consortium of International Power
and NRG were eligible to submit offers.
The privatization process progressed in similarly ambiguous fashion as well during the actual submission of
the envelopes containing the offers. EdF eliminated itself in a very unclear manner, as its representative stayed
too long in the canteen of the National Property Fund and missed the deadline by a couple of minutes, and its offer
encompassed a significant number of conditions in the case of the potential purchase. British International Power
was also eliminated for not meeting the formal requirements and, moreover, was abandoned by its American
partner NRG due to the complicated situation on the domestic market. The subsequent support of E.ON and
British Energy proved to be insufficient substitution, and they were not individually called to submit their offers.
Enel submitted an offer independently as well, while the final participant, Electrabel, withdrew on its own initiative
on the pretext of a non-transparent tender. Given the set of restrictions noted above on the potential owner
of the company, it was no surprise that the only unproblematic offer (EdF) proposed, in the Government’s terms,
the very low price of 135 billion CZK, prompting the Ministry of Industry and Trade to invalidate the entire tender.
“After the first unsuccessful round of privatization in the electricity sector, another attempt came as soon as
December 2001. Although it was clear that the conditions accompanying this sale were rigorous and restricted
the investor for a number of years, not only did the Government not compromise on them, but it insisted on
a minimum price of 200 billion CZK for ČEZ, including the transmission system and six transmission companies”
(see Geussová, 2002, p. 18). The Government thus invited only two companies into the new round: Enel and EdF.
These actors were willing to accept minimum price only on condition that the terms be measurable relaxed,
something the Government rejected, and so the privatization process once again came to an unsuccessful end
(see Geussová, 2002, p. 18).
It seems very hard to judge the entire privatization process at least moderately optimistically. During its realization,
the Government sought to attain several goals at once, starting from sustained operations of nuclear
power plants and (indirectly) the domestic coal sector, to employment in the energy sector and socially beneficial
activities, to protection of “the national silver” from unwanted foreign buyers, through to insistence on the maximum
price. All of that, moreover, spiced with the tender’s lack of transparency, the selective choosing of which
companies could enter the tender and a lack of understanding of the true value of the energy property. This led
to the collapse of the entire sale and to a loss of trust by foreign investors that the state was even capable or willing
to sell ČEZ in a principled manner.
12	 See, for example, the statement of the then Deputy Minister of Industry and Trade, Zdeněk Vorlička: “If you take a look at the yearly profit
of the Czech energy sector, then the sum of, for example, 300 billion CZK would not seem that much”. (see Zajíček, 2001a, p. 12).
13	 Next to the highest offered price, further terms which the Government set for privatization were not officially released and they ended
up in the media only as a result of a leak. The Ekonom Weekly, for example, informed about the requirement to take a yearly amount of
27.74 million tonnes of brown coal from Northern and Western Bohemia for fifteen years and the condition to produce yearly at least
50.8 terawatt hours of electricity for ČEZ in the years 2005–2012. There was, moreover, the possibility of imposing a fine in the amount
up to 100% of the purchase price. (see Geussová, 2001, p. 17)
The History of the Czech Energy Sector32
The complicated situation was finally resolved by the realization of an idea proposed (mainly) by Minister of
Industry and Trade Miroslav Grégr to form a strong domestic energy entity following the example of France’s EdF.
Following the unsuccessful privatization, Zeman‘s government made an offer to ČEZ that it would buy its shares
in REAS in exchange for a 2/3 share in the Czech transmission system.
In 2002, however, this proposal was suspended by the Office for the Protection of Competition, which thwarted
the plan to form an energy monopoly. The whole transaction was limited by several conditions. In the first
place, it ordered ČEZ to get rid of REAS in which it had a minority share (Pražská, Jihočeská and Jihomoravská
energetická) and one in which it had a majority stake. Instead of controlling of the entire distribution, the company
was to maintain control of only four REAS. The Anti-Monopoly Office decided it was necessary as well to sell
the remaining 34% of ČEPS stocks held by ČEZ, although it did not forbid its takeover by the state.14
Instead of the original scenario according to which ČEZ was intended to obtain a strong European partner that
would guarantee the company’s success on the European market, the consolidated company gained the potential
to become a distinctive European actor on its own. But by doing so, the Government gave up on the quick and
efficient liberalization of the Czech electricity sector and left a very strong structure which for end users (at least
according to some experts) meant a higher electricity price and other negative outcomes inherent in a monopolistic
market. “We can call it a Czech EdF”, was the frank description of the situation given by Minister of Industry
and Trade Milan Urban in 2003, by which he quite openly revealed the Government’s priorities (see Zlámalová,
2003a, p. 9). The company’s position was then confirmed as well by a new decision of the Anti-Monopoly Office
in 2005, according to which the company could keep an interest also in one desired distribution company15
in
which it had a majority share (see ČEZ, a. s., 2005).
2.3.3 Transgas
The privatization of Transgas and the gas distribution companies, by contrast, proceeded more straightforwardly.
A simpler ownership structure in which the state had full control of Transgas and six out of the eight distribution
companies (all except Jihočeská plynárenská, owned by E.ON, and Pražská plynárenská, controlled by the City
of Prague, including a minority state interest), proved to be a great advantage, so it became unnecessary to deal
with minority shareholders.
Six companies had shown an interest in Transgas, among them the consortium of RWE Gas/Wintershall
as favourite, already then invested in Pražská plynárenská (RWE) and Středočeská and Severočeská plynárenská
(Wintershall), among others. The German company E.ON did not have as good a position, holding stakes
in Jihočeská, Západočeská, and Jihomoravská plynárenská and generally striving to prominently expand into
the Czech Republic (in the end joining the contest together with Duke Energy). SNAM/Ruhrgas/Gaz de France
were interesting candidates, bringing into the competition a mixture of German and French ownership. The black
sheep of the privatization was the Czech-Russian Gaz-Invest sponsored by Gazprom. Italian companies included
Edison Gas, the second largest gas company, while Duke Energy was the American representative (see Zajíček,
2001c, p. 9).
It was primarily the French who entered the tender with confidence: “Gaz de France and Ruhrgas already use
the Transgas networks, and the members of consortium wish to strengthen the position of the Czech Republic
as the European gas intersection”, was, for example, the comment of Jean-Luc Demanesse, the head of the GdF
Branch in Prague (see Bautzová, 2001, p. 14).
The tender was quite surprisingly won by the rather underrated RWE, as it offered by far the highest price of
CZK 133 billion, a figure that exceeded the Government’s expectations of around CZK 100 billion. “With this increase
by more than four million additional end users, RWE will become number four in the European gas market”,
was how Chairman of the RWE Board, Dietmar Kuhnt, justified the amount.
14	 A certain discomfort was also aroused in the aftermath of deciding the individual traded companies’ prices, which the Government
commissioned from the only judicial expert during a three-week period. Economist Miroslav Zajíček in that context warned that while
the German group E.ON was willing to pay CZK 22 thousand per share of Západočeská energetická half a year before the transaction
itself, the expert valued the shares at 6,180 CZK each (see Zajíček, 2002, p. 9).
15	 This was Severočeská energetika, which was initially to be sold.
The History of the Czech Energy Sector 33
2.3.4 Privatization of the Coal Sector
A separate comprehensive chapter is devoted to the change of ownership structures in the Czech coal companies.
The bituminous coal company OKD, a. s. and three brown coal companies: Mostecká uhelná společnost
(later Czech Coal, since 2013 part of Severní energetická group), Severočeské doly, a. s. and Sokolovská uhelná,
a. s. were and remain the largest of their kind.
Starting with the first of these companies the former state enterprise Ostravsko-karvinské doly, it was replaced
by a joint stock company of the same name on January 21, 1991, with a hundred per cent state share (see OKD,
n.d.a). In 1997, the Government was preparing privatization of the company together with the brown coal fellow
players noted above. Initial proposals called for a maximum 3% of OKD to be sold to the management of the company,
another 34% to the strategic investor, and the remaining share to be sold on the stock market.
But early on, in the preparation stage of trading, it turned out that the state had lost part of its control over
the company in the 1990s when the Investment and Post Bank collected roughly a fifth of the shares for an unspecified
investor. (see Hospodářské noviny, 1997) At the beginning of the following year, there was a direct clash between
the state and the company it controlled, when the National Property Fund (NPF), which was responsible for
the state shares in the company, accused the company’s management of damaging the its interests. “…the Fund
has a serious suspicion that the management places significant orders with associated companies and behaves
more than a little oddly”, observed NPF spokesman Miloš Růžička about stock investments in Moravskoslezské
teplárny and Teplárny Karviná. (see Lidové noviny, 1998)
Only at the general meeting of the company at the end of April 1998 did state representatives finally reveal that
they had practically lost the control over the company. The issue was that an approximately 46% share was insufficient
compared to the 46.3% share jointly held by the Bank Holding from IPB Group and the brokerage company
Eurobrokers (see Němeček, 1998, p. 6).
A reminder of what was going on in the company in 1998 and 1999 can be found in the short summary published
in the weekly Respekt in 2003, related to the charge levelled at the owners and managers of OKD, Viktor Koláček
and Petr Otava. “Ostravsko-karvinské doly had bought from Koláček and Otava their private company K.O.P. for
3.9 billion CZK, which is in the experts’ opinion an exaggerated sum. This is also confirmed by step number two:
as soon as Koláček and Otava had the money in the account, they bought a deciding package of OKD stock for
2.4 billion CZK through a mediator and escaped the notice of the Government. The transaction was completed
by the new coal barons by sending the remaining CZK 1.5 billion – apparently a commission – to the account of
the mediator of the transaction, the secret Cypriot company Lagur Trading. In economic terms, the entire affair,
of course, makes no sense: OKD first buys a private company for almost CZK 4 billion and afterwards allows its
owners to seize control over it for a mere 2.4 billion? (see Bártek, 2003a, p. 8)
Nor did the situation settle down completely after this transaction had been made. Attention was aroused,
for example, by the fact that immediately after seizing control of the mines, the company Karbon, owned by
the above-mentioned managers, closed an advisory agreement with OKD, on which basis it received roughly
a half a million CZK per year. “The difference between the real expenses for providing the services and the sum
Karbon Invest had siphoned off thanks to these contracts from 1999 with OKD and Českomoravské doly goes
beyond the figure of CZK 1.6 billion”, was the comment on the possible damage made by state prosecutor Karel
Kalda, who was running the criminal proceedings (see Bártek, 2003b, p. 8).
The entire saga continued into 2004, when the state sold its entire 46% OKD share to the dominant owner
Karbon Invest, which in turn sold this share to the Cypriot RPG Industries, owned by financier Zdeněk Bakala
(see Pokorný, 2004, p. 12). What seems interesting here is the price, since the Government, despite higher offers
such as Penta’s, sold its share for CZK 4.1 billion, which was then purchased from Karbon Invest by Bakala for an
estimated 12.5 billion CZK (see Zajíček, 2005, p. 8).
In 2009, the Regional Court of Justice in Hradec Králové released Viktor Koláček, Petr Otava and (according
to the prosecution) co-offender Jan Przybyl.
In recent years, the company has struggled with both weakening profitability and multiple legal cases.
Regarding the first issue, OKD found itself unable to react to falling hard coal prices and a tightening sector
economy, and it collapsed in 2016. Emphasizing the importance of the company for employment (the company
directly employed about 9,500 people) and social stability of the region the government OKD via the state-owned
company Prisko for 80 million Czech crowns in 2018. According to the Ministry of Finance, mining activity is to
be gradually restricted and then terminated fully in 2023. (see iRozhlas, 2018)
The History of the Czech Energy Sector34
During the same period of time privatization, has been the subject of yet unresolved legal cases between
the Czech state, former management, and multiple corporations, legal, and physical entities involved in the case.
Considering the intricacy of the case and the involvement of multiple prominent political figures, the chance for
the successful, timely, and transparent rectification of these disputes is fairly low.
The transfer of Mostecká uhelná’s (MUS) property proceeded in a similarly interesting manner. The company
emerged in November 1993 from the unification of the former state enterprise Doly and Komořany preparation
plants, Doly Ležáky and Doly Hlubina. A majority stake in MUS was then privatized during the second wave of
privatization, while the state kept a minority share.
The privatization was meant to be completed by the end of 1997, again with the anticipated sale of a maximum
3% to the management of the company and 34% to the strategic investor (see Hospodářské noviny, 1997).
But there was no significant change before the spring of 1998, when, as was the case with OKD, the National
Property Fund called for an extraordinary general meeting to check the economic activity of the company.16
This,
however, proved only that the role of state in the further running of the company was rather limited. In an effort
to dismiss the MUS Board for alleged opaque economic activities, it proved that the company was controlled
by the anonymous group Investenergy located in Switzerland, while the actual owner was the American Appian
Group (see Marek, Zlámalová, Fiala, 1998, p. 14).
The state at that point had only 46.29% of the company’s stock at its disposal. Accordingly, the suspicion that
it was the company’s management that was struggling to seize the control over it grew stronger. “Our suspicion
that the management is associated with the new investors is confirmed”, declared FNM spokesman Miloš
Růžička after the general meeting (see Marek, Zlámalová, Fiala, 1998, p. 14). The transfer was then completed
by the Ministry of Industry and Trade, which in May 1999 came to agreement with Appian Group concerning
the sale of the state’s share in MUS (see Mladá fronta DNES, 1999). The company thereby took complete control
of the greatest Czech producer of brown coal without its management structure ever having been revealed.
Appian then, in 2005, sold MUS to four managers of the company, namely to Antonín Koláček, Luboš Měkota,
Vasil Bobel and Petr Pudil (see Hudema, 2005, p. 3).
The extent to which these members of corporate management took part in the previously described property
transactions is evidenced by events at the end of 2011. Under media pressure, Petr Nečas’ Government at that
point abandoned its approximately eighteen-month-long disinterest and decided to join the legal action initiated
by the Swiss public prosecutor against MUS management for money laundering. The prosecution’s materials in
fact quite plainly described the order of events leading to the change in ownership of the company.
“According to the prosecution, from December 1996 to June 1998 the managers of MUS misappropriated
more than CZK two and a half billion from company accounts they were administering. In the second phase,
from December 1998 to April 2002, the managers, later also the owners of MUS, misappropriated another CZK
four and a half billion.”
The managers used the first two and a half billion crowns for a well planned purchase of stocks executed in
the greatest secrecy in an amount that, for the money they stole, gained them a 50% share in the state strategic
company. According to the prosecution, the managers immediately afterwards misappropriated another CZK four
and a half billion. They used part of that sum to return the money from the first misappropriation. The rest, CZK six
hundred fifty million, went to the fraudulent and corrupt purchase of MUS stock from the Czech state, for which,
according to the prosecution, they paid three and a half million less than its real value. The managers then sent CZK
one hundred fifty million to an account which friends of the former ČSSD deputies Stanislav Gross, Pavel Musela
and Jiří Martínek had access–the Government, which approved the state, sale was in ČSSD’s hands. And finally, they
sent a bit less than a million and a half to their private accounts,” is how the weekly Respekt summed up the main
points of the case (see Spurný, Kundra, 2011). After merging with Severočeská uhelná, a. s., the company then, in
2005, changed its name to Mostecká uhelná, a. s., and in 2008 to Czech Coal Services, a. s. Furthermore, in 2006
the investor Pavel Tykač entered the company, while the former owners (Antonín Koláček, Luboš Měkota) left.
16	 The server Ceskapozice.cz in 2011 released an interesting document, in which the representatives of FNM management just before
the mentioned general meeting had warned the relevant people, i.e. Minister of Finance Ivan Pilip, the head of the Industry and Trade
resort, Karel Kühnl and the bodies involved in the criminal proceedings. The very first lines of the document were interesting: “In 1998,
the National Property Fund of the Czech Republic obtained information which led to the suspicion that the members of Mostecká uhelná
company’s management were involved in activities that met the definition of the crime of information abuse during trading, breach
of obligations during the management of another’s property, potentially also the crime of fraud”. This information referred to both “embezzlement”
from MUS and its “hostile takeover” (see Léko, 2011).
The History of the Czech Energy Sector 35
While the company itself changed owners a few times and its assets are now part of the Severni energeticka
group, the legal cases related to the privatization described above are still ongoing. As with OKD, the sheer complexity
of the case and involvement of multiple former high-ranked politicians weaken any chance for a transparent,
final resolution of the legal disputes in the foreseeable future.
Sokolovská uhelná, a. s., emerged in 1994 from the merger of Palivový kombinát Vřesová, brown coal mines
Březová and remediation company Sokolov (see SUAS, n.d.). It met the same fate as its larger colleagues: a small
stake was sold to management, 34% to the strategic investor, and the remainder was put on the stock exchange.
The state prevented a repeat of the OKD and MUS scenarios by enhancing its previous minority stake in the company
with the purchase of an additional 1.3% of the shares, giving it a 50% stake (see Žák, 2003, p. 6). There was,
however, no sign of privatization during the 1990s.
In 2003, the Financial Times referred to the anticipated completion of privatization in an article starting with
the following words: “The Czech Government plans to privatize brown coal mines in a competition in which
the majority of foreign applicants will be eliminated” (see Zlámalová, Němeček, 2003, p. 9). In an effort to keep
potential German companies in check,17
from which the Government expected nothing less than limited mining
and favouring local industry over foreign Czech, it came to the narrowing down of potential investors into two
groups–company management and the owners of OKD, Viktor Koláček and Petr Otava. Through the company
Metlimex, the latter two owned 36% of Sokolovská uhelná’s stock (see Bártek, 2003c, p. 8).
Koláček and Otava’s arrest and investigation then spiced up the situation, when the privatization commission
eliminated all other applicants and had the state sell the company to management for approximately CZK 2.6 billion.
This price was repeatedly criticized for being too low: “The price for the state share should be between 7 and
10 billion CZK”, argued the analyst of Atlantik FT, Roman Cenek (see Pokorný, 2003, p. 8). This claim finds confirmation,
for example, in the fact the company had CZK 4 billion just in accounts aimed at landscape recultivation,
which it could have used practically until it was eventual spent, while the offer of the American firm Independent
Power (over CZK 6 billion) or of the Slovakian investor Penta (over CZK 7 billion) should not be understated either.
As previously indicated, the selection commission nonetheless eliminated both companies without providing
them any detailed justification.
Severočeské doly, a. s., (SD), established with the merger of Doly Nástup Tušimice and Doly Bílina in 1994,
had a somewhat different destiny. In terms of privatization, SD was meant to be taken over by a private owner
as in the case of Sokolovská uhelná, first through the process of privatization in the second half of the 1990s,
and then by being put on the market in 2003. Keeping the obstacles discussed above in mind, the focus was
on the dominant offer of the company Appian Group (see the part devoted to Mostecká uhelná, a. s.). Only ČEZ
could have presented serious competition, since it was both the most important minority shareholder–with 39%–
and the leading consumer of coal (SD covered 80% of ČEZ’s coal consumption). ČEZ’s offer was not accepted
in the end, something which is often linked to the removal of company chief Jaroslav Míl, who was replaced by
Martin Roman (see Zajíček, 2003, p. 8).
The tender, which the Czech and foreign media saw as highly opaque due to a number of restrictive terms, an
obscure selection process, and speculation over whether the Appian Group would be favoured, finally attracted
three bids. The Slovak group Penta wished to buy SD for CZK 5.3 billion, J&T offered CZK 6.8 billion and Appian
Group CZK 4.83 billion (see Šafaříková, Němeček, 2003, p. 9). The Government then cancelled the tender. The final
decision was to give up the notion of selling the mines via the tender process and instead to execute a direct trade
with ČEZ, which bought another 37.31% of SD stock for approximately CZK 9 billion in 2005, thereby increasing
its stake to 93.1%. The purchase of the remaining stock took place in the succeeding year (see ČEZ, a. s., n.d.i.).
2.3.5 Issues Related to EU Accession–Liberalization of the Energy Sector
In the period after 1995, the so called European Agreement entered into effect. This Agreement codified the entry
of the Czech Republic into the EU, on the basis of which the Czech Republic was obligated to adapt the local
legal framework to the EU framework over the course of ten years.
17	 “A German mining company cannot be the investor for it would be bringing coal from Germany,” are, for example, the words of Deputy
Minister of Industry and Trade Martin Pecina (see Zlámalová, 2003b, p. 3).
The History of the Czech Energy Sector36
The Czech Republic’s objectives in many respects corresponded to EU requirements, albeit the accentuation
and above all the planned pace of change could have been somewhat different. Even without incentives from
Brussels, there would have been movement towards a market economy, including the settlement of energy commodity
prices and the complete removal of state subsidies. The same is true for the adaptation of the legal framework,
for example treating the functioning of private energy companies, delimiting the state’s role in the energy
sector, for example in terms of preserving free competition and restricting monopolies, followed by the establishment
and streamlining of the required monitoring agencies (ERÚ, State Energy Inspection). The energy sector
had to undergo changes leading to greater efficiency, greater conservation of raw materials, and heightened
environmental awareness. Nor would the outdated coal sector escape rebuilding. All of this would sooner or later
have happened on its own, so every assessment report and other outcomes of the pre-accession negotiations
really served as observations on ongoing changes rather than a means of imposing them.
There were actually only a few truly problematic issues. For financial reasons as well as for the adoption of
necessary legislation, a requirement was set in place to secure 90-day reserves of oil and oil equivalents in case
a supply crisis should arise. This was done by the Act on Emergency Oil Stocks 189/1999 Coll., which required
a progressive increase in these reserves and led to the gradual resolution of the situation by 2005.18
The transition
period, which was arranged until December 31, 2005, was indeed only a reserve for fine-tuning and not an
effort by the Czech Republic to needlessly prolong the issue. This is apparent from the country’s current effort to
increase these reserves to 120 days, notably beyond the level requested by Directive 2006/67/EC (of December
31, 2012 Directive 2009/119/EC) (see Černoch, Dančák, Koďousková, Leshchenko, Ocelík, Osička, Šebek, Vlček,
& Zapletalová, 2012)
Tab. 2.1: The Process of Electricity Market Liberalization
Period Eligible customers – customers
entitled to choose an electricity
supplier on their own
Offers can be provided by
producers with a minimum
production exceeding
% of total consumption
From 2002 End users whose yearly
electricity use exceeds 40 GWh
10 MW 17.9%
From 2003 End users whose yearly
electricity use exceeds 9 GWh
Any production level 29.8%
From 2004 End users with continuous
metering, households excluded
Any production level 47.4%
From 2005 All end users, households
excluded
Any production level 72%
From 2006 All end users Any production level 100%
Source: ERÚ
The requirements entailed by market liberalization19
were far more complicated, primarily in terms of enabling
customers to choose natural gas and electricity suppliers on their own. The issue was first addressed by
the Energy Act, No. 222/1994 Coll., while the Government had a detailed timetable only with the Energy Act of
2000 (458/2000 Coll.). The latter act also regulated other requirements included in the EU directives, for example
delimiting the authorization principle for building new energy capacities or the obligation to keep separate
accounting across single activities.
18	 These reserves are provided by the Administration of State Mineral Reserves, which regularly submits reports on the state of these
reserves to the European Commission.
19	 Driven at the EU level by the Directive Concerning Common Rules for the Internal Market in Electricity No. 96/92/EC and the Directive
Concerning Common Rules for the Internal Market in Natural Gas No. 98/30/EC. Both documents among other things required enabling
third party access to the electricity and natural gas transmission networks, which are of a natural monopolistic character.
The History of the Czech Energy Sector 37
Tab. 2.2: Liberalization of the Natural Gas Market
Period Eligible customers – the customers entitled to choose a gas supplier on their own
From 2005 End users with consumption exceeding 15 million m3
/ year per single consumption site as well as all
licensed electricity producers burning gas in thermal power plants or during the combined production of
electricity and heat.
From 2006 All end users, excluding households
From 2007 All customers, including households
Source: ERÚ
EU liberalization requests were later emphasized in a new directive, 2003/54/EC Concerning Common Rules
for the Internal Market in Electricity and Directive 2003/55/ Concerning Common Rules for the Internal Market
in Natural Gas, which the Czech Republic had also incorporated into its legislation and, in line with their aims,
also speeded up the opening up of the whole market.
Tab. 2.3: The Number of Electricity and Natural Gas Suppliers Changed During the Liberalization Process and Upon its Completion
Electricity Gas
High energy
users
Low energy
business users
Low energy
households users
Others High energy
users
Medium energy
users
Low energy
users
households
2002 unknown x X unknown X X x x
2003 16 x X 0 X X x x
2004 396 x X 3 X X x x
2005 1,650 1,829 X 32 2 X x x
2006 2,458 5,693 4,976 23 2 24 428 x
2007 4,353 15,991 25,644 28 104 9 62 6,524
2008 6,549 35,351 15,764 25 129 90 366 11
2009 9,105 33,487 54,089 63 152 267 4,506 28,402
2010 17,012 48,072 183,990 107 213 674 6,842 76,695
2011 9,518 50,770 250,903 662 476 892 16,144 158,840
Total 51,057 191,193 535,366 943 1,078 1,956 28,348 270,472
x – the market for the specific type of user so far unopened
unknown – statistics of the number of changed suppliers were not kept
2011 – data until August (electricity), resp. July (gas) 2011 (incl.)
others – inputting and producing consumption and transfer sites without continuous metering and with losses in the network, or
excessive internal consumption.
Source: OTE, 2010
The liberalization trend in the single EU energy market, of course, did not end with the Czech Republic’s entry
into the EU in 2004. The most recent incentives came with the adoption of the Third Liberalization Package
in 2009, predominantly consisting of directives and regulations controlling the rules of the internal market in gas
and electricity20
. This package, among other things, defines different types of ownership unbundling of the transmission
networks from producers, specifically, absolute ownership unbundling and two more moderate models.
The entire package also targets the authorities of the regulatory organs and the formation of its equivalent covering
the entire EU (ACER) along with the rights of end users.
These new features entered the Czech legal framework though an amendment to the Energy Act (Act No.
211/2011 Coll.) on August 18, 2011 (see Pravda, 2011, p. 39). The general character of this amendment is discussed
in other sections of this book. Here we confine ourselves to modifications concerning electricity and natural gas
market liberalization.
20	The package consists of Directive 2009/72/EC on Common Rules for the Internal Market in Electricity, Directive 2009/73/EC on
Common Rules for the Internal Market in Natural Gas, Regulation No 713/2009 establishing an Agency for the Cooperation of Energy
Regulators, Regulation No 714/2009 on Conditions for Access to the Network for Cross-Border Exchanges in Electricity, and Regulation
No 715/2009 on Conditions for Access to the Natural Gas Transmission Networks.
The History of the Czech Energy Sector38
The greatest innovation, the ownership unbundling of network operators from production and trade, referred
only to the electricity industry, in other words to ČEPS. Since 2011, ČEPS has been an independent entity and has
no ownership relations with its former parent company ČEZ.21
As far as the gas sector is concerned, the state intervened
to ensure a more relaxed modification of ownership relations by means of the ITO (Independent Transmission
Operator), in which a transmission system operator and a producer or supplier can remain in a joint concern, while
being subject to major regulation by the supervising organ (ERU)–during the appointment of the company’s management,
the preparation of investment plans, or verification of the transmission system operator’s independence.
NET4GAS,asthe operatorofthe coregaspipelines,wastherebyforcedtoremainpartofRWE(seePravda,2011,p.39).
The situation in the gas sector has in recent months been changing significantly and it seems the debate over
which regulation model to apply to NET4GAS has ceased to have much point. RWE Transgas, part of the German
concern RWE, has actually sold transit pipelines (see Kubátová, 2012). The reason is the need to consolidate
the company and obtain the means for investments in Germany itself, related to the pressure imposed there on
energy companies due to the country’s exit from nuclear energy. A consortium made up of the insurance company
Allianz and the Canadian investment company Borealis has become the new owner of NET4GAS, by which
the latter’s (in)dependence on the initial parent company has become a matter of history.
2.3.6 Temelín Nuclear Power Plant
Although it represents but a single source of electricity, the nuclear power plant at Temelín (NPP Temelín) deserves
a dedicated section, since this project affected and continues to affect the development of the entire energy
sector to a great extent. We will not look at the importance the Temelín nuclear power plant has for the energy
mix or its technical performance, but rather at the circumstances surrounding the power plant’s completion
as one of the most sensitive energy-related topics of the 1990s.
The decision to build the power plant came already in 1980, with plans for four 1,000 megawatt VVER 1000 blocks.
Two years later, a supply contract for a Soviet technical project followed, with the construction permit issued in
November 1986. When construction was initiated in February 1987 (to be realized by Škoda Praha), it seemed that
everything would proceed without complication through to the launching of the power plant (see ČEZ, a. s., n.d.j.).
After November 1989, the project came to be modified, mainly after re-evaluating whether the Czech Republic
needed such a massive power source and after calculating the cost. The Czech Government, under Decree No.
103/93 of March 1993, decided to build only two blocks (which produced their first electricity in 2000); in 2002
the first block went into test operation and, in 2003, the second. They were launched with full capacity in 2004.
The power plant received final approval in 2006 (see ČEZ, a. s., n.d.j.).
This brief description, however, neglects the turbulent atmosphere which had persisted for more than a decade
as construction took place. Temelín NPP prompted powerful reactions both at home and abroad, and its
completion was more than once reconsidered.
The first serious obstacles it had to face presented themselves at the start of the 1990s, when opponents organized
NGOs like South Bohemian Mothers against Atomic Danger. Demonstrations against completion were frequent,
such as one on April 27, 1991 that was also joined by the citizens of Germany and Austria (see Petrlík, 1991, p. 8).
During the same period, the acuteness of the Temelín issue was confirmed as well by a decision of the government
headed by Prime Minister Petr Pithart, who ended debate on Temelín’s completion by leaving the final
verdict to his successors. Two studies which emerged in 1992 made a contribution of their own; one commissioned
by the Ministry for Economic Affairs and Development of the Czech Republic and the other ordered from
the American company Power International by unidentified government agencies. Without going into detail, we
may note that the studies were dramatically at odds with one another–the study ordered by the Ministry argued
that the completion of Temelín nuclear power plant was necessary if the country was to escape an energy collapse.
Power International, on the contrary, saw completion of the power plant as leading to a surplus of electricity
and the need to close a significant amount of other energy capacity. A similar analysis was introduced concerning
the estimated electricity price, which was supposed to be CZK 0.60 or even up to CZK 2.40 per 1 kWh
(see Gruner, 1992, p. 5).
Further progress on the construction then continued in a similarly unsteady manner. Announcements of delays
and rising prices were quite regular until the Government headed by Josef Tošovský intervened by asking an
21	 ČEPS, a. s., is 100% owned by the Ministry of Industry and Trade, while the Ministry of Finance has a share in ČEZ, a. s.
The History of the Czech Energy Sector 39
independent commission to inspect the entire affair. Its final report released a final price in the neighborhood of
at least CZK 110 billion, and the commission seized the opportunity to question the need for the Temelín nuclear
plant in the first place in terms of expected energy consumption (see Hrubý, 1999; Švehla, 1999a, p. 6).
In terms of the economic profitability of the power plant, it was said that the investments would provide an
economic return only if the plant were to be completed in three years. Traditionally reserved towards Temelín,
the weekly Respekt commented on the conclusions of the report with open sarcasm: “Throughout the year
ČEZ provided us with two sorts of information. First, that electricity from the nuclear power plant is absolutely
the cheapest, and second, that the republic would break down in the aftermath of an energy collapse without this
super-cheap electricity. Today marks the fourth year from when we were supposed to live in a country sunk in
darkness, where trains do not run, factories stand still and hospitals are closed. This is how ČEZ experts painted
the future of the Czech Republic after 1995, if Temelín were not completed. The power plant is still not standing,
but dark forecasts, nevertheless, have been proven wrong. (…) Together with postponing the date of completion,
the energy lobby also pushed its prophesy of an energy emergency further off. In the mid-1990s, ČEZ predicted
it at the end of the decade, now in 2005 we will supposedly “make it” without Temelín” (see Švehla, 1999b, p. 5).
In any case, by the time of the Zeman government, it was decided to proceed with the unconditional completion
of the Temelín plant, with a major role played by the persuasive proponent of the project, Minister Grégr. “I do
not believe the arguments that Temelín is unnecessary,” commented one of completion’s proponents, Minister
of Interior Affairs, Václav Grulich. “After all, we need to get industry on its feet. And then it will be necessary” (see
Švehla, 1999c, p. 4).
With this, the last obstacle to completion fell and on November 3, 2006, Temelín underwent final inspection.
2.4	 The Third Phase of Development – EU Membership Through to
the Present
Despite all the problems and delays, the Czech Republic succeeded in joining the European Union boasting
a stable energy market with aggressive energy companies, a number of acquisitions abroad, and a significant
improvement in the diversification of energy suppliers. While the details about the development of individual energy
sectors in the period after 2004 are provided in subsequent chapters, here we would like to briefly comment
on more general trends that have shaped the country’s energy sector.
Firstly, some development may be observed in the composition of the energy mix (see Table 2.4). Decreasing energy
intensity in the economy, the depletion of easily accessible deposits, a strenghthened position for other fuels,
environmental mining limits, and environmental concerns in general contributed to a decline in coal consumption.
Especially in heat production, coal was substituted to some extent by natural gas, a preferred fuel due to its practicality
and cleanness. Nevertheless, coal is still king when it comes to meeting the energy needs of the country.
Tab. 2.4: Total Primary Energy Supply (TPES) by source (Ktoe)
0
5000
10000
15000
20000
25000
30000
35000
1990 1995 2000 2005 2010 2015 2016
Coal Natural gas Nuclear Hydro Other renewables and waste Primary and secondary oil
Source: (IEA, 2019)
The History of the Czech Energy Sector40
The commissioning of Temelín NPP in 2000–2002 significantly increased the share of nuclear energy in
the mix. Since then the growth of the production has been driven primarily by incremental improvements in
the existing technology, with the construction of new capacities being rather unlikely.
An orchestrated effort driven by EU legislation and domestic environmental pressure resulted in an increased
use of renewable energy and energy produced from waste. Despite the damage done to the reputation of renewables
in the 2008–2010 crisis and the noticeable hesitation of subsequent governments to reintroduce financial
support schemes for producers, renewable energy is expected to slowly grow in the future. On the other side,
the dominance of oil in transportation has remained practically unchallenged, with some variations in consumption
resulting from changes in the price of oil products at petrol stations.
Secondly, there has been noteworthy evolution in the stance of ČEZ. Once a monopoly producer of electricity,
the company faces multiple problems that erode its position. While still controlling a high percentage of generation,
distribution, and supply, under domestic and EU-driven liberalization processes, new companies have
emerged to offer intense competition. Comparing the situation in 2008 versus 2016, ČEZ´s share of total generating
capacity has declined from about 75% to 67.7%; in terms of distribution, Prague, Southern Bohemia, and Southern
Moravia are operated by PRE Distribution and E.ON Distribution respectively, while dozens of rival companies
are actively trading in the country. (IEA, 2016) Of these ČEZ challengers, EPH stands out with an aggressive buying
strategy and impressive pace of growth. Established only in 2009, the company has assets now in the Czech
Republic, Slovakia, Germany, Italy, Great Britain, and Hungary, and is involved in production, trading, and distribution
of electricity. It is also active in the natural gas sector, in heating, and in coal mining. To provide a rough comparison,
EPH and ČEZ had 11,512 MW and 14,865 MW of installed capacity respectively. (EPH, 2018), (ČEZ, 2018)
ČEZ has also been notoriously incapable of successfully expanding outside the borders of the country. Between
2004 and 2019, the company invested about 72 billion Czech crowns abroad, buying assets primarily in Balkan
countries, with questionable results. ČEZ´s acquisitions ran into problems in Bulgaria, Turkey, Poland, and Albania,
where political and regulatory issues too often forced ČEZ to write some of its investments off. (Zenkner, 2019),
(Lukáč, 2019) This is again in stark contrast to the regularly successful foreign investments of EPH.
Third, the Czech energy sector seems to be more and more influenced by the energy transition underway in
neighbouring Germany, which aims to phase out of nuclear and coal sources, replacing them with renewables.
When this transition was launched in 2010–2011, the main concern of various Czech energy stakeholders was that
Germany would use its diplomatic and economic power to problematize nuclear energy in neighbouring countries.
This concern never materialized, but other sources of pressure have emerged.
The price of electricity is an especially significant one. Due to integration processes underway in the EU electricity
markets and the pronounced geographic proximity between the two countries, Germany and the Czech
Republic have the same electricity prices. The price is created in Germany as a result of the huge imbalance between
the sizes of the two markets. The market reality of the German electricity market, with a growing share of
subsidized and intermittent renewable sources, is thus mirrored in the Czech Republic. This means, for example,
that the wholesale price of electricity, under strong pressure due to the huge subsidies thrown at renewable
sources in Germany, is instantly mirrored in the Czech Republic. While beneficial for end consumers, it affects
the investment strategies of electricity producers and has a significant (negative) impact on the potential profitability
of any new nuclear source in the country. (Černoch, 2017)
Fifth, a significant part of the future debate over the Czech energy sector will be dominated by environmental
issues. The energy sector is one of the worst polluters, which is why it is exposed to progressively more intensive
regulation at the level of the state and of the EU. To illustrate the situation, energy companies need to cope with
the demands of the 2020 climate and energy package, which spurred support for renewable sources and intensified
decarbonization of the sector via the EU Emission trading system. (European Commission, n.d.) This package
was tightened further in 2014 with the 2030 Climate and Energy Framework (European Commission, n.d.b)
Large combustion plants with a rated thermal input greater than 50 MW are obliged to fulfil stringent emission
limits introduced by the Industrial Emission Directive (European Commission, 2010). Environmental and energy
policies are slowly merging into one, and energy sectors in the Czech Republic and throughout the EU are being
forced to decarbonize and be more efficient and environmentally friendly, regardless of the cost.
Finally, we observe significant development in the intensity of securitization of the energy sector. The Czech
Republic depends heavily on supplies of natural gas and crude oil from foreign countries, mainly from Russia,
and this dependency is traditionally perceived as a significant security threat. Import dependency concerns
motivated the construction of the IKL pipeline and negotiation of gas contracts with Norway, both aimed at
The History of the Czech Energy Sector 41
attracting non-Russian energy supplies. The worst fears came to pass during the New Year´s Eve quarrels
between Ukraine and Russia over prices and gas volumes, which escalated in 2006/2007 and 2008/2009.
The disagreement resulted in interruption of the flow of natural gas through Ukraine to Europe, causing ten
states receiving supplies on the route to experience a serious shortage of gas. The securitization and nationalization
efforts have been likely connected with the general development in the Czech party system, which,
under the influence of the economic crisis, have become rather Eurosceptic as one of the consequences of
the economic crisis. Euroscepticism is rooted in the Czech party system and in the public also due to the historical
footprint and legacy of Václav Klaus, the former President of the Czech Republic (2003–2013). (see Havlík
& Mocek, 2018; Havlík, 2019)
Since that time, however, the situation has slowly normalized. With the continuous integration of the EU’s internal
energy market and construction of a new gas interconnection to neighbouring countries, attention has
shifted from the geopolitically framed security of (gas) supply to the technically framed security of (electricity)
infrastructure. The issue of politicization of energy supplies by third countries still resonates with policy makers,
but it is gradually being overshadowed by more pressing issues.
2.5	 Sources
Aktuálně.cz. (2009, October 19). Fischer by rád, kdyby Miko zůstal. Ministr odmítá. Retrieved from
http://​aktualne​.centrum​.cz​/domaci​/politika​/clanek​.phtml​?id​=​650546
Aktualne.cz. (2010. December 15). Tajné nahrávky: Jak chtěl Drobiluv poradce černé peníze. Retrieved from
http://​aktualne​.centrum​.cz​/domaci​/kauzy​/clanek​.phtml​?id​=​685723
Bártek, D. (2003a, August 4). Uhlobaronům zhořkl koláček, Respekt, 2003, p. 8.
Bártek, D. (2003b, December 8). Uhlobaronům skončila dolce vita, Respekt, 2003, p. 8.
Bártek, D. (2003c, March 24). Od incestu k miliardám. Respekt, 2003c, p. 8.
Bautzová, L. (2001, December 6). Kdo a s kým do českého plynu. Ekonom, 2001, p. 14.
Bilance elektrické energie v letech 1993 až 2007 v GWh. (n.d.). Retrieved from http://​notes3​.czso​.cz​/csu​
/2008edicniplan​.nsf​/t/A3002DE59D​/$File​/81100801​.pdf
CEZ (2018). 2018 Annual Report CEZ. Retrieved from www​.cez​.cz: https://​www​.cez​.cz​/edee​/content​/file​-s/pro​
-investory​/informacni​-povinnost​-emitenta​/2019​-04​/cez​-en​-annual​-report​-2018​.pdf
Černoch, F. & Dančák, B. & Koďousková, H. & Leshchenko, A. & Ocelík, P. & Osička, J. & Šebek, V. & Vlček, T.
& Zapletalová, V. (2012). The Future of the Druzhba Pipeline as a Strategic Challenge for the Czech Republic
and Poland. Brno: Mezinárodní politologický ústav. https://​doi​.org​/10​.5817​/CZ​.MUNI​.M210​-5926​-2012
Černoch, F. (2010). Energetická politika. In Balík, S., & Císař, O., & Fiala, P., & kol. (Eds.), Veřejné politiky v České
republice v letech 1989-2009 (pp. 141-167). Brno: Centrum pro studium demokracie a kultury.
Černoch, F. (2011). Energetická politika ČR a Energetické zájmy EU (Non-published disertation thesis).
Masarykova univerzita, Brno.
ČEZ (2005, March 11). Vnitřní informace. Retrieved from http://​www​.cez​.cz​/cs​/pro​-investory​/informacni​
-povinnost​/793​.html
Energetika. (1999). Energetické hospodářství České republiky.
Energetika. (2003). Energetické hospodářství ČR v analýze MPO.
Energetický regulační úřad. (2011). Roční zpráva o provozu ES ČR za rok 2010. Retrieved from http://​eru​.cz​/user​
_data​/files​/statistika​_elektro​/rocni​_zprava​/2010​/rz​/index​.htm
Energy Regulatory Authority. (2019). About ERO. Retrieved from https://​www​.eru​.cz​/en​/o-uradu
EPH. (2018). EPH Annual Report 2017. Retrieved from https://​www​.epholding​.cz​/wp​-content​/uploads​/eph​_vz​
_2017​.pdf
European Commission. (n.d.) 2020 climate and energy package. Retrieved from
https://​ec​.europa​.eu​/clima​/policies​/strategies​/2020​_en
European Commission (n.d.b) 2030 climate and energy framework. Retrieved from
https://​ec​.europa​.eu​/clima​/policies​/strategies​/2030​_en
European Commission. (2010). Directive 2010/75/EU on industrial emissions (integrated pollution prevention
and control). Retrived from https://​eur​-lex​.europa​.eu​/legal​-content​/EN​/TXT​/HTML/?uri​=​CELEX:​
32010L0075​&​from=CS
The History of the Czech Energy Sector42
Fousek, Z. (1998, October 29). Česká energetika před vstupem do EU. Ekonom, 1998, p. 4.
Geussová, F. (2001, December 6). Privatizační horečka stoupá. Ekonom, 2001, p. 17.
Geussová, M. (2002, January 10). Elektrické napětí. Ekonom, 2002, p. 18.
Gruner, M. (1992, June 29). Bitva u Temelína. Respekt, 1992, p. 5.
Havlík, V. 2019. Europeanisation or renationalisation? The Czech Republic facing the euro-, economic and
refugee crises. In: Leibert, U. & Jenichen, A. Europeanisation or Renationalisation. Learning from Crises for
Innovation and Development. Opladen: Verlag Barbara Budrich, pp. 49-64. ISBN 978-3-8474-2097-2.
Havlík, V. & Mocek, O. 2018. Václav Klaus as a Driver of Czech Euroskepticism. In: Hashimoto, T. & Rhimes, M.
Reviewing European Union Accession: Unexpected Results, Spillover Effects, and Externalities. Leiden:
Brill, pp. 96-112. ISBN 978-90-04-31647-8. https://​doi​.org​/10​.1163​/9789004352070​_008
Hospodářské noviny. (1997, November 13). Privatizace hnědouhelných firem má být do konce roku, OKD ještě
počká. Hospodářské noviny, 1997, p. 1.
Hrubý, Z. (1999, February 28). Závěrečná zpráva expertního týmu pro nezávislé posouzení projektu dostavby
Jaderné elektrárny Temelín. Retrieved from http://​new​.ecn​.cz​/doc​/old​/Enviro​/energetika​/Texts​/zprava​
_komise​.htm
Hudema, M. (2005, February 28). Koláček na mostě. Respekt, 2005, p. 3.
iHned. (2009, July 1). Spory podnikatele Andreje Babiše s PKN Orlen. Retrieved from
http://​hn​.ihned​.cz​/c1​-37646280​-spory​-podnikatele​-andreje​-babise​-s-pkn​-orlen
IEA. (2016). Energy Policies of IEA Countries: Czech Republic: 2016 Review. Retrieved from
https://​www​.iea​.org​/publications​/freepublications​/publication​/Energy​_Policies​_of​_IEA​_Countries​_Czech​
_Republic​_2016​_Review​.pdf
IEA. (2019). Statistic: The Czech Republic. Retrieved from www​.iea​.ogr:
https://​www​.iea​.org​/statistics/?country​=​CZECH​&​year​=​2016​&​category​=​Energy​%20supply​&​indicator​=​
TPESbySource​&​mode​=​chart​&​dataTable​=​BALANCES
iRozhlas. (2018, April 4). OKD opět v rukou státu. Akcie převzal podnik Prisko, cena je téměř 80 milionů.
Retrieved from https://​www​.irozhlas​.cz​/ekonomika​/okd​-prisko​-stat​-ostrava​-karvina​_1804041921​_ako
Invicta Bohemica. (1999). Analýzy energetického komplexu ČR. Praha: Invicta Bohemica.
Kubátová, Z. (2012, February 9). RWE prodává české plynovody. Za dceřinou Net4Gas může dostat až 50
miliard. Hospodářské noviny. Retrieved from http://​byznys​.ihned​.cz​/c1​-54657010​-rwe​-prodava​-ceske​
-plynovody​-za​-dcerinou​-net4gas​-muze​-dostat​-az​-50​-miliard
Kučera, D. (2009). Pád společnosti Moravia Energo – aneb jaká rizika jsou spjata s obchodováním s elektrickou
energií. Pro-Energy magazín, 2009(3), p. 20-22.
Léko, I. (2011, November 30). Jak Tošovského vláda selhala. Svědectví o kritickém dni v historii Mostecké
uhelné. Českápozice.cz. Retrieved from: http://​www​.ceskapozice​.cz​/domov​/pravo​-bezpecnost​/jak​
-tosovskeho​-vlada​-selhala​-svedectvi​-o-kritickem​-dni​-v-historii​-mostecke​-uh
Lidové noviny. (1998, March 9). FNM bojuje s důlními giganty a ČSSD. Lidové noviny, 1998, p. 15.
Lukáč, P. (2019, May 28). Experti: Návrat ČEZ domů je správný, zahraniční dobrodružství mu nevyšlo.
Hospodářské noviny.
Marek, T. & Zlámalová, L. & Fiala, M. (1998, April 25). Stát prohrál boj o vliv v Mostecké uhelné, Mladá fronta
DNES, 1998, p. 14.
Ministry of Environment. (2019). Ministerstvo životního prostředí. Retrieved from www​.mzp​.cz:
https://​www​.mzp​.cz/
Ministry of Industry and Trade. (2010). Státní energetická koncepce ČR. Retrieved from
http://​www​.mpo​.cz​/dokument5903​.html
Mladá fronta DNES (1999, May 14). Americká skupina Appian koupí státní podíl v Mostecké uhelné. Mladá
fronta DNES, p. 14.
Neužil, J. (2005). Česká energetika na začátku roku 1995. Energetika, No 1.
Němeček, T. (1998, May 4). Privatizace? Už byla… Respekt, 1998, p. 6.
OKD. Retrieved from http://​www​.okd​.cz/
OTE. (2010). Technická zpráva 2010. Retrieved from http://​www​.ote​-cr​.cz/
OTE. (2019). About OTE. Retrieved from https://​www​.ote​-cr​.cz​/en​/about​-ote​/main​-reading​-1
Peterková, P. (2007, January). Loni vyrobená elektřina by stačila 5,5 roku pro jižní Čechy. Temelínky, 2007, p. 5.
Retrieved from http://​www​.cez​.cz​/edee​/content​/file​/energie​-a-zivotni​-prostredi​/temelinky​-2007​-01​.pdf
The History of the Czech Energy Sector 43
Petrlík, J. (1991, September 9). Na palubě s Temelínem. Respekt, 1991, p. 8.
Petržílek, P. (2009, February 3). Říman se svým návrhem energetické koncepce ujel do minulého století.
Petrzilek.blog.iDNES.cz. Retrieved from http://​petrzilek​.blog​.idnes​.cz​/c/68498​/Riman​-se​-svym​-navrhem​
-energeticke​-koncepce​-ujel​-do​-minuleho​-stoleti​.html
Píha, M. (1998). Jak dál s privatizací energetiky. Energetika, 1998, No 7–8, p. 236 – 237.
Pokorný, M. (2003, December 1). Jak se manipuluje za Špidly. Respekt, 2003, p. 8.
Pokorný, M. (2004, November 15). OKD má nového uhlobarona, Respekt, 2004, p. 12.
Pokorný, M. (2011, November 25). Kauza Mostecká uhelná: Stát tak dlouho váhal, až může být promlčená.
Hospodářské noviny. Retrieved from http://​byznys​.ihned​.cz​/c1​-53808650​-kauza​-mostecka​-uhelna​-stat​-tak​
-dlouho​-vahal​-az​-muze​-byt​-promlcena
Pravda, P. (2011, October 17). Novela energetického zákona. Právo, 2011, p. 39.
Posudek Komise k žádosti České republiky o přijetí do Evropské unie. (1997). Retrieved from
http://​ec​.europa​.eu​/ceskarepublika​/pdf​/posudek97​.pdf
Říman: Odmítáním výsledků Pačesovy komise zelení rozbíjejí koalici. (2008, July 6). Novinky.cz. Retrieved from
http://​www​.novinky​.cz​/domaci​/144267​-riman​-odmitanim​-vysledku​-pacesovy​-komise​-zeleni​-rozbijeji​-koalici​.html
Sokolovská uhelná. Retrieved from http://​www​.suas​.cz/
Spurný, J. & Kundra, O. (2011, November 20). Jak se kradly doly. Respekt, 2011.
Státní energetická inspekce. (2019). O SEI. Retrieved from https://​www​.cr​-sei​.cz/?page​_id=77
Sviták, M. (2010). Jaderná elektrárna Temelín si připomíná 10 let provozu. Informační podklad pro novináře.
Retrieved from http://​www​.csvts​.cz​/cns​/news10​/ete10​.pdf
Šafaříková, K. & Němeček, T. (2003, December 22). Šest bohatých pokrytců, polízanice s doly, za Robertem
Bartleyem. Respekt, 2003, p. 9.
Švehla, M. (1999a, March 22). Třetí premiér na tahu. Respekt, 1999, p. 6.
Švehla, M. (1999b, March 29). Jak žít bez Temelína. Respekt, 1999, p. 5.
Švehla, M. (1999c, May 17). Důchodci za atomové jistoty. Respekt, 1999, p. 4.
Vláda České republiky. (2000). Energetická politika České republiky (schválená usnesením vlády České
republiky ze dne 12. ledna 2000 č. 50). Retrieved from http://​biom​.cz​/leg​/Energeticka​_politika​.doc
Úřad vlády ČR, & Nezávislá energetická komise. (2008, September 30). Zpráva Nezávislé odborné komise pro
posouzení energetických potřeb České republiky v dlouhodobém časovém horizontu. Retrieved from
http://​www​.vlada​.cz​/assets​/ppov​/nezavisla​-energeticka​-komise​/aktuality​/zpravanek081122​.pdf
Výlupek, L. (2003, May 7). Elektroenergetika a plynárenství v ČR. Hospodářské noviny. Retrieved from
http://​hn​.ihned​.cz​/c1​-12751870​-elektroenergetika​-a-plynarenstvi​-v
Zajíček, M. (1999). Liberalizace elektroenergetického trhu v České republice. Czech Business and Trade,
1999(3). Retrieved from http://​elektrina​.ecn​.cz​/dokumenty​/liberalizace​.html
Zajíček, M. (2001a, March 19). Vorlíčkovy velké oči. Respekt, 2001, p. 12.
Zajíček, M. (2001b, October 1). Před skokem do tmy. Respekt, 2001, p. 8.
Zajíček, M. (2001c, October 8). Transgas není ČEZ, Respekt, 2001, p. 9.
Zajíček, M. (2002, May 13). ČEZ ke štěstí přišel. Respekt, 2002, p. 9.
Zajíček, M. (2003, October 27). Pan SuperČEZ padl. Respekt, 2003, p. 8.
Zajíček, M. (2005, May 16). Čas ukázal, že prodej OKD byl fiaskem. Respekt, 2005, p. 8.
Zenkner, P. (2019, May 24). Zahraniční investice ČEZ budí spíše rozpaky, firma nyní investuje hlavně do
větrných parků v západní Evropě. Retrieved from www​.ihned​.cz: http://​byznys​.ihned​.cz/ c1-66577750-
zahranicni-investice-cez-budi-spise-rozpaky-firma-nyni-investuje-hlavne-do-vetrnych-parku-v-zapadni-
evrope
Zlámalová, L. & Němeček, T. (2003, August 4). České doly Čechům, důkazy o koženém a bázlivci proti Nomuře.
Respekt, 2003, p. 9.
Zlámalová, L. (2003a, June 30). Stát musí být soběstačný. Respekt, 2003, p. 9.
Zlámalová, L. (2003b, October 20). Když levice prodává důl. Respekt, 2003, p. 3.
Žák, V. (2003, August 14). Má to Antonín Koláček jisté? Ekonom, 2003, p. 36.
The Coal Sector44
Chapter 3: The Coal Sector
Tomáš Vlček, Gabriela Prokopová, Veronika Zapletalová, Petra Bendlová
3.1	 Introduction to the Coal Industry
Thermal power plants (powered by brown coal, bituminous coal, biomass and light fuel oil) in the Czech
Republic provide 11,075 MW of installed capacity, which makes up approximately 50% of the power-energy mix
(see Energetický regulační úřad [ERÚ], 2018). The largest heating plants in the Czech Republic are Prunéřov II
(1,050 MW), Počerady1
(1,000 MW), Dětmarovice and Tušimice II (up to 800 MW). All of these power plants are
under the ownership of ČEZ, a. s. (see ČEZ, 2019). Other large power plants include Chvaletice (up to 800 MW),
formerly owned by ČEZ until its 2013 sale to Severní Energetická a. s. (also known as Sev.en Energy AG, formerly
Czech Coal Group) (see Sev.en Energy, 2018a). The largest power plants involved in biomass combustion are
Tisová I (1 57 MW block), Poříčí (1 55 MW block), Hodonín (1 55 MW block) and the Dvůr Králové heating plant
(1 6.3 MW block), also owned by ČEZ, a. s. (see ČEZ, 2019). ČEZ, a. s. also built an entirely new supercritical coal
unit with a 660 MW capacity at the Ledvice power plant.
All the coal-fired power plants in the Czech Republic are equipped with subcritical or critical boilers whose
efficiency ranges from 30–38%. The first supercritical block in the Czech Republic, whose coal combustion processes
are more efficient (up to 43%)2
and cut pollution emissions, is a block of the Ledvice power plant. It’s capacity
is 660 MWe, and it was completed in 2017 (see ČTK, 2017). In terms of economics and environmental impact,
operation of the subcritical blocks is comparable to that of steam power plants driven by natural gas.
Thermal power plants may be divided into two categories: condensing power plants and heating plants.
Condensing power plants produce power, which means that, following the execution process, all the steam sent
to the turbine condenses into water inside the condenser. Heating plants, in addition to producing power, also
supply thermal energy (in the form of steam to heat water) for heating systems and similar purposes.
1		 For several years there has been an ongoing discussion over the future of this power plant–whether ČEZ will sell it to Severní
Energetická, which would be suitable in light of its proximity to the ČSA mine (see Brož; 2019) .
2	 Terminology from Kolat, Roubíček, & Kozaczka, 2008, p. 20.
The Coal Sector 45
Tab. 3.1: Coal Power Plants in the Czech Republic with more than 150 MWe of Installed Capacity
Power Plant Owner Installed Capacity Connected to
the Network
Fired on
Dětmarovice ČEZ, a. s. 800 MWe (4 × 200) 1975–1976 Bituminous coal
Chvaletice Sev.en Energy AG 800 MWe (4 × 200) 1977–1978 Brown coal
Kladno Alpiq Generation (CZ),
s. r. o.
305.966 MWe (1 × 28,
2 × 135.533, 1 × 6.9)
1976, 2014 Bituminous coal, brown
coal
Komořany United Energy právní
nástupce, a. s.
239 MWe (4 × 32, 1 × 20,
1 × 22, 1 × 34, 1 × 35)
1959, 1978, 1986, 1994,
1997, 1998
Brown coal*
Ledvice VI ČEZ, a. s. 660 Mwe 2017 Brown coal
Mělník (II, III) ČEZ, a. s. 720 MWe (2 × 110**,
1 × 500**)
1971, 1981 Brown coal
Mělník (I) ENERGOTRANS, a. s. 352 MWe (4 × 60, 2 × 56) 1961, 1994–1995 Brown coal
Opatovice Elektrarny Opatovice,
a. s.
363 MWe (5 × 60, 1 × 63) 1979, 1987, 1995–1997 Brown coal
Počerady ČEZ, a. s. 1,000 MWe (5 × 200) 1970–1977 Brown coal
Poříčí ČEZ, a. s. 165 MWe (3 × 55) 1957 Brown coal, bituminous
coal*
Prunéřov ČEZ, a. s. 1,490 MWe (4 × 110**,
5 × 210)
1967–1968, 1981–1982 Brown coal
Tisová Sokolovská uhelná,
právní nástupce, a.s.3
295.8 MWe (3 × 57,
1 × 12.8, 1 × 112)
1959–1961 Brown coal*
Třebovice Veolia Energie, a. s.4
174 MWe (2 × 72, 1 × 30) 1961, 1998 Bituminous coal, light
fuel oil
Tušimice ČEZ, a. s. 800 MWe (4 × 200) 1974–1975 Brown coal
* The Komořany power plant is also partially fired by natural gas. One 55 MW block of the Poříčí power plant and one 57 MW block of
the Tisová power plant employ biomass combustion.
** In 2020, Prunéřov II, Mělník III and one block of Mělník II power plant should be decommissioned, thereby decreasing installed
capacity by more than 1,050 MWe
Source: Energetický regulační úřad, 2010b, p. 88, 92; “Kdo vlastní české uhelné elektrárny”, 2016; „ČEZ odstaví nejvíc uhelných
elekráren“, 2017
3.2	 Deposits, Mine Production, Companies and Traders
3.2.1 Lignite
Lignite is one of the youngest caustobioliths5
in the humolith series. Peat is an even younger caustobiolith, mined
within Czech borders in the 1960s in the Vracov peat bog in Southern Moravia, an area now covered by a natural
lake. Compared to brown coal, lignite has a higher water and lower carbon content, which naturally means it
possesses a lower calorific value.
The extraction of lignite has a rich history tied to the region of South Moravia. If we ignore smaller deposits
and the small-scale extraction efforts that took place in České Budějovice and the Žitavská Basins, by far the largest
deposits are to be found in the Vienna Basin. The underground extraction of lignite started with the Kyjov
and Dubňany coal fields in the South Moravian Lignite Basin. It was already underway by 1824 and terminated
in 2009 with the closing of the last mine (Mír in Mikulčice). Between 1825 and 1994, 93,180,200 tonnes of lignite
were mined (see UVR Mníšek pod Brdy, a. s.).
The work was done by Lignit Hodonín, s. r. o., with its headquarters in Mikulčice, which owned the Mír Mine. Its
sole customer was the Hodonín power plant, which had been built in 1951–1957. To justify its existence, the obsolete
3	 The ČEZ group sold the Tisová power plant to Sokolovská uhelná, právní nástupce, a.s. in 2017 (see „Tisová patří již Sokolovské uhelné“,
2017
4	 Company has changed name from Dalkia, s.r.o. to Veolia Energie, a. s. in 2014
5	 Combustible fossil, the term means a fossil fuel.
The Coal Sector46
power plant in Hodonín with a capacity of 105 MWe (one 55 MWe block and one 50 MWe block) has in recent
years begun to specialize in biomass combustion. One reason for the shift is the constantly rising price of lignite.
The owner of the power plant, ČEZ, A. S., frequently took it offline and restricted its operations to reduce emissions.
The result was that the sole supplier of lignite, Lignit Hodonín, s. r. o., which had already long struggled
economically, was unable to cope with the loss of its only customer. Thus, in September 2009 it declared itself
insolvent. Management was temporarily taken over by s. p. DIAMO, so that extraction in the Mír Mine actually
ended on December 23, 2009. On August 31, 2010, as part of the tendering process, the company and its 60 employees
were purchased by UVR Mníšek pod Brdy, a.s., which does not plan to resume mining. All the machinery
has been removed from the mine, and it is slowly filling up with water (see “Důl u Mikulčič”, 2019).
Tab. 3.2: Deposits, reserves and mine production of lignite in the Czech Republic
2006 2007 2008 2009* 2010 2011** 2017
Deposits – total number 9 9 9 9 9 5 5
– exploited 1 1 1 1 0 0 0
Total mineral reserves 977 976 976 975 975 997 997
– economic explored reserves 205,030 204,412 204,221 203,780 203,780 619,652 619,652
– economic prospected reserves 615,273 615,273 615,273 615,273 615,273 229,932 229,932
– potentially economic reserves 156,682 156,682 156,682 156,682 156,208 147,645 147,645
– exploitable (recoverables) res. 2,544 2,107 2,165 1,903 1,903 1,903 1,903
Mine production 459 437 416 262 0 0 0
* Mine production of lignit has ended in 2009.
** Since 2011 numbers of reserves hasn’t changed.
Note: reserves numbers in kilotonnes (kt).
Source: Ministerstvo životního prostředí / Česká geologická služba – Geofond, 2018, p. 261
3.2.2 Brown Coal
Brown coal is a humolith with 65–69% carbon and 17–24 MJ/kg of calorific value. Brown coal is the main source of
energy in the Czech Republic, and domestic extraction presently provides complete coverage for domestic consumption.
Brown coal is therefore not imported, and only insignificant amounts are exported (around 1–2 million
tonnes per year, mainly to Slovakia). The largest deposits are located in the Mostecká (formerly North Bohemian),
Sokolovská, Chebská and Žitavská basins. Only the first two are currently under exploitation.
Tab. 3.3: Deposits, reserves and mine production of brown coal in the Czech Republic
2011 2012 2013 2014 2015 2016 2017
Deposits – total number 53 53 53 52 52 51 52
– exploited 10 11 11 10 9 10 10
Total mineral reserves 8,948,767 8,936,157 8,859,890 8,826,333 8,775,056 8,729,236 8,673,268
– economic explored reserves 2,361,825 2,347,268 2,308,649 2,273,951 2,239,329 2,203,911 2,210,477
– economic prospected reserves 2,063,444 2,063,444 2,062,445 2,062,445 2,062,445 2,059,589 2,059,859
– potentially economic reserves 4,523,498 4,525,445 4,488,796 4,489,937 4,473,282 465,466 4,402,932
– exploitable (recoverables) res. 871,142 862,202 825,322 796,277 749,075 714,356 681,540
Mine production 46,848 43,710 40,585 38,348 38,351 38,646 39,310
Note: reserves numbers in kilotonnes (kt).
Source: Ministerstvo životního prostředí / Česká geologická služba – Geofond, 2018, p. 163
There are four companies active in the extraction of brown coal in the Czech Republic: Severočeské doly, a. s.,
Vršanská uhelná, a. s., Severní energetická, a.s., and Sokolovská uhelná, právní nástupce, a.s.6
6	 The Czech Coal Group joins together three companies that are highly active in coal mining, namely Vršanská uhelná, a. s., Litvínovská
uhelná, a. s., and Důl Kohinoor, a. s. Taken together with Severočeské doly, a. s. and Sokolovská uhelná, právní nástupce, a. s. there are,
therefore, five coal mining entities in the Czech Republic.
The Coal Sector 47
Severočeské doly, a. s. is located in Chomutov. It is 100% owned by ČEZ, A. S. In 2017, it controlled
a 55.26% share of the brown coal market in the Czech Republic, making it the largest brown coal company
in the Republic. Extraction is underway at the Nástup Tušimice and Bílina Mines (see Severočeské doly,
a. s., 2018, p. 55).
Vršanská uhelná a.s. and Severní energetická a.s. are parts of the Sev.en group. They are located in Most.
Sev.en group emerged as a successor to Skupina Czech Coal. The Sev.en group is supported by financier Pavel
Tykač as well as Jan Dienstl, who is also chairman of the board. The group gathers together Vršanská uhelná, a.s.,
Most; Severní energetická, a.s., Most; Czech Coal, a. s.; Důl Kohinoor, a. s., combustion power plant in place in
Chvaletice since 2013, and approximately 30 smaller firms engaged in power and heat production and services.
Extraction is underway at the ČSA Mine (Severní energetická, a. s.) and Vršany (Vršanská uhelná, a. s.) (see Sev.
en Energy, 2018). One of the group’s subsidiaries, Důl Kohinoor, a. s., also operates the last working underground
brown coal mine in the Czech Republic, Důl Centrum. In 2017, the Sev.en group had a 27.13% share of the brown
coal market in the Czech republic, divided between Severní energetická a.s. with 10.59% and Vršanská uhelná
with 16.44 % (see Severočeské doly, a. s., 2017, p. 55).
The final company, Sokolovská uhelná, právní nástupce, a. s., located in Sokolov, is owned by František
Štěpánek (57.14%) and Jaroslav Rokos (45.86%). The third owner, Jan Kroužecký, sold his past 30% share in 2015.
In 2017, the company had a 17.71% share of the brown coal market in the Czech Republic (see Severočeské doly,
a. s., 2017, p. 55). Extraction is underway in the Jiří mine, which EIA approved in 2018 for prolonged functioning
until 2030 (see „V lomu Jiří“, 2018). Other mines, such as Družba and Marie, have been closed. (see Ministerstvo
průmyslu a obchodu, 2017).
It is brown coal in particular that must be monitored with regard to territorial environmental boundaries on
mining (see below). According to the Czech Geological Survey, as of December 2016, exploitable reserves of
brown coal amounted to approximately 784 million tonnes.
According to representatives of the coal industry, based on declining extraction trends, Czech reserves should
last until 2050 (see Carbonunion, 2018). There are approximately 880 million tonnes of coal in Czech coal mines
like ČSA, Bílina, and Vršany.
Tab. 3.4: Exploitable Reserves of Brown Coal and Their Limits
Basin Company Open Cast Mine Exploitable Reserves
As of
1/1/1999
As of
31/12/2009
As of
1/1/2014
As of
1/1/2015
North Bohemian Basin Vršanská uhelná a.s. Slatinice 12 12
Vršany 316 305* 272 266
In total 316 305 284 278
Severní energetická a. s. Centrum** – 0 1 1
ČSA 92 37.3 38 28
In total 92 37.3 39 29
Severočeskédoly, a. s. Nástup – Tusmice 412 247 219 210
Bílina 232 196 145 136
In total 644 443 364 346
Sokolovská Sokolovská uhelná,
právní nástupce, a. s.
In total*** 271 127 137 131
The Czech Republic in total 1,323 607.3 824 784
Note: figures indicated in thousands of tonnes.
* Including Šverma Open Cast Mine (with a lifespan of reserves until 2012).
** The underground mine Centrum was in April 2016 closed for any further coal mining.
*** Including mine Jiří. Družba Open Cast Mine was in August 2011 closed for any further coal mining.
Source: Ministerstvo průmyslu a obchodu, 2017
The Coal Sector48
3.2.3 Bituminous Coal7
Bituminous coal is a humolith that is composed of 69–92% carbon, with a calorific value of 24–33 MJ/kg. In
the Czech Republic, there are deposits of both energy and coking bituminous coal (see below), which makes bituminous
coal an important component in Czech exports. Altogether there are nine bituminous coal basins; by
far the largest and the only mine still active is the Czech section of the Upper Silesian Coal Basin, in particular
the Ostrava-Karviná district.
Tab. 3.5: Deposits reserves and mine production of bituminous coal in the Czech Republic
2011 2012 2013 2014 2015 2016 2017
Deposits – total number 62 62 62 62 62 62 62
– exploited 8 8 8 8 8 8 7
Total mineral reserves 16,339,004 16,324,263 16,315,667 16,304,609 16,304,846 16,285,605 16,283,583
– economic explored reserves 1,518,929 1,496,792 1,487,287 1,475,446 1,475,464 1,465,793 1,460,044
– economic prospected reserves 5,998,902 5,995,983 5,993,801 5,993,812 5,746,510 5,991,317 5,991,133
– potentially economic reserves 8,821,173 8,831,488 8,834,579 8,835,351 8,839,345 8,828,495 8,832,406
– exploitable (recoverables) res. 180,729 168,538 66,301 56,569 41,844 25,199 22,513
Mine production 10,967 10,796 8,610 8,341 7,640 6,074 4,870
Note: reserves numbers in kilotonnes (kt).
Source: Ministerstvo životního prostředí / Česká geologická služba – Geofond, 2018, p. 170
The only mining organization in the Czech Republic engaged in the production of bituminous coal is OKD, a. s.
(known prior to January 21, 1991, as Ostravsko-karvinské doly, a. s.). As the only company in the Czech Republic
to mine bituminous coal, OKD was struck hard by the global decline in demand for bituminous coal. As demand
declined and the price of bituminous coal dropped by almost two-thirds, the company suffered economically and
was forced to lay off employees (see “OKD propustí ke konci roku tři stovky lidí”, 2014). At the start of 2015, OKD
had approximately 11 thousand employees and an additional 3-thousand had close ties to the company. 1600 of
these employees and external workers were let go. (see “Unie schválila státní pomoc pro OKD”, 2015).
OKD was wholly owned by the Dutch company NWR (New World Resources N.V.), more than 50 % controlled
by the entrepreneurs Zdeněk Bakala and Peter Kadas. After unsuccessful attempts to find a way out of the economic
thicket by using state financial support or selling the company to the state, the two relinquished their stock
in the company, with the main share going to the Ad Hoc Group (AHG) in 2016. The government stayed as involved
as possible, even if its aid focused primarily on employees as opposed to saving the company itself, as had been
claimed Treasury Minister Andrej Babiš and Prime Minister Bohuslav Sobotka (see “Co bude dál s OKD”, 2016).
There were several initiatives to support OKD workers by finding them new jobs, offering them early retirement,
or even offering outright financial support (see “Co bude dál s OKD”, 2016).
Not long after the change in company ownership, AHG offered to sell OKD back into state ownership, since
with the drop in the price of bituminous coal, the company had taken on massive debt (see „Nový vlastník OKD“,
2016). But even AHG’s offer of CZK 3.2 billion was more than the company’s estimated value when its debts were
taken into consideration. As a result, during 2016, OKD’s dire economic situation led to a request that insolvency
proceedings be initiated. OKD’s presumed debt of CZK 17 billion was owed to more than 650 creditors, who decided
to try to save the company by reorganizing those components that were still economically viable. Afterwards,
the company was taken over by the state via Prisko (see “OKD je znovu státní firmou”, 2018).
Currently, OKD conducts operations in mines at Darkov and Karviná (renamed Důlní závod 1), and ČSM (renamed
Důlní závod 2), (all supposed to be closed until 2023 (ČSM is to be the last operational mine) (see “OKD
v roce 2017 dosáhlo tržeb”, 2018). The Paskov mine (renamed Důlní závod 3) was closed in 2017 because extraction
was no longer profitable (see “V Dole Paskov”, 2018). As a result, in 2017 OKD obtained a profit of CZK 3.4 billion.
7		 Anthracite, the most calorific and best coal, is not produced in the Czech Republic.
The Coal Sector 49
Tab. 3.6: Development of OKD mine production and profits
Year 2012 2013 2014 2015 1. 1. 2016 –
8. 5. 2016
9. 5. 2016 –
31. 12. 2016
2017
Volume of mining
(mil. of tons)
10.8 8.61 8.34 7.64 2.55 4.17 4.87
Profit (billions CZK) 1.2 -19.66 -10.1 -6.8 -2.68 -3.32 3.4
Average number of
employees (external
workers included)
17,639 16,073 14,749 13,755 12,445 11,341 ca. 9,500
Source: “OKD v roce 2017 dosáhlo tržeb”, 2018
Almost 75% of OKD’s production goes to five domestic users: ArcelorMittal Ostrava a. s., Třinecké železárny,
a. s., Group – Moravia Steel, a. s., OKK Koksovny, a. s., Dalkia Česká republika, a. s., and ČEZ, a. s. The remainder
is exported to Austria, Slovakia, Germany, Poland, and Hungary (see OKD, n.d.a.). The company plans to continue
mining in the Karviná region until 2024. Coal may be extracted from the ČSM Mine in Stonava underground on
the Polish side of the border by working under the river (see Januszek, 2010). The mine in question, Morcinek, is
owned by the Polish company Jastrzebska Spolka Weglowa S.A., and was shut down around 1998, although it had
not been mined to full capacity. In 2010, the mining company New World Resources N.V. unsuccessfully attempted
a takeover of the Polish Bogdanka mine. Management of the mine rejected an offer of about CZK 21.3 billion
(see Daniel, 2010), thus blocking the formation of what would have been one of the largest bituminous coal mining
companies in Central Europe, a region in which 190 million tonnes of extractable coking coal reserves are situated.
But the option has not been discussed since 2016, when the then-chairman and CEO suggested that OKD should
maintain the ČSM mine for access to the Morcinek mine in Poland (see “Rezerva – polský důl Morcinek”, 2016).
3.2.4 Exploitation of Coal and Trading
The exploitation of coal may be divided into two categories. The various types of brown coal, lignite and almost
one-third of the domestic extraction of bituminous (so-called energy) coal serve as the primary resource for combustion
heat and power production in heating plants, condensing power plants, and boiler houses, with heat in
most cases being a by-product of power production. The quality of coal and the modifications made to improve
it greatly influence the combustion process. In order to maximize coal combustion and make efficient use of its
calorific value, fireplaces are constantly being developed. From the original grates, on which the coal simply lay
without motion, the technology has advanced to more efficient grates that utilize a stationary or circulating fluid
surface and a powdery fireplace (see Jirásek & Vavro, 2008).
The second category involves the exploitation of a particular variety of hard coal called coking coal for the indirect
production of raw iron in a blast furnace. Through the process of regulated warming in the absence of air
(carbonization), a metallurgical coke–a hard, steel-grey material with a very high calorific value–is extracted from
bituminous coal8
, which simultaneously serves as a fuel and reducing agent. In addition to metallurgical coke
(about 75%), there is a vast array of side products that emerge during the carbonization process (coking gas, tar,
benzene, ammonia, naphthalene, etc.) that are utilized in the chemical, paper, pharmaceutical, textile, and leather
manufacturing industries (see Jirásek & Vavro, 2008). In 2016, 6.7 million tonnes of bituminous coal were extracted,
3.4 tonnes of which were coking, with 2.7 tonnes of energy coal. The largest (and only) coking plants in
the country are ArcelorMittal Ostrava, a. s.; OKK Koksovny, a. s. and Třinecké železárny, a. s.
In the Czech Republic, only entities with a permit from the applicable District Mining Authority may mine coal.
Such entities must pay royalties for the mining site. Just for bituminous and brown coal, the state received more
than CZK 703 million in 2017 from these remediation, recultivation, and mine damage royalties (see MŽP/ČGS-G,
2018, p. 110). All mineral materials that lie within Czech borders are under state ownership up to the point of extraction,
and by means of these fees, the state gives a de facto mining permit to the traders. The coal which is
extracted then becomes the property of the companies concerned.
8	 In a blast furnace for the production of iron, temperatures must be in the range of 1,700 to 1,900°C. The calorific value of coke traded in
the Czech Republic ranges between 26 and 29.5 MJ/kg.
The Coal Sector50
In the Czech Republic brown coal is traded almost exclusively on a long-term contract basis. The user makes
direct contact with the trading department of the producer with the intention of entering into a contract. Purchase
agreements, which are typically concluded for several years (usually 10–15), specify the amount of material, means
of supply, offtake location, transport, calorific value, qualitative parameters of supply (sulphur, water or ash), etc.
These long term contracts provide supply and operational security for consumers and for suppliers, secure, stable
extraction and income. The Počerady power plant, for example, burns about 4,000 tonnes of coal per day,
the Prunéřov I power plant 8,000 tonnes, and Prunéřov II as many as 20,000 tonnes of coal daily (see “Mrazivé
počasí,” 2010). Securing stable (and massive) supplies of coal is the top priority, to ensure the operating process
proceeds problem-free.
The trade in bituminous coal, which is carried out on either a long-term contract basis, as is the case with
brown coal, or via the commodity stock market HRAPRAKO (up until 1. 1. 2017, when the market was closed down;
see “Haprako, komoditni burza v likvidaci”, n.d.a.), is divided into two categories. Bituminous coal of a quality adequate
for coke for the blast-furnace production of raw iron, and which may also potentially be used for heating
purposes, is listed on the market as “coking coal”. Other varieties of bituminous coal are marked “bituminous
coal for energy purposes” and mainly serve in electric power production (see MŽP/ČGS-G, 2010, p. 162). These
categories form two more or less independent markets.
Brown coal plays almost no role in foreign trade. Out of 39.3 million extracted tonnes in 2017, the balance of
foreign trade registered only 0.99 million tonnes in exports (see MŽP/ČGS-G, 2017, p. 177). When it comes to bituminous
coal, exports accounted for 2.3 million tonnes. Meantime, 228 tonnes of coke were imported, with
744 tonnes of exports and imports (see MŽP/ČGS-G, 2018, p. 156–157). Bituminous coal was formerly a lead item
in Czech foreign trade.
3.3	 The Regulatory Framework of the Coal Industry
Mining in the Czech Republic is guided legislatively by three acts. The key act is without doubt No. 44/1988 Coll., on
the protection and utilization of mineral resources (the mining act, see Zákon č. 44/1988 sb.), followed by Act No.
61/1988 Coll., on Mining Activities, Explosives and the state mining administration (see Zákon ČNR č. 61/1988 sb.),
and Act No. 157/2009 Coll., on the Disposal of Mining Waste and Amending Certain Laws (see Zákon č. 157/2009
Sb). The latter came into effect on April 5, 2012.
The Mining Act establishes the principles for the protection and economic exploitation of mineral resources,
especially in prospecting and exploration work, in the opening, preparation, and extraction of mineral deposits,
the processing and refinement of minerals carried out in connection with mining, as well as the safety and environmental
protection in these operations. Under the Act, mineral deposits in the Czech Republic are owned by
the Republic.
Under the Mining Act, to mine coal within the country, an organization must obtain the approval of the District
Mining Authority, which delimits the mining area9
. Prior to submitting a proposal for the delimitation of the mining
space, an organization must obtain approval from the Ministry of the Environment, which is issued only after
consultation with the Ministry of Industry and Trade. The Ministry of the Environment may make the issuance
of such prior approval dependent on meeting conditions related to the creation of a unified raw material policy
for the Czech Republic and on the return of money from the state budget spent for the search and exploration
of reserve deposits.
An organization is obliged to pay the relevant District Mining Authority an annual fee for a mining claim on
each ha or part of the area of the claim within its surface boundaries; a government order sets the amount of
the fee within a range CZK 100 to CZK 1,000, graduated depending upon the degree of environmental protection
present in the affected area, the characterization of activities carried out, and their impact on the environment.
(see Zákon č. 44/1988 Sb.). Until the 2016 amendment of Act No. 89/2016 Sb., its Article §32 also set fees to which
mining organizations were subject. The amendment process saw this article expunged, and currently the only
fee is CZK 100 to CZK 300 per ha. This fee is paid once per calendar year, with the money going to the surrounding
villages most affected by mining.
9	 In terms of hierarchy, the mining area is a set of one or several deposits.
The Coal Sector 51
Act No. 61/1988 Coll., on Mining Activities, Explosives and the State Mining Administration places conditions
on mining activity and activity carried out in conjunction with mining , as well as on the handling of explosives and
explosive items, and the organization and scope of the State Mining Authority (see Zákon ČNR č. 61/1988 Sb.).
The organs of the State Mining Authority oversee mining activity, observe working conditions and the treatment
of extraction waste, and supervise compliance with Acts Nos. 44/1988 Coll., 61/1988 Coll., 157/2009 Coll.,
and other regulations (ordinances issued by the Czech Mining Authority, Czech Authority for Work Safety, etc.)
(see Státní báňská správa České republiky). The State Mining Authority is the chief supervisor of the mining sector
in the Czech Republic. The organs of the State Mining Authority are the Czech Mining Authority (the Central
Mining Authority), located in Prague, and nine District Mining Authorities10
. The Czech Mining Authority is the central
organ of the State Mining Authority of the Czech Republic, whose chair is appointed and dismissed by
the Government. The Czech Mining Authority keeps an overall record of mining areas and changes to them, and
executes obligations imposed by the European Commission.
Among other things, Act No. 157/2009 Coll., on the Disposal of Mining Waste and Amending Certain Laws
sets out rules for the treatment of mining waste and preventing any adverse environmental impact therefrom
(see Zákon č. 157/2009 Sb.). This act follows on two governmental decrees (see Nařízení vlády 167/2016 and
Nařízení vlády 342/2016) that focused primarily on ameliorating the negative social impact of the decline of
extraction mining.
Aside from the legislative and regulatory dimensions, there is also the Czech Geological Survey (originally
the Czech Geological Institute), the body that collects and processes data concerning the geological composition
of the land and then passes it on to administrative bodies for political, economic, and environmental decision
making. The Czech Geological Survey is tasked by the Ministry of the Environment with performing state
geological surveys. That makes it the only institution whose mission involves the comprehensive exploration of
the geological structure of the Czech Republic (see Česká geologická služba). Worth mention also is the Brown
Coal Research Institute, j. s. c. (VÚHU, a. s.) located in Most, which emerged as part of the transformation of
the former state company of the same name. Shareholders in the Institute are Vršanská uhelná, a. s., (44.580%)
and Severočeské doly, a. s. Chomutov (44.582%). VÚHU conducts exploratory, consulting, commissioning, and
servicing activity, directed primarily at mining-related issues (see Výzkumný ústav pro hnědé uhlí, a. s.).
In terms of the supranational legislative framework, there are a few directives from the Council of the European
Union and the European Commission that address explosives for civil use (for example 93/15/EEC or 2004/57/
EC). The European Association for Coal and Lignite (EURACOAL), functioning outside the regulatory framework,
emerged in 2002 as a result of the transformation of the European Committee on Solid Fuels (CECSO), covering
the European coal industry. EURACOAL is a lobbying organization gathering together 31 production and import
companies and research institutes in Europe. The goal of the organization, located in Brussels, is to warn about
the importance of coal in terms of security, competitiveness and the sustainability of energy supplies in Europe,
and to contribute to the establishment of a satisfactory European regulatory framework (see European Association
for Coal and Lignite). EURACOAL is in no manner connected to the EU institutions, although does cooperate with
the European Commission and the European Parliament. The member of EURACOAL in for the Czech Republic is
the Employers’ Association of Mining and Oil Industries of the Czech Republic, an independent voluntary organization
whose chief mission is to protect the interests of its members and formulate and pursue their objectives in
negotiations with state administrative bodies, unions, and other institutions. It consists of 24 companies, organizations,
and institutes that together represent the entire coal sector of the Czech Republic (See Zaměstnavatelský
svaz důlního a naftového průmyslu).
There is no legal mandate to maintain strategic reserves of coal in the Czech Republic; in reality, each coal
power plant does have certain “strategic” loads of coal, but because of the enormous volume of coal burned
every day, it is barely sufficient for a couple of days of operation. If coal freezes during the winter, the situation is
resolved by rotting the upper layer and subsequent collection or extraction underneath, where the coal is powdery,
in its normal state.
10	 In Kladna, Plzen, Sokolov, Trutnov, Brno, Most, Ostrava, Pribram and Liberec.
The Coal Sector52
3.4	 Demand Forecast
The basic priorities declared in the 2015 State Energy Concept are security, competitiveness, and sustainability
(See ”SEK”, 2015). This represents a significant turn away from the approach taken in the 2004 State Energy
Concept, because the basic priorities declared include maximum independence from foreign energy sources
and energy sources in risky regions, and reliable supplies from foreign sources (see “SEK”, 2004, p. 3). This shift
in priorities signals that the role of coal will inevitably decline, particularly in the electric power and heating industries,
and be replaced by renewables, nuclear energy, biomass, and the small, decentralized cogeneration
units of local heating systems.
Tab. 3.7: Shares of Solid, Liquid and Gas Fuels in Energy Resource Consumption According to the State Energy Policy of the Czech
Republic from 2004 and Updates from February 2010 and August 2012 (in %)
Type of
Fuel
Level in
2000
Level in
2016
Long-Term Goal
(SEP 2004)
by 2030
“Green” Scenario
(SEP 2004)
year 2030
Revised SEP
(2/2010)
Scenario by 2030
Revised SEP
Scenario (2/2010)
by 2050
Revised SEP
(8/2012) Target
Values by 2040
Revised SEP
Scenario (5/2015)
Scenario by 2040
Solid 52.4 40 30–32 30.5 24 20 12–17 11–17
Gas 18.9 16 20–22 20.6 20 21 20–25 15–25
Liquid 18.6 20 11–12 11.9 20 19 14–17 14–17
Nuclear 8.9 15 20–22 20.9 25 25 30–35 25–33
Renewables 2.6 10 15–16 15.7 11 15 17–22 17–22
Source: Státní energetická koncepce, 2004, p. 11–12, 40–49; Státní energetická koncepce, 2015, p. 44; Ministerstvo průmyslu a obchodu,
2010a, p. 77–92; Český statistický úřad, 2008; Ministerstvo průmyslu a obchodu, 2012, p. 20–21. Návrh vnitrostátního plánu ČR v oblasti
energetiky a klimatu, 2018, p.14
While solid fuels in 2016 maintained a 40% share in total consumption of primary energy sources in the Czech
Republic, this figure is to drop, according to the long-term goal declared in the 2015 State Energy Concept, to approximately
11–17%. A significant decline in solid fuel consumption since 2000 is already visible. The scenario predicted
by the 2015 State Energy Concept seems possible given the anticipated phase-out of several power plants11
.
The coal industry is truly at present on the threshold of major change. The century of steam ended long ago
and nowadays energy is produced in many different ways that are notably friendlier to the environment. In the competition
between natural gas, renewables and biomass on one side versus coal on the other, coal for now is still
the winner, mainly thanks to its substantially lower price. Emission allowances, the fervent interest of the European
Union in renewables, and the rising price of domestic coal as a result of the initial phase of a shortage, however,
are gradually eroding coal’s competitive advantage, and it is highly likely it will cease being the cheapest fuel in
succeeding decades.
Despite its future prospects, though, at present all system power plants in the Czech Republic depend on coal.
Although these power plants will gradually terminate their activity over the next two decades, the end will not
come abruptly12
. A sign of this may be seen in the government’s 2015 decision to extend mining across the territorial
environmental limits on brown coal mining in the Bílina mine, thereby exending the exploitation of coal
until approximately 2050 (See Ministerstvo průmyslu a obchodu, 2017). According to a OTE, a. s. study, we may
expect a decline in coal consumption due to dwindling reserves in tandem with territorial limits. Taking into account
greater pressure from ecological regulations, it may be anticipated that by 2050, around 1,400 MW will be
generated using brown coal. An important milestone should come after 2020 when stricter emission limits are
implemented and some power plants find themselves unable to meet regulatory requirements. One example is
the Počerady plant (see OTE, 2017, 24 – 25).
No massive departure from the use of coal as energy is to be expected, but rather it is to be rationalized. Coal
energy is anticipated to undergo a qualitative shift towards clean technologies, greater efficiency, and savings.
Modern technologies expected to play a significant role in the power industry of the future include cogeneration
with the use of fuel segments and combusting gas obtained via the gasification of coal (Hermann, Noskievič,
11	 ČEZ plans say that after 2035 only new or modernized power plants like Ledvice, Prunéřov, Tušimice, and Mělník should be in operation
(see „ČEZ plánuje do roku 2035“, 2017)
12	 Likewise, the global use of coal will not cease. Thermal power plants in China, for example, in 2008 made up 75% of installed capacity
with 792,000 MWe. Between 2011 and 2015, China plans to build thermal plants with a total capacity of 270,000 MWe (see Hui, 2011).
The Coal Sector 53
& Kolat, 1998, p. 306). As Tables 3.8 and 3.9 show, a switchover to decentralized heating systems is underway.
But still, coal power plants will maintain their significance in the thermal power plant system. Moreover, when
it comes to coal production, the Czech Republic in 2018 is ranked third in the European Union (45,313 tonnes of
coal extracted in 2016), behind Poland (130,631 tonnes) and Germany (175,625 tonnes)13
(see Simplified Energy
Balances, 2019). The sector faces further requirements from above in the form of EU insistence that Best Available
Techniques (BAT) be implemented to improve the efficiency of coal use. But to preserve economic competitiveness,
the Czech government has voted to seek for exceptions from the EU directive (see Parliament České republiky,
2018)
The December 2018 Draft of the National Energy and Climate Plan of the Czech Republic summarizes the greatest
challenge faced by the energy sector at present. There is support for shifting to natural gas, biomass, and
waste to operate heat power plants and even to use as a heat source in households, but with an emphasis on
the use of domestic sources of coal. But this use is to be made in a circumspect manner that stresses BAT and
the most efficient means of processing the coal.
In terms of energy security, it is unreasonable to build new power and heating plants that depend for their
functioning upon raw materials the Czech Republic does not possess. Such plants increase import dependence
and costs while they reduce energy security. The Czech coal sector is capable of enhancing the energy security
of the country, limiting foreign dependence on fossil fuels, supporting the stability of the electrical energy system,
all at an acceptable cost, while observing the mandate to protect the environment and fight climate change.
State decisions should express a clear position, and not only to the private sector.
3.5	 The Heat Supply Industry
Heat may be supplied via central heating facilities (in which case we speak of a central heating supply system),
as the output of a collection of heat sources (a decentralized heating supply system), or by individual facilities
(the local production of heat). A developed central heating system is driven by cogeneration plants, rating plants,
and partially by power plants in the thermal mono-generation regime, but chiefly in a combined production regime
of power and heat, which then sees thermal energy sold further to external users in the production sphere
or public sector (see Slivka et al., 2011, p. 10).
Heat demand in the Czech Republic (approximately 330 PJ) is met by a practically even mix of central and
decentralized systems. Heat pumps have recently come under discussion, but it is only expected to account
for roughly 2% of households by 2050 (See Návrh vnitrostátního plánu ČR v oblasti energetiky a klimatu, 2018).
The output of the central heating system is directed approximately two-thirds to the public sector (households
and services), with the other third going to industry (See Návrh vnitrostátního plánu ČR v oblasti energetiky a klimatu,
2018, p. 241). In terms of thermal energy sources (plants), there are almost 2,000 heat generation facilities
registered in the Czech Republic, 1,800 with over 5 MW of capacity. This infrastructure is connected by a network
of over 10 thousand kilometres. (see Zpráva o vývoji energetiky v oblasti teplárenství, 2016).
13	 Amount of extracted or produced fuel counted after the removal of ballast material.
The Coal Sector54
Tab. 3.8: The Balance of Thermal Energy from the Central Heating Supply System in 2010–2017
Indicator 2010 2011 2012 2013 2014 2015 2016 2017
Total production of thermal energy 147 134 134 135 118 119 126 122
Thermal energy consumed for power production 28 27 26 26 23 22 23 21
Of which:
power plants and thermal plants 149 136 136 137 120 121 128 123
heating plants 100 94 96 97 85 86 89 87
nuclear power plants 1.06 0.92 0.98 0.9 0.87 0.9 0.88 0.91
chemical and waste heat 0.97 1.29 1.31 1.28 1.36 1.39 1.41 1.51
electrical boilers 0.01 0.01 0.01 0.01 0 0.01 0.01 0.01
solar systems 0.37 0.48 0.56 0.63 0.69 0.74 0.79 0.83
thermal pumps 2.09 2.48 2.7 2.91 3.34 3.81 4.44 5.22
Export of thermal energy 0 0 0.11 0.1 0.09 0.09 0.07 0.08
Losses in the distribution lines 7 7 7 7 6 7 7 7
Final consumption 102 96 97 96 84 85 88 89
Of which:
industry 27 27 27 25 23 23 23 24
households 52 46 49 50 42 43 44 45
Note: figure indicated in tera joules (TJ).
Source: Bufka, Veverková a Modlík, 2019
Table 3.8 clearly shows that renewables are starting to be employed more, although still not to a significant
degree. During the last two years (shown in the table), heat exports have come to a halt. Over time there has
also been more successful management of losses in the distribution lines (attributable to better technologies).
Thermal energy consumption is also declining (one may assume as the result of greater heat savings, an emphasis
on energy efficiency, rising thermal energy prices, and some users switching from central to decentralized
heating systems).
Tab. 3.9: Fuel Mix for Production of Thermal Energy in the Czech Republic in 2017
Year Brown coal Bituminous coal Natural gas Biomass and waste combustion Fuel gas Other fuels
2018 46% 13% 25% 6% 5% 5%
Source: Bufka, Veverková a Modlík, 2019
The total share of coal in fuels for heat production in 2017 was 59%. As Slivka et. al. (2011, p. 14) have noted,
the share of domestic sources in the group of fuels used in the central production of heat stands at 68%, with
imported sources amounting to 32%. On this basis, we can conclude that there is (for now) rather low import
dependence and thus significant raw material security (as far as the heating sector is concerned). It is, however,
still not clear how large a threat a shortage of primary sources poses in the Czech Republic for the future. As table
3.8 shows, decentralized heating sources such as thermal pumps and electric boilers are rising in popularity.
With this trend, there is palpable pressure to either become part of the central heating system or else substitute
current household heating sources by low emission sources such as heat pumps utilizing, for example, grants
for change of boilers.
There is also increasing support for the combined production of electric power and heat (CHP) since this represents
a more efficient use of energy sources than condensation power plants. The latter are 30% to 40% efficient,
while modern cogeneration power plants may reach 90% efficiency (see “Kombinovaná výroba elektřiny
a tepla”, 2017). In 2018, almost 102 PJ of heat was produced using cogeneration in the Czech Republic (Tables 3.7,
3.8, and 3.9 overlap, with each presenting thermal energy production from a different perspective).
The Coal Sector 55
Tab. 3.10: CHP of Thermal Energy by sources in the Czech Republic in 2018
Production Brown coal Bituminous coal Natural gas Biomass Fuel gas Other fuels
102,3 PJ 56 PJ 12.8 PJ 11.1 PJ 12.1 PJ 4.8 PJ 5.5 PJ
100% 54.8 % 12.5 % 10,9 11,8 % 4,7 % 5,3 %
Source: ERÚ, 2019
As noted above, aside from these fuels, there are other sources of fuel being reconsidered as well. Nuclear
power plants that could supply a broad area with thermal energy have great potential. There is an ongoing
project that involves a heat line stretching from Temelín to České Budějovice that is intended to provide heat
to more than one-third of the city. Temelín already provides heat to the nearby town of Týn nad Vltavou (see
“Nový teplovod přivede teplo z Temelína”, 2018). A similar project was proposed for the Dukovany nuclear power
plant. The intent was that Dukovany would produce heat for Brno. But the existence of a newly-built biomass
heating plant makes it unlikely the project will be realized anytime soon (see “Obec Dukovany postavila
teplárnu na biomasu”, 2017).
By far the greatest potential–so far unemployed–lies in the energy exploitation14
of municipal waste15
. Mixed
municipal waste may be used for energy purposes in power and heat production facilities (combined cycle), while
incineration plants are being connected to the central heating system. There are three mixed waste incineration
plants in the Czech Republic: in Prague, Brno, and Liberec (see Zajíček, & Zeman, 2010, p. 27–29; Slivka et al.,
2011, p. 114). In 2017, mixed municipal waste amounted to 4.2 PJ, of which industrial waste accounted for 0.61 PJ
(see Bufka & Andronic, 2018). As Bufka and Andronic (2018, p.7) indicate, the percentage share of landfill municipal
waste is growing (by almost double since 2007, from 391 tonnes to 702 tonnes)16
. A waste-to-energy strategy
may thereby contribute to the use of domestic energy sources and a reduction in import dependence at the same
time it assists in solving the problem of landfill waste in the Czech Republic.
The average price of thermal energy for end users when coal is used to produce it is 571.87 CZK/GJ. For natural
gas or biomass, it is 565.09 CZK/GJ (see ERÚ, 2019, p. 9). The price of thermal energy is by far the highest in
the Prague region (623 CZK/GJ), with the second most expensive prices in the South Moravian region (601 CZK/GJ).
Share of coal in heat generation in South Moravia is makes less than 1 % on contrary in Prague, there is up to
45 % share of coal in their heat generation.
The least expensive thermal energy is produced in the Pardubice region, followed by the Vysočina region.
While coal is used as the source in up to 70% of heat production in Pardubice, in the Vysočina Region, it accounts
for only 6%. No clear pattern emerges in these four regions that would reveal whether having coal power plants
contributes to higher thermal energy prices–this despite the fact that ERÚ claims such a pattern exists (2019, p. 14).
Biomass is significant in that its share of thermal production is now at almost 6%. In assessing price as a function
of source, the most important factor is the price at which switching from a central to a decentralized heating
system proves profitable.
Central heating plants serve 40% of Czech households (see Zpráva o vývoji energetiky v oblasti teplárenství,
2016). The biggest competitor to the central heating system is local heating with natural gas. Heating plants and
networks are usually the property of municipalities and the private sector in a 50:50 ratio. The largest producers
(i.e. distributors) of thermal energy are companies that in most cases are owned by municipalities. Traditional
producers of electrical power buying shares in various heating plants are, however, also struggling to enter
14	 There are three de facto conditions which must be met in any discussion of waste-to-energy exploitation: the waste must burn by itself
(aside from the ignition phase it does not require any fuel), the heat generated must be used for one’s own or other people’s purposes,
and it must reach a minimum of 60%, or 65% of energy efficiency respectively (see Zajíček & Zeman, 2010, p. 31).
15	 ‘Municipal waste’ means all the waste produced in a community by people in their day-to-day lives, not by businesses (see “Zákon č.
158/2001 Sb.”). It consists of used items and mixed municipal waste. Reusable items like paper, glass, plastics, beverage cartons, and
so on are separated out and sent for recycling. Waste separation operates at a high standard in the Czech Republic, meaning the enormous
amount of municipal waste cannot be substantially further reduced. Mixed municipal waste may either be sent to landfills or put
to further use (by combustion in incineration plants). Mixed municipal waste contains around 50 to 60% of biomass, with calorific value
ranging from 8 to 15, but usually in the 9 to 11 range, of GJ/ton (see Zajíček, & Zeman, 2010, p. 25, 28, 37-38, 45).
16	 Installed thermal capacity in incineration plants in 2008 amounted to 175.7 MWt, while electrical capacity was only 2.9 MWe. The exploitable
supply of heat was at the 2,500 TJ level. The potential for further production is, however, much higher: 15,750 TJ of heat and
0.5 TWh of electricity per year (see Zajíček, & Zeman, 2010, p. 39-40, 45).
The Coal Sector56
the market. The leading companies in the heat supply industry include, Pražská teplárenská, Teplárny Brno,
Plzeňská teplárenská, Teplárna České Budějovice, and Teplárna Ústí nad Labem (see “Teplárenství – Obchod
a trh,” n.d.).
The central heating supply system in the Czech Republic has a number of advantages compared to other
sectors as well as a number of disadvantages. There are also some threats present that, if they come to pass,
could undo the advantages the heating supply industry currently enjoys, or even result in its demise altogether.
That production sources are located outside residential areas is a primary advantage of central heating systems,
one that has a positive impact on municipal air quality and reduces the volume of emissions compared to
local heating facilities, generally allowing better management and elimination of emissions. By using domestic
fuels (which are also less expensive), the heating industry achieves greater independence from imports and greater
energy security. As part of the combined production of power and heat, the heat supply industry is proven to
utilize fuels better (efficiency up to 60%) and is becoming more flexible. It also exploits renewable and secondary
sources of energy. Its major liabilities lie in the demands of construction, the problem of heat loss in distribution
lines, more complex measurement, management, and regulation requirements, and the demand for adaptation
in the marketplace (mainly regarding thermal energy) (see Slivka et al., 2011, p. 20, 155).
There is, however, another real threat, and that is the lack of availability of domestic fuels at an acceptable
price (an issue related primarily to related to brown coal). Coal supply contracts are being terminated, mining
is gradually declining, and there is uncertainty about coal beyond the environmental limits of extraction.
A positive is that not all available coal sources have yet been exhausted. Where there is a shortage of coal,
the lifespan of plants (and not just thermal plants) diminishes rapidly. A study by Slivka, et al. commissioned
by the Ministry of Industry and Trade, moreover, warns of the shortcomings of substituting coal by the potential
alternatives natural gas, biomass, or coal imported from Germany or Poland. They center on such solutions’
economic, waste, and security risks (see Slivka et al., 2011, p. 20, 23, 155). The greater the use of natural
gas, the greater the dependence on external sources (quite likely the Russian Federation) which is unwanted.
The potential of biomass is in decentralized and local heating systems; importing coal from abroad would
lack profitability and negate the chief advantage of a central heating system, which is the local availability of
sources. Such arguments were mostly heard in the discussion on extending across territorial environmental
limits on brown coal mining.
A lack of coal would hit not only the production of thermal energy but of electrical power as well. Both processes
are therefore interconnected technologically and economically, so a shortage of coal as a fuel would affect
the final score of both forms of energy, as well as the prices and economics of heating plants. Accordingly,
the present benefits of central heating supply could cease to be (see Slivka et al., 2011, p. 18–19). The Pačes
Commission found a lack of fuel for heat supply systems to be a significant threat to the Czech energy economy
(see ÚVČR & NEK, 2008, p. 169). In the Draft National Energy and Climate Plan of the Czech Republic the lack
of fuel for heat is mentioned as well, but there is visible progress in that the Draft puts forth several proposals
for overcoming a coal shortage. It must be borne in mind, though, that any shortage of coal would jeopardize
the country’s heat supply sector (see Návrh vnitrostátního plánu ČR v oblasti energetiky a klimatu, 2018, p. 42)
Without long term contracts to ensure fuel supplies, the majority of centralized sources would be doomed.
This would then lead to the breakup of central heating system overall (see MPO, 2011b, p. 26). The following table
presents the demand forecast for brown coal to the year 2050.
The Coal Sector 57
Tab. 3.11: Forecast Demand for Brown Coal According to EGU Brno
Year 2010 2015 2020 2025 2030 2035 2040 2045 2050
Production of brown coal 44,025 36,100 35,000 30,000 26,000 16,000 5,000 5,000 5,000
Future demand of ČEZ, A. S. 26,530 29,230 21,100 16,600 12,550 11,700 4,700 4,700 4,700
Future demand of independent
producers
13,535 13,085 13,465 13,235 11,880 7,940 4,340 3,830 3,830
Future demand of other users 2,800 2,400 2,200 1,900 1,600 200 200 200 200
Possible export 1,160 200 – – – – – – –
Total demand 44,025 44,915 36,765 31,735 26,030 19,840 9,240 8,730 8,730
of which:	 for electricity 32,316 32,968 26,986 23,293 19,106 14,563 6,782 6,408 6,408
	 for heat 6,635 6,769 5,540 4,782 3,923 2,990 1,392 1,316 1,316
contracted 44,025 42,810 35,370 28,000 24,210 15,930 290 200 200
Difference between sources and
demand
0 -8,815 -1,765 -1,735 -30 -3,840 -4,240 -3,730 -3,730
Difference between sources and
contracts
-6,710 -370 2,000 1,790 70 4,710 4,800 4,800
Note: data indicated in 1,000 tonnes; For prediction of brown coal demand in 2015 (44,915,000 tonnes), an alternative lower calculation
of demand has been processed, amounting to 40,885,000 tonnes. In the same brown coal extraction forecast, the difference between
supply and demand would fall to -4,030,000 tonnes.
Source: Slivka et al., 2011, p. 43.
As is visible above, the production of brown coal would not practically be able to cover the demand of the heating
industry from about 2015 without extending across territorial environmental limits in Bílina. Nor would it cover
the needs of the heat supply industry. The difference between domestic coal production and demand depends
on the further development of coal production – whether environmental limits will be breached at the ČSA mine,
how other sectors of energy production will evolve, and to what extent emission limits will be implemented at
the power plants.
Another significant problem for the Czech heating industry is the use of renewables as fuels. According to
Slivka et al. (2011, p. 8), the importance and availability of renewables and savings on the consumption side are
significantly overrated. The potential of renewables in the Czech Republic is practically exhausted, especially in
terms of wood cut-offs, while the use of wood cut-offs remains competitive relative to its use in the paper and
wood processing industry and local heating. Currently, the only non-exploitable potential (believably 500,000
to 1 million tonnes by 2020 expressed using a brown coal equivalent) then lies in mixed municipal waste, which
could partially replace classical fuels. The energetic potential of fuels from other waste is fairly marginal with regard
to applicable legislation (primarily environmental limits–emissions, the necessary modification of fuels that
would require the purification of materials hazardous to health, and so on).
3.6	 The Issue of Extraction Limits
Territorial environmental limits on brown coal mining are subject to Government Resolution No. 444/1991 on
Territorial Environmental Limits on Brown Coal Mining in the North Bohemian Basin of October 30, 1991. This
resolution specified boundary lines for limited mining and landfill in the quarries Merkur, Březno, Libour, Šverma,
Vršany, ČSA, Ležáky, Bílina, and Chabarovice; in Ruzodolska and Radovesicka, for landfills; and in basins in the regions
of Chomutov, Most, Teplice, Ústí nad Labem, and Louny, it set the limiting values for air pollution (see Vláda
České republiky [VČR], 1991). The idea behind the limits was to provide these regions with some sort of governmental
guarantee that the municipal environment would not worsen, and to give those who live there a stable
basis for local investment, reconstruction, etc. Territorial environmental limits on brown coal mining have been
a topic of political discussion for years now (see Lehotský, et al. 2019). The issue has gotten more urgent, however,
as private coal companies have come closer to reaching these limits. Within the next few years, they will have
reached the extraction limits, leaving local power and heating plants without an inexpensive source of energy.
Accordingly, there has been a push since about 2003 to recognize the growing risk of a power crisis entailing
massive blackouts and the collapse of power supplies.
The Coal Sector58
The Government’s position on the problem of extraction limits may be illustrated on the basis of its policy statements.
In 2006, the Government declared it would maintain the territorial limits on brown coal mining and that it
would not pursue the construction of new nuclear blocks (see VČR, 2006, p. 13). In 2007, the Government once
more declared that it would maintain the territorial limits on brown coal mining. Also it announced that it would
neither plan nor support the construction of new nuclear blocks. Based on a consensus of all three political parties
in Government and consultation with the opposition, it was agreed to set up an independent expert commission
to assess the long-term energy needs of the Czech Republic (see VČR, 2007, p. 9). In 2010, the Government announced
that it would urge the territorial limits on brown coal mining be maintained along with their legal specification,
but also proposed a new mining act conditioned upon the economic exploitation of raw materials reserves.
This Independent Expert Commission for the Assessment of the Long-Term Energy Needs of the Czech
Republic (the Pačes Commission) declared in 2008 that it was “… likely that the existing mining limits would sooner
or later be breached to the point of the geological stability of the region. (...) Disproportionately large‑scale mining
and the export of electricity were according to the Commission therefore profitable, accounting for the equivalent
of approximately 20 million tonnes of brown coal per year, which would rapidly bring us closer to the limits
and push the coal companies to breach them” (see ÚVČR & NEK, 2008, p. 65). The Pačes Commission supported
the government program, which did not recommend breaching the coal limits, simply pointing out that due to
the trend in the Czech energy sector, mining beyond the limits should be expected sometime soon. In that context,
it also recommended considering whether to give an advantage to the use of local coal for the production
of heat (see ÚVČR & NEK, 2008, p. 65).
The 2015 State Energy Conception called for the Ministry of Trade and Industry to present a report on the socioeconomic
impact of further exploitation on the environment and on the health of inhabitants. A focus of the study
was the heat supply industry (See “SEK”, 2015). That study led on October 19, 2015 to a government document
entitled “Further Approaches to the Territorial Environmental Limits on Brown Coal Mining in the North Bohemia
Area” (See Hospodářská komora České republiky, 2015).
Four options were considered based on these results: a) maintaining the limits as is, b) shifting the limits
for the Bílina mine, c) shifting the limits for the Bílina mine and partially shifting the limits for the ČSA mine,
and d) shifting the limits for the Bílina mine and completely shifting the limits for the ČSA mine.
The Government decided for option b), shifting the current limits for the Bílina mine. A new limit line was set
approximately 500 metres from the built-up area of the village. The territorial environmental limits stayed put in
the ČSA mine but even there, there is the chance they will be extended across. The document also stated that if
the Government decide to shift the limits only for the Bílina mine, there will be a further evaluation of the shift at
the ČSA mine. The decision on the shift should come in 2020 and be based on the construction of new nuclear
power units that would replace a significant part of the power generated by thermal power plants (see Ministerstvo
průmyslu a obchodu, 2017). Even the Policy on Raw Materials of the Czech Republic notes that coal mining is an
important source of energy, because it contributes to energy security and partial self-sufficiency.
There are three general opinions on mining limits in the Czech Republic. One group is clearly opposed to
their breach. This group includes the Czech Green Party17
, the Christian and Democratic Union – Czechoslovak
People’s Party and, more recently based on their policy statements, TOP 09 and the Mayors and Independents
party, as well. A second group by contrast is in favour of breaching the mining limits, primarily motivated by social
factors such as regional unemployment rather than energy policy reasons. This group consists of the Communist
Party of Bohemia and Moravia. Finally, a third group has no clearly defined stance, sometimes even acting inconsistently.
It centres on the Civic Democratic Party and the Czech Social Democratic Party (see Ocelík et al.,
2019). ANO party demonstrated this inconsistency by claiming it did not support breaching the limits at the same
time the Minister of the Environment, party member Richard Brabec, voted to do so (see Parlament ČR, 2016).
It goes without saying that aside from the affected municipalities, by far the greatest opponents of breaching
the limits are environmental organizations. Their argument is based on both the perceived potential of renewables,
decentralization, insulation and savings, diversification and cogeneration (see Polanecký, Rovenský,
Sequens, Sedlák, & Kotecký, 2009) and on legal aspects. They also base their arguments on what has occurred
in foreign countries that have abandoned the rhetoric of the security of electricity supply and seen their energy
sectors transition towards low emissions (see Černoch et al., 2019; Energynautics, 2018).
17	 The Czech Green Party has had no deputies in the Chamber of Deputies since the 2017 election.
The Coal Sector 59
The problem of the Czech coal (and, therefore, heat supply) sector lies primarily not in territorial environmental
limits on brown coal mining, but in the lack of preparedness of consumers, above all heating plants. They speak
of basic uncertainty regarding the behaviour of mining companies and the future of coal prices. The mining companies,
however, behave in a relatively predicable manner as they follow market principles. Coal is slowly running
out, so its price may be logically expected to rise, since not even a nearly thirty-year period from 1991, when
the limits were approved, has been adequate for the majority of heating plants to prepare and replace their fuel
bases. That means unprepared heating plants have to buy coal, which plays right into the hands of the mining
companies. They can afford not to prolong long-term contracts, which are mostly about to expire, and offer coal
on the market on a short-term basis in smaller volumes. It is therefore likely that the mining companies will greatly
benefit from setting the coal price on an auction basis. Moreover, if the heating plants do not buy coal, there
are always steam power plants also interested in energy coal18
.
The policy of not prolonging contracts with heating plants started with the Czech Coal Group (the predecessor
of the Sev.en group). It mines the coal in the ČSA mine, which has the largest volume of coal lying outside the limits.
If the limits are maintained, Sev.en Energy AG will be without coal in the ČSA mine by 2021 and in Vršany by 2058;
if the limits are exceeded, mining in the ČSA mine will be prolonged until 2068 in the first stage, 2115 in the second,
and 2145 in the third (see Czech Coal, 2012). Both state companies, Severočeské doly, a.s., and Sokolovská
uhelná, právní nástupce, a.s., extract coal and via their owners own coal power plants and heating plants. On
the one hand, they have a sure base of coal sales; on the other, they are unable to supply free coal to the market.
The Sev.en group did not have this vertical ownership infrastructure, which made it dependent on market forces.
This resulted in the Sev.en group refusing to prolong existing contracts, failing to close new ones,19
and offering
its coal on the market in an effort to lift the price of coal as high as possible. Accordingly, it struggled to acquire
its own power plant or heating plant to increase the value of its coal. The biggest dispute was between Sev.
en Energy AG and the ČEZ Group. Sev.en Energy AG, originally the Czech Coal Group, terminated a letter of intent
with ČEZ, A. S. to provide it with coal for the coming decades, which then led to a complaint by the ČEZ Group (see
Adámková, 2010a, p. 68). In 2013, the two companies came to an agreement and the ČEZ Group sold the Chvaletice
thermal power plant (4 × 205 MW) to the Sev.En Group (see “ČEZ prodá elektrárnu Chvaletice”, 2013).
It would therefore be best to divide the entire issue into 1) territorial environmental limits on brown coal
mining, the future of the coal sector, the heat supply industry and the State Energy Concept on the one hand,
and 2) the business strategies of the Czech Coal Group, which came undone with the influx of territorial limits, on
the other. Unfortunately, it seems that the Ministry of Industry and Trade to a degree has bowed before the lobbying
pressure from the Czech Coal Group as well as from the Association for District Heating of the Czech Republic.
The shortage of coal can certainly be resolved over the long-term, for example using imports, priority heat
production, the exploitation of biomass, the development of nuclear power or the waste-to-energy method. It is
unfortunate that these companies did not address the problem in 1991 when the territorial environmental limits
initially entered into effect. Along with these pressing long-term problems, new issues have arisen in conjunction
with emissions permits that hinder the competitiveness of the coal industry and the global climate change movement,
which has already given rise to European directives on best available practices and seen emissions limits
set for medium combustion plants (e.g. Directive 2015/2193 on the Limitation of Emissions of Certain Pollutants
into the Air from Medium Combustion Plants).
3.7	 Coal War
A significant dispute arose in the Czech energy sector over coal for Czech heating plants and received prominent
media coverage in the 2009–2013 period. The quarrel involved the Czech Coal Group (currently known as
a Severní energetická), represented by Pavel Tykač and Jan Dienstl; a trio of billionaire associates (Daniel Křetinský,
Petr Kellner (PPF) and Patrik Tkáč (J&T)), representing Energy and Industry Holding (EPH, s.r.o.) as the strongest
18	 At auction in May 2009, a tonne of several sorts of brown coal was sold for 1,696 CZK, while the price of brown coal based on the place
of origin, calorific value, and category regularly ranged between 1,740 and 3,690, or respectively CZK 5,000 (briquettes) per tonne (see
“Přehled cen”, 2011). Thus auction trading has not raised the coal price at all.
19	 The company’s argument is that, due to the 1991 limits, there is a lack of coal for all interested parties (see Adámková, 2010a, p. 68).
The Coal Sector60
actor20
within the Association for District Heating of the Czech Republic; and the parastatal ČEZ group headed
by Daniel Beneš (until September 2011, by Martin Roman). The ČEZ Group took from Czech Coal approximately
8.5 million tonnes of coal per year, a significant share of Czech Coal’s overall production (14.15 million tonnes in
2011). The majority of this coal went to the Počerady power plant near Most, whose position and importance will
be addressed below.
What was the nature of this clash of Czech energy titans? At first glance, it would seem like an effort by Czech
Coal to press for higher prices. Czech Coal demanded an initial purchase price of 70 CZK/GJ and that the future
price be fixed at 80% of the average global coal price. The Group justified this sharp price hike by pointing to the requirement
to have the funds necessary to restart mining if and when current limits on the ČSA mine were removed.
This move naturally met with strong resistance from ČEZ and the Association of District Heating, headed by EPH,
s.r.o. They highlighted the high gains the Group had generated over the long-term while stressing that the request
to peg the coal price to that of the global markets was excessive. Although ČEZ’s leadership (predominately under
Martin Roman) struggled to find an alternative solution21
, the lack of a compromise in 2012/2013 would provoke disastrous
consequences in terms of limited production in the Počerady coal-fired power plant. The plant depended
entirely on Czech coal. According to ČEZ, the contract was to be maintained until 2060, but prior discussions had
been turbulent. Here one must bear in mind that as Počerady was and still is dependent upon coal, so were Czech
Coal’s sales dependent upon Počerady. The sparring parties arrived at a dead end from which there seemed no return,
while media attacks put increased pressure on both sides. “If there is further disagreement, we are prepared
to limit mining, even at the cost of temporarily foregoing any profit” is, for example, how Jan Dienstl reacted in March
2012 when asked where the present coal war might lead (see “Hoši z Motoinvestu roztáčejí kola”).
Although it might seem so at first glance, the conflict was not initially just a price dispute. It was really centred
on redrawing the ownership map of Czech power plants. One option often raised during the coal war was
a merger between the Počerady power plant and Vršany Mine. Czech Coal had given notice it was interested in
purchasing Počerady during talks with ČEZ as far back as 2009. It likewise expressed interest in the Chvaletice
power plant as well, and this becamethe key issue later in 2013. The opencast mine’s owner found this a logical
step, one which would ensure a sale.22
As noted below, the holder of both power plants, ČEZ, in this case, had to
contend with EPH’s interests as well.
The rivalry between EPH and Czech Coal related to another case–the sale of International Power Opatovice,
a company which took in both the Opatovice power plant and the Mělník heating plant and, in parallel, Pražská
teplárenská. Czech Coal expressed interest in the purchase, but the buyer was a subsidiary of the J&T Group
(a shareholder in EPH which was made part of its newly created structure), East Bohemia Energy Holding Limited.
Although the decision to sell Opatovice came as early as June 2009, it was put on hold until a decision by the Office
for the Protection of Competition prompted by Czech Coal. The argument was that after the purchase, the J&T
Group could abuse its dominant position in the market. The Office, however, did not deem this a serious threat,
and the entire transaction was executed by 2009. It amounted to 22.5 billion CZK, which might seem rather overpriced
when compared to the actual company’s value.
Czech Coal did not give up its battle against EPH and ČEZ. It passed the investigation initiative on to
the European Commission. Specifically, Czech Coal complained that J&T could have secretly bought International
Power with the ČEZ Group’s money, because by itself it lacked the CZK 22 billion needed to assume control of
the property, while the Office for the Protection of Competition would not allow ČEZ itself to execute the purchase.
The European Commission, therefore, in September 24, 2009, raided the HQs of ČEZ, EPH, and Severočeské doly.
After the raid, ČEZ terminated negotiations. In 2012, EPH was fined 2.5 million EURO (around CZK 60 million)
by the European Commission. The Commission justified the penalty by the company’s failure to cooperate with
regulators during the 2009 raid and, therefore, to provide them with relevant documentation.
The coal war was a personal matter for EPH, s.r.o. also since it is coal from Most that it uses for its Opatovice
20	Energy and Industry Holding emerged in 2009 from the fusion of capital by powerful investment groups. It is further internally subdivided,
with energy matters overseen by EP Energy. It gathers together Plzeňská energetika, United Energy, Elektrárny Opatovice,
Slovenské elektrárne, Mibrag, Větrné elektrárny Pchery, Pražská teplárenská, Aise, Powersun and United Energy (see Energeticky
a průmyslovy holding).
21	 By a resolute increase of finances, the supplies for Počernice might have been remediated from the North Bohemian Basins, owned
by ČEZ.
22	Should the existing power plants fail, Czech Coal is considering building its own facilities.
The Coal Sector 61
power plant in, obtained via the purchase of International Power Opatovice noted earlier. The long-term contract
for the plant was to expire in 2015. On July 7, 2012, though, the Czech Coal Group, cancelled the contract because
of an alleged debt of CZK 500 million. The Regional Court in Usti nad Labem nonetheless concluded that Czech
Coal Group had to continue to provide power supplies for at least a year, which was until the end of 2013 (this
provision was a part of the contract) (see Vlček & Černoch, 2013, p. 467). After this date, from the second half of
2013, Opatovice had no ensured coal supplies.
In talking about the dispute between these energy titans, we should also note another issue related to
the events above. In 2011, Czech Coal reported ČEZ to the European Commission requesting an administrative
proceeding. The European Commission suspected ČEZ was accumulating capacities in the transmission
system in order to prevent the competition from entering the market. Specifically, the company was suspected
of reserving capacity to connect its power plants with the operator of the Czech transmission system CEPS
to such an extent that other projects were precluded from taking their own share from CEPS. Czech Coal thus
gave the impression that the speculative circumstances prevented it from developing its own project involving
the construction of a coal‑fired power plant in Počerady (see “Czech Coal poskytl Evropské komisi podklady”).
ČEZ defended itself by arguing that it reserved the capacity for construction of the combined cycle power plant
in Počerady, which began in March 2011. According to recent estimates, Czech Coal wants to connect its power
plant to the network by 2021. With that in mind, at the end of 2011 it closed a contract with CEPS for the allocation
of 660 MW of capacity.
Links between the Czech political scene and the energy business are ever-present. In case of the coal war
they were apparent in the selection of former Prime Minister Mirek Topolánek as Chairman of the Association of
District Heating.23
The selection of Topolánek, who was proposed for the post by Opatovice power plant (EPH),
where he sat on the Supervisory Board, provoked a range of emotions. Specifically, the long-term relationship between
EPH (the dominant player in the Association for District Heating), its co-owner, the J&T Group, and the former
Prime Minister were brought up.24
Immediately after his selection, Topolánek began to lobby actively against Czech Coal’s effort to raise the price
of coal. The Association for District Heating at the beginning of 2012 then filed a claim that argued Czech Coal was
using its dominant position on the brown coal market to manipulate prices (see “Teplárny si v Bruselu stěžují”).
Thus the situation in 2012 was rather chaotic, with little chance to predict further developments. By the end of
the year, though, everything had changed as it became clear that Czech Coal would come to an agreement with
the parastatal ČEZ. The agreement between Czech Coal and ČEZ had accordingly paved the way for further business,
even though both contracts were presented as mutually independent. In particular, the Chvaletice brown
coal power plant was sold. Very few observers would have expected in 2012 that Czech Coal would get the plant
(the sale price was CZK 4.12 billion) instead of EPH. But it was definitively EPH that by mid-2013 had got the short
end of the bargain, and this naturally had a negative impact on the leading position of Křetinský in the EPH.
The agreement provisions were as follows: the price of coal for the Počerady power plant was fixed, with its
maximum to remain below 40 CZK/GJ. The agreement anticipated linear growth in prices to at least 2023. That was
originally supposed to be the last year of Počerady’s lifespan, but in 2019 Sev.en Group (formerly Czech Coal) once
again tried to buy the plant and thereby increased the chances that its lifespan would be extended (see “Počerady:
Získá Tykač”, 2019). The most workable option to do so would seem to be to modernize the plant, but given current
EU emission limits, this does not seem to be economically recoverable, which leaves only putting Počerady out of
operation. Under the contract, ČEZ could sell the power plant to Vršanská uhelná, that is to Severní energetická.
Such a sale is currently under consideration. But this would mean that that the modernization would have to be
implemented by ČEZ alone, as Počerady in its current state would not be able to achieve the emission standards.
The disputes within the Czech energy market didn’t come to a close in 2013 even though that may have been
the peak year for heated discussions. In 2019, for example, competition focuses on the sale of the Alpiq power
plants in Czech Republic. The same three companies–ČEZ, Sev.en Energy AG, and EPH– have shown interest
in buying the natural gas power plant in Kladno (524 MWe) and the coal power plant in Zlín (64 MWe) (see “ČEZ,
Sev.en Energy a EPH”, 2019).
23	The Association for District Heating is an interest group of legal entities doing business in the field of heating supply, founded in 1991
and currently consisting of 89 members.
24	A link between Topolánek and J&T was implied already during the so-called Tuscan affair, during which high political officials were photographed
on a joint vacation with the top representatives of J&T.
The Coal Sector62
3.8	 Sources
Adámková, A. (2010). Boj o energetické uhlí zatím nekončí. Pro-Energy magazín, 2010(1), pp. 68-69.
Brož, J. (2019, February 22). Počerady potřetí: Tykač má další šanci získat elektrárnu ČEZ. Euro. Retrieved from
https://​www​.euro​.cz​/byznys​/Po​č​erady​-potreti​-Tykač​-ma​-dalsi​-sanci​-ziskat​-elektrarnu​-ČEZ​-1440120
Bufka, A., Andorinc D. (2018, May). Statistika energetického využívání odpadů a alternativních paliv
1989–2017. Retrived from https://​www​.mpo​.cz​/assets​/cz​/energetika​/statistika​/obnovitelne​-zdroje​-energie​
/2018​/6/Statistika​-energetickeho​-vyuzivani​-odpadu​-a-alternativnich​-paliv​-1989​_2017​.pdf
Bufka, A., Veverková J., Modlík M. (2019, February 2). Souhrnná energetická bilance České republiky za roky
2010 – 2017. Retrieved from https://​www​.mpo​.cz​/cz​/energetika​/statistika​/energeticke​-bilance​/souhrnna​
-energeticka​-bilance​-statu​-v-metodice​-eurostatu​-za​-leta​-2010​-2017​--243586/
Carbonunion (2018, August 27). Jak velké jsou zásoby uhlí v ČR? Přinášíme vám přehled! Retrieved from
https://​www​.carbounion​.cz​/radce​/jak​-velke​-jsou​-zasoby​-uhli​-v-cr​-prinasime​-vam​-prehled
Černoch, F., Lehotský, L., Ocelík, P., Osička, J., Vencourová, Ž. (2019). Anti-fossil frames: Examining narratives
of the opposition to brown coal mining in the Czech Republic. Energy Research and Social Science,
Amsterdam: Elsevier Ltd., Vol. 54, pp. 140–149. ISSN: 2214-6296. https://​doi​.org​/10​.1016​/j.erss​.2019​.04​.011
Český statistický úřad. (2008). Spotřeba paliv a energií v členění podle odvětví. Retrieved from
http://​vdb​.czso​.cz​/vdbvo​/tabparam​.jsp​?voa​=​tabulka​&​cislotab​=​ENE0030UU​&&​kapitola​_id=34
ČEZ odstaví nejvíc uhelných elektráren v historii. Bloky o výkonu více než jeden gigawatt nahradí ekologické
zdroje (2019, March 27). Hospodářské noviny. Retrieved from https://​byznys​.ihned​.cz​/c1​-66542160​-ČEZ​-odstavi​
-uhelne​-elektrarny​-s-vykonem​-pres​-gigawatt​-od​-pristiho​-roku​-je​-maji​-zacit​-nahrazovat​-ekologictejsi​-zdroje
ČEZ plánuje do roku 2035 odstavit více než polovinu svých českých uhelných elektráren (2017, April 19).
oEnergetice. Retrieved from https://​oenergetice​.cz​/elektrina​/ČEZ​-planuje​-do​-roku​-2035​-odstavit​-vice​-nez​
-polovinu​-svych​-ceskych​-uhelnych​-elektraren
ČEZ prodá elektrárnu Chvaletice Litvínovské uhelné. Křetínského EPH neuspěl (2013, March 19). Hospodářské
noviny. Retrieved from https://​byznys​.ihned​.cz​/c1​-59534800​-ČEZ​-proda​-elektrarnu​-chvaletice​-litvinovske​
-uhelne​-kretinskeho​-eph​-neuspel
ČEZ, a. s. (2019). Uhelné elektrárny v ČR. Retrieved from http://​www​.ČEZ​.cz
ČEZ, Sev.en Energy a EPH daly nabídku na české aktiva Alpiqu (2019, May 15). oEnergetice. Retrieved from
https://​oenergetice​.cz​/energetika​-v-cr​/reuters​-ČEZ​-sev​-en​-energy​-a-eph​-daly​-nabidku​-na​-česká​-aktiva​-alpiqu/
ČTK (2017, November 21). V novém nadkritickém bloku elektrárny Ledvice začal dvouletý zkušební provoz.
OEnergetice. Retrieved from http://​oenergetice​.cz​/elektrina​/v-novem​-nadkritickem​-bloku​-elektrarny​
-ledvice​-zacal​-dvoulety​-zkusebni​-provoz/
Czech Coal (2012, November). Aktuální otázky těžebního průmyslu v ČR. Most. Retrieved from
https://​slideplayer​.cz​/slide​/11203366/
Daniel, P. (2010, November 30). NWR převzetí polského dolu Bogdanka nevyšlo. E15.cz. Retrieved from
http://​www​.e15​.cz/
Důl u Mikulčic se plní vodou, horníci už se výplat zřejmě nedočkají (2019, March 26). iDnes. Retrieved from
https://​www​.idnes​.cz​/brno​/zpravy​/Důl​-uhli​-mikulcice​-plneni​-vyhodou​-hornici​-vyplaty​.A190323​_465715​
_brno​-zpravy​_krut
Energetický a průmyslový holding. Available at http://​www​.epholding​.cz​/ep​-energy
Energetický regulační úřad (2018). Čtvrtletní zpráva o provozu ES ČR za II. čtvrtletí 2018. Retrieved from
http://​www​.eru​.cz​/documents​/10540​/4580207​/Ctvrtletni​_zprava​_2018​_II​_Q.PDF​/62bda567​-dfae​-4644​
-ad42​-84d1f111c39b
Energetický regulační úřad (2019). Roční zpráva o provozu ES ČR 2018. Retrieved from http://​www​.eru​
.cz​/documents​/10540​/4580207​/Rocni​_zprava​_provoz​_ES​_2018​.pdf​/1420388b​-8eb6​-4424​-9ad9​
-c06a57b5326c
Energetický regulační úřad. (2010b). Roční zpráva o provozu ES ČR 2009 – ERÚ. Retrieved from
http://​www​.eru​.cz​/user​_data/fi les/statistika_elektro/rocni_zprava/2009/index.htm
Energynautics (2018, May 22). Czech Power Grid Without Electricity from Coal by 2030: Possibilities for
Integration of Renewable Resources and Transition into a System Based on Decentralized Sources.
Retrieved from https://​glopolis​.org​/en/_publications​/jak​-muze​-česká​-sit​-zvladnout​-utlum​-uhelnych​
-elektraren​-a-n​á​stup​-obnovitelnych​-zdroju
The Coal Sector 63
ERÚ (2019, January 9). Vyhodnocení cen tepelné energie a jejich vývoj k 1. lednu 2018. Retrieved from
http://​www​.eru​.cz​/documents​/10540​/462928​/Vyhodnoceni​+​cen​+​tepelne​+​energie​+​k​+1​.+1​.+2018​.pdf​
/52e55ec8​-0287​-4409​-a1eb​-a2e21d02f65f
European Association for Coal and Lignite. Retrieved from http://​www​.euracoal​.org/
Haprako komoditní burza v likvidaci (n.d.a.). Peníze.cz. Retrived from
https://​rejstrik​.penize​.cz​/27796230​-hraprako​-komoditni​-burza​-v-likvidaci
Hoši z Motoinvestu roztáčejí kola uhelné války. (2012b, March 22). Ekonom. Retrieved from
http://​ekonom​.ihned​.cz​/c1​-55116420​-hosi​-z-motoinvestu​-roztaceji​-kola​-uhelne​-valky
Hospodářská komora České republiky (2015, August 19). Řešení dalšího postupu územně ekologických limitů
těžby hnědého uhlí v severních Čechách. Retrieved from https://​ipodpora​.odbory​.info​/soubory​/dms​
/wysiwyg​_uploads​/ad6e7ab50ead6f94​/uploads​/Reseni​_dalsiho​_postupu​_uzemne​_ek​.pdf
Hui, L. (2011, January 6). China aims to expand thermal power capacity by 80 mln kw in 2011. xinhuanet.com.
Retrieved from http://​www​.xinhuanet​.com​/english2010/
Jirásek, J., & Vavro, M. (2008). Nerostné suroviny a jejich využití. Studijní materiál Ministerstva školství,mládeže
a tělovýchovy ČR & Vysoké školy báňské – Technické univerzity Ostrava. Retrieved from
http://​geologie​.vsb​.cz​/loziska​/suroviny​/index​.html
Kdo vlastní české uhelné elektrárny (2016, October 23). iUhli.cz. Retrieved from https://​iuhli​.cz​/kdo​-vlastni​
-České​-uhelne​-elektrarny/
Kolat, P. & Roubíček, V., & Kozaczka, J. (2008). Pokročilé energetické technologie. Skripta pro Katedru
energetiky Fakulty strojní, Vysoká škola báňská – Technická univerzita Ostrava.
Kombinovaná výroba elektřiny a tepla (kogenerace) v České republice (2017, August 26). oEnergeticeI. Retrived
from https://​oenergetice​.cz​/teplarenstvi​/kogenerace​-v-Č​eské​-republice
Lehotský, L., Černoch, F., Osička, J., and Ocelík, P. (2019). When climate change is missing: Media discourse on
coal mining in the Czech Republic. Energy Policy, Amsterdam: Elsevier Ltd., Vol. 129, pp. 774–786.
ISSN: 03014215. https://​doi​.org​/10​.1016​/j.enpol​.2019​.02​.065
Ministerstvo průmyslu a obchodu (2017). Surovinová politika České republiky v oblasti nerostných surovin
a jejich zdrojů. Retrieved from https://​www​.mpo​.cz​/cz​/stavebnictvi​-a-suroviny​/surovinova​-politika​/statni​
-surovinova​-politika​-nerostne​-suroviny​-v-cr​/nova​-surovinova​-politika​-v-oblasti​-nerostnych​-surovin​-a-jejich​
-zdroju​---mpo​-2017​--229820/
Ministerstvo průmyslu a obchodu. (2010a). Aktualizace Státní energetické koncepce České republiky – únor
2010. Retrieved from http://​download​.mpo​.cz​/get​/26650​/45632​/552383​/priloha001​.pdf
Ministerstvo průmyslu a obchodu. (2012). Aktualizace Státní energetické koncepce České republiky – srpen
2012. Praha: MPO.
Ministerstvo životního prostředí / Česká geologická služba – Geofond. (2017). Surovinové zdroje České
republiky – nerostné suroviny (Statistické údaje do roku 2016). Praha: Česká geologická služba – Geofond.
Ministerstvo životního prostředí/ Česká geologická služba – Geofond. (2012). Surovinové zdroje České
republiky – nerostné suroviny (Statistické údaje do roku 2011). Praha: Česká geologická služba – Geofond.
Retrieved from http://​www​.geology​.cz​/extranet​/publikace​/online​/surovinove​-zdroje​/SUROVI​-NOVE​
-ZDROJE​-ČESKÉ​-REPUBLIKY​-2012​.pd
Ministerstvo životního prostředí/ Česká geologická služba – Geofond. (2018). Surovinové zdroje České
republiky – nerostné suroviny (Statistické údaje do roku 2017). Praha: Česká geologická služba – Geofond.
Retrieved from http://​www​.geology​.cz​/extranet​/publikace​/online​/surovinove​-zdroje​/surovinove​-zdroje​
-České​-republiky​-2018​.pdf
Mrazivé počasí severočeské elektrárny nezaskočilo. (2010, January 27). regionycr.cz. Retrieved from http://​
www​.regionycr​.cz​/view​.php​?hlasovani​=​3​&​cisloclanku​=​2010010871​&​rstema​=&​rsstat​=&​rskraj​=&​rsregion=
Nařízení vlády č. 167/2016 Sb. ze dne 11. května 2016 o příspěvku ke zmírnění sociálních dopadů souvisejících
s restrukturalizací a útlumem činnosti právnických osob v insolvenci zabývajících se těžbou černého uhlí.
Retrieved from https://​www​.zakonyprolidi​.cz​/cs​/2016​-167​?text​=t​%C4​%9B​%C5​%BEba​+​uhl​%C3​%AD
Nařízení vlády č. 342/2016 Sb ze dne 5. října 2016 o příspěvku ke zmírnění sociálních dopadů souvisejících
s restrukturalizací nebo útlumem činnosti právnických osob zabývajících se těžbou uhlí nebo uranu.
Retrived from https://​www​.mpo​.cz​/assets​/cz​/prumysl​/prumysl​-a-zivotni​-prostredi​/zahlazovani​-nasledku​
-hornicke​-cinnosti​/2017​/1/342​_2016​.pdf
The Coal Sector64
Návrh vnitrostátního plánu České republiky v oblasti energetiky a klimatu (2018 December) Retrieved from
https://​www​.mpo​.cz​/en​/energy​/strategic​-and​-conceptual​-documents​/the​-draft​-of​-national​-energy​-and​
-climate​-plan​-of​-the​-czech​-republic​-public​-consultation​--242764/
Nový teplovod přivede teplo z Temelína do Českých Budějovi (2018, December 20). tzbinfo. Retrieved from
https://​energetika​.tzb​-info​.cz​/124122​-novy​-teplovod​-privede​-teplo​-z-Temel​í​na​-do​-ceskych​-budejovic
Nový vlastník OKD nabídl státu prodej firmy za necelé čtyři miliardy korun. Mládek to odmítá (2016, April 24).
Hospodářské noviny. Retrieved from https://​byznys​.ihned​.cz​/c1​-65263550​-novy​-vlastnik​-okd​-nabidl​-statu​
-prodej​-firmy​-za​-necele​-ctyri​-miliardy​-korun​-mladek​-to​-odmita
Obec Dukovany postavila teplárnu na biomasu, lidé za teplo ušetří (2017, November 22). tzbinfo. Retrieved from
https://​energetika​.tzb​-info​.cz​/122175​-obec​-dukovany​-postavila​-teplarnu​-na​-biomasu​-lide​-za​-teplo​-usetri
Ocelík, P., Svobodová, K., Hendrychová, M., Lehotský, L., Everingham, J.-A., Ali, S.H., Badera, J., Lechner, A.
A Contested Transition toward a Coal-Free Future: Advocacy Coalitions and Coal Policy in the Czech
Republic. Accepted for publication in Energy Research and Social Science.
OKD je znovu státní firmou, akcie převzal podnik Prisko (2018, April 4). iDnes.cz. Retrieved from
https://​www​.idnes​.cz​/ekonomika​/podniky​/okd​-doly​-stat​-prisko​-tezba​-Karviná​.A180404​_132941​_ekonomika​
_mato
OKD. (n.d.a.) OKD po roce 1990. Retrieved from http://​www​.okd​.cz​/cz​/o-nas​/strucna​-historie​-okd​/okdpo​-roce​
-1990/
OTE (2017). Zpráva o očekávané dlouhodobé rovnováze mezi nabídkou a poptávkou elektřiny a plynu.
Retrieved from https://​www​.sand​.ote​-cr​.cz​/cs​/statistika​/dlouhodoba​-rovnovaha​-elektrina​/files​_ddr​_e_uvod​
/prezentacni​-material​.pdf
Parlament České republiky (2016, February 11), Ústní interpelace ministra životního prostředí Richarda Brabce.
Retrieved from http://​www​.psp​.cz​/eknih​/2013ps​/stenprot​/039schuz​/s039331​.htm
Parlament České republiky (2018, May 23). Vládní návrh zákona, kterým se mění zákon č. 201/2012 Sb.,
o ochraně ovzduší, ve znění pozdějších předpisů. Retrieved from https://​www​.psp​.cz​/eknih​/2017ps​
/stenprot​/013schuz​/s013026​.htm
Počerady: Získá Tykač jednu z nejšpinavějších uhelných elektráren v Evropě? (2019, February 28).
Denikreferendum. Retrieved from http://​denikreferendum​.cz​/clanek​/29184​-Po​č​erady​-ziska​-Tykač​-jednu​
-z-nejspinavejsich​-uhelnych​-elektraren​-v-evrope
Přehled cen uhlí a koksu. (2011, March). TZBinfo. Retrieved from http://​www​.tzb​-info​.cz​/prehled​-cenuhli​
-a-koksu
Rezerva – polský důl Morcinek (2016. May 5). Horník. Retrieved from https://​issuu​.com​/ihornik​/docs​/hornik​
-2016​-17/10
Sev.en Energy (2018a). Sev.en Energy AG. Retrieved from http://​www​.7.cz​/cz​/elektrina​/elektrarna​-chvaletice​.html
Sev.en Energy (2018b). Těžba hnědého uhlí. Sev.en EC. Retrieved from http://​www​.7.cz​/cz​/uhli​/tezba​.html
Severočeské doly, a. s. (2018). Výroční zpráva 2017. Retrieved from https://​www​.ote​-cr​.cz​/cs​/o-spolecnosti​
/soubory​-vyrocni​-zprava​-ote​/zoor​_2017​.pdf
Simplified energy balances (2019, April 24). Eurostat, Retrieved from http://​appsso​.eurostat​.ec​.europa​.eu​/nui​
/show​.do​?dataset​=​nrg​_101m​&​lang=en
Slivka, V. a kol. (2011, February 11). Studie stavu teplárenství. Retrieved from http://​download​.mpo​.cz​/get​/43593​
/48917​/575386​/priloha002​.pdf
Státní báňská správa České republiky. Retrieved from http://​www​.cbusbs​.cz/
Státní energetická koncepce České republiky (schválená snesením vlády 18. května 2015). Retrieved from
https://​www​.mpo​.cz​/dokument158059​.html
Státní energetická koncepce České republiky (schválená usnesením vlády České republiky č. 211 ze dne
10 března 2004). Retrieved from http://​download​.mpo​.cz​/get​/26650​/45632​/552381​/priloha003​.doc
Teplárenství – Obchod a trh (n.d.). Retrieved from http://​www​.mojeenergie​.cz​/cz​/teplarenstvi​-obchod​-a-trh
Tisová již patří Sokolovské uhelné (2017, January 4). iUhli.cz. Retrieved from https://​iuhli​.cz​/Tisová​-jiz​-patri​
-sokolovske​-uhelne/
Úřad vlády ČR, & Nezávislá energetická komise. (2008, September 30). Zpráva Nezávislé odborné komise pro
posouzení energetických potřeb České republiky v dlouhodobém časovém horizontu. Retrieved from
http://​www​.vlada​.cz​/assets​/ppov​/nezavisla​-energeticka​-komise​/aktuality​/zpravanek081122​.pdf
UVR Mníšek pod Brdy, a. s. Retrieved from http://​www​.uvr​.cz/
The Coal Sector 65
V Dole Paskov se připravují první demolice. Pod zemí zůstaly miliony tun uhlí (2018, November 26). CT24.
Retrieved from https://​ct24​.česk​á​televize​.cz​/regiony​/2662949​-v-dole​-paskov​-se​-pripravuji​-prvni​-demolice​
-pod​-zemi​-zustaly​-miliony​-tun​-uhli
OKD propustí ke konci roku tři stovky lidí. Vedení chce štíhlejší firmu. (2014, October 13). iDnes.cz. Retrieved
from https://​www​.idnes​.cz​/ostrava​/zpravy​/okd​-propusti​-ke​-konci​-roku​-tri​-stovky​-lidi​.A141013​_130218​
_ostrava​-zpravy​_jog
V lomu Jiří se bude asi těžit dál (2018, December 21). iUhli.cz. Retrieved from
http://​iuhli​.cz​/v-lomu​-Ji​ří​-se​-bude​-asi​-tezit​-dal/
Vláda České republiky. (1991). Usnesení vlády České republiky ze dne 30. října 1991 č. 444 ke zprávě o územních
ekologických limitech těžby hnědého uhlí a energetiky v Severočeské hnědouhelné pánvi. Retrieved
from http://​kormoran​.vlada​.cz​/usneseni​/usneseni​_webtest​.nsf​/WebGovRes​/7DCED4838DD30F​
-36C125716006B9ABD​?OpenDocument
Vláda České republiky. (2006, September 27). Programové prohlášení vlády 2006. Retrieved from
http://​www​.vlada​.cz​/assets​/clenove​-vlady​/historie​-minulych​-vlad​/prehled​-vlad​-cr​/1993​-2007​-cr​/Mí​rek​
-topolanek​-1/Programove​-prohlaseni​-vlady​.pdf
Vláda České republiky. (2007, January 17). Programové prohlášení vlády 2007. Retrieved from
http://​www​.vlada​.cz​/assets​/clenove​-vlady​/historie​-minulych​-vlad​/prehled​-vlad​-cr​/1993​-2007​-cr​/Mí​rek​
-topolanek​-2/Programove​-prohlaseni​-vlady​_1.pdf
Výzkumný ústav pro hnědé uhlí, a. s. Retrieved from http://​www​.vuhu​.cz/
Zajíček, M., & Zeman, K. (2010, August). Energie z odpadů – (zatím) nevyužitý potenciál. Praha: Oeconomica.
Zákon č. 157/2009 Sb., o nakládání s těžebním odpadem a o změně některých zákonů. Retrieved from
http://​www​.cbusbs​.cz​/docs​/zakon2009​-157​.doc Zákon č. 158/2001 Sb., o odpadech a o změně některých
dalších zákonů. Retrieved from http://​www​.mzp​.cz
​/www​/platnalegislativa​.nsf​/d79c09c54250df0dc1256e8900296e32​/8FC3E5C15334AB9DC12572
7B00339581​/$fi le/185-01 %20- %20odpady.pdf
Zákon č. 44/1988 Sb., o ochraně a využití nerostného bohatství (horní zákon) jehož úplné znění bylo uveřejněno
v zákoně č. 439/1992 Sb., ve znění pozdějších změn provedených zákonem č. 10/1993 Sb., zákonem č.
168/1993 Sb., zákonem č. 366/2000 Sb., zákonem č. 132/2000 Sb., zákonem č. 258/2000 Sb.,zákonem č.
315/2001 Sb., zákonem č. 61/2002 Sb., zákonem č. 320/2002 Sb., zákonem č. 150/2003 Sb., zákonem č.
3/2005 Sb., zákonem č. 386/2005 Sb. a zákonem č. 313/2006 Sb. Retrieved from http://​www​.cbusbs​.cz​
/docs​/zakon1988​-044​.doc
Zákon č. 89/2016 ze dne 3. března 2016,kterým se mění zákon č. 44/1988 Sb., o ochraně a využití nerostného
bohatství (horní zákon), ve znění pozdějších předpisů. Retrieved from https://​www​.zakonyprolidi​.cz​/cs​/2016​-89
Zaměstnavatelský svaz důlního a naftového průmyslu. Retrieved from http://​www​.zsdnp​.cz/
Zpráva o vývoji energetiky v oblasti teplárenství (2016, December). Ministerstvo průmyslu a obchodu. Retrieved
from https://​www​.mpo​.cz​/assets​/cz​/energetika​/strategicke​-a-koncepcni​-dokumenty​/2017​/2/Zprava​
-o-vyvoji​-energetiky​-v-oblasti​-teplarenstvi​_verze​_8.pdf
Unie schválila státní pomoc pro OKD, z firmy letos odejde 1600 horníků. (2015, February 12). iDNES.cz.
Retrieved from https://​www​.idnes​.cz​/ostrava​/zpravy​/eu​-schvalila​-600​-milionu​-uzavreni​-dolu​-paskov​
.A150212​_121640​_ostrava​-zpravy​_kol
Co bude dál s OKD? Kde najdou horníci práci? Odpovídáme na hlavní otázky po vyhlášení insolvence (2016,
May 4). Aktuálně. Retrieved from https://​zpravy​.aktualne​.cz​/ekonomika​/co​-znamena​-insolvence​-okd​-cerne​
-vyhlidky​-cernouhelne​-firmy​-v/r~cb68cd86115611e68d00002590604f2e/
OKD v roce 2017 dosáhlo tržeb 16,8 miliardy Kč a zisku 3,4 miliardy Kč. (2018, April 23). Insolvenční zóna.
Retrieved from http://​www​.insolvencnizona​.cz​/aktuality​/okd​-v-roce​-2017​-dosahlo​-trzeb​-168​-miliardy​-kc​
-a-zisku​-34​-miliardy​-kc/
The Oil Sector66
Chapter 4: The Oil Sector1
Tomáš Vlček, Ľubica Bodišová, Jana Červinková
4.1	 Introduction
The Czech Republic enjoys diversified oil supply routes via the Druzhba and IKL pipelines. By 1962, oil was already
flowing through the primary pipeline in Czechoslovakia, routed from the Soviet Union through the southern branch
of the longest pipeline in the world – the Druzhba. The Druzhba Pipeline was the first to operate over Czech territory.
It was brought down to Bratislava in 1962 (in present-day Slovakia) and extended to Záluží u Mostu (now LitvínovZáluží
in the Czech Republic) in 1965. In 1990, the Adria pipeline was launched in south-western Europe. It had
been “ready” since 1984 and was built as a joint venture between Yugoslavia, Hungary, and the Czechoslovakia.
Soon afterwards, however, the pipeline was already unable to handle the required capacity and there was a real
threat that Czechs would be excluded from its offtake as a result of increasing offtake by Slovakia and Hungary.
Because of this, and because of emerging issues with Russian oil companies and potential subsequent troubles
with oil supplies via the Druzhba Pipeline, in 1990–1992 it was decided to build another pipeline, the IKL, to run
a route from Ingolstadt via Kralupy nad Vltavou to Litvínov) (see MERO ČR, a. s.). The IKL Pipeline was opened
on March 13, 1996. The Druzhba Pipeline provides the Czech Republic with 60–70% of its import volume, with
the remaining 30–40% supplied over the IKL Pipeline (for more details, see Table 4.1).
Tab. 4.1: Pipeline Routes in the Czech Republic
Druzhba IKL
Start of Supply 1962 (Slovakia), 1964 (Czech Rep.) 1996
Transport Capacity (Mt/y) 9 11
Supply Volume (Mt, 2014) 3,729 3,640
Percentage Rate (%, 2014) 50.6 49.4
Supply Volume (tonnes, 2015) 3,929 3,202
Percentage Rate (%, 2015) 55.1 44.9
Supply Volume (tonnes, 2016) 3,439 1,884
Percentage Rate (%, 2016) 64.6 35.4
Utilization (%, 2014/2015/2016) 41.4 / 43.6 / 38.2 33 / 29.1 / 17.12
Source Russia, Kazachstan Algeria, Azerbaijan, Italy, Kazakhstan,
Libya, Nigeria, Norway, Russia, Syria
Pipeline Transit Countries Russia, Belarus, Ukraine, Slovakia Italy, Austria, Germany
Note: The southern branch of the Druzhba Pipeline, which transports supplies to the Czech Republic, crosses Almetevsk–Kuybyshev–
Unecha–Mozyr–Brody–Uzhhorod–Sahy–Litvinov. Also, crude oil coming from Russia is not necessarily Russian.
Sources: MERO, n.d.a; Ministerstvo průmyslu a obchodu, 2015b, p. 2; Ministerstvo průmyslu a obchodu, 2016, p. 2; Ministerstvo průmyslu
a obchodu, 2017, p. 2;
1		 This chapter makes reference in some places to the publication of the research project The Future of the Druzhba Pipeline as
a Strategic Challenge for the Czech Republic and Poland (see Černoch, Dančák, Koďousková, Leshchenko, Ocelík, Osička, Šebek,
Vlček, & Zapletalová, 2012) and the document Current Issues and Projects in the Field of Storage and Transportation of Oil to the Czech
Republic (see Vlček, & Černoch, 2013).
The Oil Sector 67
4.2	 Deposits, Production, Companies and Traders
The Czech oil market may be divided vertically into four main levels. At the top is international carrier oil, followed
by processing plants, with distributors at the third level, and finally traders in crude oil and oil products at the lowest
level. In addition to these four main levels, there is a fifth located somewhere between international carriers
and processing plants. This level is made up of Czech production companies, whose share on the oil industry is
too small to affect the integrated structure of the remaining four levels.
4.2.1 Deposits and the Production of Oil in the Czech Republic
There are no significant oil resources in the Czech Republic. Oil is present only in small deposits in the Vienna
Basin and in the Carpathian Foredeep Basin in South Moravia. Oil deposits are mostly tied to natural gas deposits.
Domestic production accounts for two to three per cent of the volume of oil supplied to the Czech Republic
over the long-term.
Tab. 4.2: Deposits, reserves and oil well production of oil in the Czech Republic
2011 2012 2013 2014 2015 2016 2017
Deposits – total number 33 34 39 37 38 39 39
– exploited 27 27 30 29 28 33 33
Total mineral reserves 30,891 30,781 28,811 27,094 28,953 28,959 30,546
– economic explored reserves 20,326 20,108 21,236 21,100 21,402 21,428 21,386
– economic prospected reserves 3,983 4,092 1,758 1,747 1,735 3,355 3,345
– potentially economic reserves 6,582 6,581 5,817 5,816 5,816 5,816 5,815
– exploitable (recoverables) res. 1,664 1,628 1,534 1,449 1,379 1,504 1,401
Oil well production 163 150 152 148 126 116 107
Note: reserves in kilotonnes (kt).
Source: Ministerstvo životního prostředí / Česká geologická služba, 2016, p. 189; Ministerstvo životního prostředí / Česká geologická
služba, 2018, p. 167.
There are three oil-producing companies in the Czech Republic: MND, a.s., LAMA GAS & OIL s.r.o. and
UNIGEO. MND, a.s., Hodonín, was formed by transformation of the state enterprise MND Hodonín, s.p. in 1992.
Since July 2010, it has been 100% owned by the KKCG group of the entrepreneur Karel Komárek, whose parent
company KKCG SE is based in Cyprus. It is part of the MND Group AG. The company holds licences for six exploration
sites covering 2,241 km2
, and 77 production licences for deposits in South-East Moravia (see MND, n.d.).
The group also holds exploration licenses in the Russian Federation, and it operates in multiple countries, including
Germany, Slovakia, Ukraine, and Georgia. LAMA GAS & OIL, s.r.o., Hodonín is part of the LAMA ENERGY
GROUP, a.s. The company operates 13 active wells for both oil and gas, and extracts on average 15–20 m3
of oil
per day. Based on experience and know-how gained in the Czech Republic, the company is currently planning to
expand its activities to Alberta, Canada (see LAMA Energy Group, 2018, p. 9, 12). UNIGEO, a.s., Ostrava-Hrabová,
which as of 2014 is 100% owned by TOUZIMSKY KAPITAL, s.r.o., has been extracting oil since 2003 from a single
deposit, Krásna pod Lysou horou, in the Moravian-Silesian Beskids. The oil is then exported to Polish refineries
(see UNIGEO a.s., n.d.).
4.2.2 International Carrier Oil
The exclusive operator of international oil pipelines in the Czech Republic is MERO ČR, a.s. The company, based
in Kralupy nad Vltavou, owns and operates the Czech section of the Druzhba and IKL pipelines. It is the sole
carrier of oil to the Czech Republic and the most important company providing emergency storage of strategic
oil reserves. MERO ČR, a.s. is the 100% shareholder in a subsidiary named MERO Germany GmbH which is
based on the Danube in Vohburg, Germany, and operates and maintains the IKL pipeline in Germany as well as
a 200,000 cubic metre crude oil tank in Vohburg. The 100% owner of MERO ČR, a.s. is the Ministry of Finance.
The company also owns and operates the Central Crude Oil Tank in Nelahozeves, with a capacity of 1,550,000 cubic
metres, where the operational and strategic reserves for the Administration of State Material Reserves are
stored (see Zaplatílek, 2007, p. 69).
The Oil Sector68
The total length of the Druzhba Pipeline is 3,840 km (see “Druzhba Pipeline”, 2009, p. 56). On Czech territory,
it has a maximum throughput capacity of 9 Mt of oil annually. It is 357 km long in the Czech Republic (or 473 km
including doublings and branches), and the pipe diameter is 528 mm (700 mm in the Moravian section) with
a flow rate of oil of 1–1.4 m/s (see MERO CR). The pipeline brings oil from the Russian regions of Western Siberia
and the Volga-Urals.
The IKL pipeline has a maximum throughput capacity of 11 Mt a year. It is 168.6 km long in the Czech Republic,
and the pipe diameter is 714 mm with a flow rate of 0.5 to 1.2 m/s. The total length of the pipeline from Vohburg
to the Central Crude Oil Tank Nelahozeves CCOT is 347.4 km (see MERO CR).
In 2016, Unipetrol RPA, a.s. signed a framework contract with Jadranski Naftovod, d.d. (so-called JANAF) for
oil to be carried over the Adria oil pipeline. According to Unipetrol, this oil pipeline could become an alternative
supply route for the Czech Republic. The Adria Pipeline starts at Omišalj terminal in Croatia and goes through
Hungary to Slovakia, where it is connected to the Druzhba (see Unipetrol, 2016). In February 2019, an amendment
to the gas contract was signed, extending it to 2021. Nevertheless, Unipetrol does not have signed framework
contracts for the Slovak and Hungarian sectors of the pipeline; thus gas cannot be carried into the Czech
Republic (see “Do Česka nyní ropovodem“, 2019).
Tab. 4.3: The Oil Pipeline Network of the Czech Republic
Source: MERO ČR, a. s., (http://www.mero.cz/).
MERO ČR, a.s. is the sole provider of transportation services for oil to the Czech Republic. It does not own
any oil. Processor plants realizing contracts with crude oil suppliers also must arrange transport contracts with
MERO ČR, a.s. This company provides its services based on tariff charges fixed in the long-term contract with
the oil processor. Oil is traded on the basis of long-term (up to five-year) contracts, quarterly, and on the spot market
(i.e. monthly), with about half of demand supplied through spot transactions.
4.2.3 Processing Plants
There are two processing companies in the Czech Republic - Unipetrol RPA, s.r.o. and Paramo, a.s., both
part of the Unipetrol Group. Each is divided into two more oil refineries that make up the four oil refineries in
the Czech Republic.
Unipetrol RPA, s.r.o., based in Litvínov, is the largest producer of crude oil and the largest processor of oil products
in the Czech Republic. It operates oil refineries in Litvínov and Kralupy nad Vltavou. The processing capacity
The Oil Sector 69
of these refineries is 5.4 Mt/year and 3.3 Mt/year respectively. Unipetrol RPA, s.r.o. is part of the Unipetrol Group,
fully owned by the Polish PKN Orlen Group.
Unipetrol RPA, s.r.o. not only owns the two reprocessing refineries, which concentrate on the production of
oil products, it also focuses on the purchase of resources and sale of oil products.
Unipetrol RPA, s.r.o. is supplied with oil via the Druzhba and IKL pipelines (via the Nelahozeves central crude
oil tank). The refinery complex is also supplied with small volumes of oil extracted by Moravské naftové doly, a.s.
in the Czech Republic via the Druzhba Pipeline. The refinery in Litvínov processes the Russian oil mixture REB
(Russian Export Blend – medium sour oil imported from Russia via the Druzhba Pipeline in particular), while the refinery
in Kralupy processes sweet oil, low sulphur crude oil that is imported into the Czech Republic via the IKL
Pipeline (Ingolstadt - Kralupy - Litvínov) and domestic oil extracted by Moravské naftové doly a.s. (see Ministry of
Environment / Czech Geological Service - Geofond [ME / CGS-G], 2009, p. 180). Products resulting from the processing
of crude oil are then distributed to Czech or foreign markets via state-owned ČEPRO, a.s. (see below),
oil product pipelines, or overland transport. Refinery products of Unipetrol RPA, s.r.o. include aviation kerosene,
automotive petrol, sulphur, LPG, heating oil, diesel, propylene, asphalt, hydrogenated oil, and various intermediate
products for further processing in the Litvinov refinery.
Paramo, a.s., based in Pardubice, operates two plants, one in Pardubice and the other in Kolín. Paramo focuses
on refining crude oil into refinery and asphalt products and on the production of lubricating and processing oils,
including related and auxiliary products. The company also buys and processes hydrogenated oil from Unipetrol
RPA, s.r.o. The acquired intermediate products are used in the production of base and lubricating oils with very
low sulphur content (see Paramo, 2010, p. 10). The refinery products of Paramo are motor fuels, heating oil, asphalt
and other asphalt products, lubricating oils, and greases. The company operates a fuel refinery in Pardubice that
is engaged in the processing of Russian crude oil primarily for fuel, lubricating oil, and asphalt. It also operates
an oil refinery that produces lubricating oil in Kolín (see ME / CGS-G, 2009, p. 180). In May 2012, company management
in Pardubice stopped the processing of oil meant for fuel production and turned to the production of
asphalt, oils, and lubricants. The main trading partner in refinery products in the period in question was the sister
company Unipetrol RPA, s.r.o., to which supplies of primary petrol and vacuum distillates went (see Paramo,
2010, p 11). Despite the uncertainties that the company was facing (such as a temporary suspension of activity in
2011/2012) due to declining demand for the products in company´s portfolio, Paramo, a.s. was able to stabilize its
financial situation and is currently generating a profit (see Paramo, 2019).
4.2.4 Distributors
The products are distributed after processing. Petroleum products serve as material for other technologies in
the petrochemicals, agrochemicals, and plastics industries or are picked up directly from the refineries’ shipping
terminals by end customers and distributors. This is particularly true for sulphur, LPG, bitumen, fuel oil, and
jet fuel, as well as for normal fuel. ČEPRO, a.s. is the exclusive distributor through product pipelines in the Czech
Republic. The Ministry of Finance has been the sole shareholder in the company since 2006. It is engaged in
the transport, storage, and sale of oil products; provides transport, storage and other specialized services in this
area to external entities; protects the Administration of State Material Reserves (ASMR); and operates the EuroOil
petrol station network (see CEPRO, 2010, p. 4).
The oil products pipeline system connects the company’s storage depots and centres with refineries in
Litvínov, Kralupy nad Vltavou and Bratislava (owned by the Slovak company Slovnaft). The system allows direct
pumping and supply between its various depots. ČEPRO central dispatch monitors the operation of oil product
pipelines, monitors basic technical operational parameters (e.g. quantity of supply in the centres, pumping
modes) and data from security systems (see Zaplatílek, 2008). Due to the nature of the oil products produced in
Pardubice and Kolín (asphalt products, oils, etc.) there is no entry point into the system of oil product pipelines
in these refineries. The company is primarily engaged in the transportation of oil products according to the cus-
tomer’s needs (through the oil product pipelines, rail tankers, tank trucks, and trucks) and the wholesaling of fuel.
4.2.5 Traders in Oil Products
The final level consists of oil product traders. The most important in the Czech Republic are Unipetrol, a.s.,
BENZINA, s.r.o. (a subsidiary of Unipetrol, a.s.), MOL Česká republika, s.r.o., Shell Czech Republic, a.s., OMV Česká
republika, s.r.o., ČEPRO, a.s., Eni Oil Česká republika, s.r.o. RoBIN OIL, s.r.o., and LUKOIL Czech Republic, s.r.o.
The Oil Sector70
Unipetrol is a subsidiary of PKN Orlen (Polski Koncern Naftowy Orlen) and is an important player in the Czech
oil market. In addition to processing crude oil in the refineries of Unipetrol RPA –(100% ownership, RPA stands
for refineries, petro-chemistry and agro chemistry)2
and Paramo a.s. (100% ownership), the company is primarily
engaged in the sale of fuel through BENZINA s.r.o. (100% ownership).
BENZINA, s.r.o. has the largest number of petrol stations in the Czech Republic, with 405 stations as of 1st
June
2018. Aside from sales at its own petrol stations, it manages direct bulk deliveries of fuels to other business partners
and entities (see Benzina, s.r.o.).
MOL Česká republika is part of the MOL Group, in which the Hungarian government holds a 25% stake. The remaining
shares are held by investment companies or traded on the stock exchange. MOL operates 306 petrol
stations across the Czech Republic, making it the second largest player in the petrol retail market. MOL has enlarged
its market share largely by rebranding the petrol stations of its subsidiary, Slovnaft (Slovak refinery based
in Bratislava), and by acquiring stations from other brands such as Lukoil, Pap Oil, and the network of Agip petrol
stations that MOL Group purchased from its Italian partner (see Finance.cz, 2019).
EuroOil, the third largest brand in the fuel retail market is 100% owned by ČEPRO. It runs 200 petrol stations
in all (see ČEPRO, n.d.a). The main part of the company’s petrol station network consists of the former network of
Benzina s.p., created during privatization in the early 1990s when a portion of Benzina was merged with Unipetrol;
the rest was acquired in 2001 by ČEPRO (see Petrol media, 2017).
The sole shareholder in Shell Czech Republic is Royal Dutch Shell plc. Shell Czech Republic operates a network
of 175 service stations (as of 31st
December 2017) in the country. It also refuels aircraft at the Brno and
Ostrava airports, sells automotive and industrial oils and lubricants, asphalts, and chemical intermediate products
for further processing, and operates as a fuel wholesaler. This makes the company one of the highest valued in
the Czech market and in the industry as whole. It entered the Czech market in 1991 and took over the business of
DEA Mineraloel, Lukoil, and Total in the Czech Republic. (see Shell Czech Republic, a.s., 2018, p. 1–3)
OMV Česká republika is a 100% subsidiary of the Austrian group OMV A.G. Wien. It launched independent
activity in 1993 (after having been part of OMV ČSFR since 1990). The activities of OMV ČR, s.r.o. may be divided
into two main areas: construction and operation of OMV petrol stations and trade with consumers (including fuels,
fuel oils, lubricants, and other products) (see OMV, n.d.). OMV Česká republika currently operates 139 petrol
stations (see OMV, 2019, p. 4).
4.2.6 Use of Oil
Oil is processed in the Czech Republic primarily for use in the transport and industrial sectors. Total oil consumption
was 8.3 mtoe in 2016 and 9.67 mtoe in 2017. In 2017, 9.1 mtoe was available for final consumption, out of which
66.8% was consumed by the transport sector and 27.4% was consumed for non-energy purposes in which oil
was used as a raw material instead of as a fuel (mainly in the petrochemical industry). Energy generation (electricity
and heating) accounted for less than one percent of total oil consumption. In 2016, 5.3 Mt of crude oil and
4.7 Mt of oil products were imported into the Czech Republic. In the same year, the country exported 2.3 Mt of
oil products (see Ministerstvo průmyslu a obchodu, 2017, p. 1, 3).
Tab. 4.4: Oil Consumption in the Czech Republic by Sector
Total Consumption 404,966.0
International air transport 14,851.9
Transformation Purposes 359,319.3
Refineries and petrochemical industry 357,091.1
Electricity and heat generation 2,228.2
Energy Industry 10,121.4
Distribution Losses 0
Note: Data is in TJ.
Source: Ministerstvo průmyslu a obchodu, 2019, p. 21
2	 This subsidiary also acquires resources for the petrochemicals production of the Unipetrol group including foreign crude oil purchasing
for refinery products.
The Oil Sector 71
Tab. 4.5: Final consumption of oil products in the Czech Republic
Available for final consumption 381,330.2 (100%)
Final non-energy consumption 104,700.6 (27.4%)
Final consumption 277,721.6 (72.8%)
Industry 5,365.2 (1.4%)
Transport 254,792.7 (66.8%)
Other Sectors 17,563.7 (4.6%)
Note: Data is in TJ. Statistical differences -1,092.1
Source: Ministerstvo průmyslu a obchodu, 2019, p. 21; Percentage conversion by J. Červinková
Fuels for transport sold or distributed through the network of public and private petrol stations in the Czech
Republic take a big share of the country’s total oil and petroleum products consumption. The remainder of the oil
in the Czech Republic is used in the petrochemicals industry to produce pharmaceutical products, detergents,
dyes, explosives, fragrances, coatings, sealants, adhesives, rubbers, fertilizers, etc.
4.3	 The Regulatory Framework of the Oil Industry
In terms of extraction, the exploitation of oil is guided by Act No. 89/2016 Coll. which amended Act No. 44/1988 On
the Protection and Utilization of Mineral Resources (The Mining Act) (see Zákon č. 89/2016 Sb., 2017) and by the Czech
Mining Authority, as in the case of coal. Trade in oil and oil products is treated in Act No. 458/2000 Coll., on Business
Conditions and Public Administration in the Energy Sectors and on the Amendment of Other Laws (The Energy Act).
The Czech Republic fulfils its EU and IEA3
membership obligations through the Administration of State Material
Reserves (ASMR). The obligation to the IEA among includes maintaining the reserve levels as of 31 December
2005, and maintaining a reserve equal at a minimum to 90-days’ average daily net oil product imports over the last
year. The obligation to the EU involves securing oil reserves of 90 days average of daily crude oil imports or 61 days
average of daily domestic consumption of oil (it depends which figure is greater, calculated in the preceding year)
as of 31 December 2012, based on EU directive 2009/119/EC4
. The implementing legislation in the Czech Republic
is Act No. 189/1999 Coll. as amended by later regulations5
.
The storage and protection of oil, oil products and intermediate products is realized by state-owned business
entities in the Czech Republic. MERO CR is responsible for crude oil storage, while CEPRO a.s. stores oil products.
Petrol, diesel, aviation kerosene, lubricating oils and heating oil are protected products (see ČEPRO, n.d.b.).
CEPRO has 16 centres and stores which are connected by oil products pipelines. The construction of pipelines
and warehouses began during World War II (ČEPRO, n.d.a).
MERO ČR, a.s. operates the Nelahozeves Central Crude Oil Tank (CCOT), which is part of the IKL pipeline.
It is used to receive oil from the Druzhba pipeline to and from the IKL pipeline; for storage and mixing of different
types of oil according to customer needs and capacities; and for oil distribution to the customer. Most of
the CCOT’s capacity is used by the State Material Reserves Administration to store strategic reserves of crude
oil. The total storage capacity is currently 1.55 million cubic metres and consists of four tanks with a single volume
of 50,000 cubic metres, six tanks with a capacity of 100,000 cubic metres, and six tanks with a capacity of
125,000 cubic metres, for a total of 16 tanks. These steel tanks are above-ground, with a steel protection pool and
floating roof (see Zaplatílek, 2007, p. 70; Cieslar, 2008a).
3	 The Czech Republic joined the International Energy Agency on 5 February 2001.
4	 The directive also modifies the rules of operation for storage organization. The central administrators of reserves are chosen exclusively
by the state, and the European Commission is in charge of controlling these reserves under the directive (see Nowak & Hnilica, 2010, p. 7).
5	 In July 2012, the Government passed a bill introducing the changes to Act No. 189/1999 Coll., as amended. The Act no longer operates
with the term strategic reserve, but it adds to the emergency reserves at the level of a minimum 90 days of net imports specific reserves
that may include emergency reserves. The Czech Administration of State Material Reserves (SSHR) can form specific reserves from
seventeen products in an amount corresponding to at least 30 days of average daily domestic consumption in the reference year for at
least a one-year period. Specific reserves accordingly expand emergency reserves, but also cover the potential needs of the business
sector in the form of an SSHR loan without endangering the quota of obligatory reserves and the requirement to give the EU notice of
their reduction. Specific reserves also enable the disposal of ad hoc reserves relative to market development without necessarily increasing
all products’ blanket reserves as indicated by the EU and IEA legal acts.
The Oil Sector72
The strategic petroleum and petroleum products reserves were stored in quantities which would last 91 days,
meeting the EU requirements, as of 31 December 2016 (see MPO, 2016, p. 7). Since that time, however, the oil
stocking obligations of the IEA and the EU have not been met by the Czech Republic. As of January 2019, the reserves
were down to almost 86-days average of daily net imports (see IEA, 2019).
4.4	 Demand Forecast
Oil consumption in the Czech Republic oscillated around 8.8 millions of tons a year until 2017, when it rose significantly
(see Table 4.6). Generally, it is expected that the share of oil in the TPES of the Czech Republic will decrease
(see Table 4.7).
Tab. 4.6: Gross oil consumption in the Czech Republic in 2010–2017
Year 2010 2011 2012 2013 2014 2015 2016 2017
Gross oil consumption [millions of tons] 9.0 8.9 8.7 8.4 8.9 8.7 8.1 9.5
Source: Ministerstvo průmyslu a obchodu, 2019, p. 21; Unit conversions by J. Červinková.
For preparing the forecast of oil demand and to forecast energy demand in the Czech Republic, it is necessary
to consult the sources which affect demand most directly. In the Czech Republic, these include 2004 State
Energy Concept and its revision of December 2014. The State Energy Concept works with a forecast of 2030
conditions. The 2014 Revision of the State Energy Concept provides data to 2040.
Tab. 4.7: The Shares of Fuels in Energy Resource Consumption in 2000 and 2017 and the Shares According to the State Energy
Policy of the Czech Republic from 2004 and Its Update from 2014 (in %)
Type of Fuel Level in 2000 Level in 2017 Long-Term Goal
(SEP 2004) by 2030
Long-Term Goal
(USEP 2014) by 2040
Solid 52.4 36.7 30–32 11–17
Gas 18.9 16.7 20–22 18–25
Liquid 18.6 21.7 11–12 14–17
Nuclear 8.9 16.3 20–22 25–33
Renewables 2.6 10.5 15–16 17–22
Source: Státní energetická koncepce, 2004, p. 11–12, 40–49; Aktualizovaná státní energetická koncepce, 2014, p. 44; Ministerstvo
průmyslu a obchodu, 2019, p. 14
The 2004 State Energy Concept predicted almost 50% less consumption, while its 2014 revision has a notably
different outlook, estimating a decline of several percent in consumption versus 2017. Even with demand declining
by several percent, we should take into consideration the predicted long-term trend of increasing energy
consumption in the Czech Republic. Nominally, we may therefore count on a steady increase in oil consumption
(see the forecasts in table 4.8).
Even if oil consumption were to reach the level of 14–17%, there would be a need to partially substitute this
sort of fuel. Given the purposes of oil use (almost 67% for transportation services), it is assumed that the replacement
of oil will take place precisely in the transportation sector. According to the State Energy Concept,
natural gas is to become an increasingly important element in the energy fuel mix of the Czech Republic. Aside
from its use in the generation of heat and electricity, it will be exploited primarily for transportation purposes.
In 2018, there were 22,600 CNG vehicles in the Czech Republic6
with consumption of 75 mcm/y (see CNG4you,
2019). The National Action Plan for Clean Mobility of 2015 predicts there will be 200 – 300 thousand CNG vehicles
by 2030 in two of the highest consumption scenarios presented7
. The number of CNG vehicles would then
6	 There are basically no LNG-fueled vehicles in the Czech Republic. In 2018 it was, according to CNG4you, only 2 vehicles (see
CNG4you, 2019).
7		 In the National Action Plan for Clean Mobility there are 4 scenarios presented altogether. The data used are results of scenarios 1
a 1A which are called optimistic and moderately optimistic. The data from other two scenarios are not used as they assume an imposition
of 50 % and 100 % tax as conventional fuels which is unlikely considering the set goals and ambitions of state in a transport sector.
The Oil Sector 73
correspond to approximately 450 – 680 mcm/y of gas consumption in 2030. The scenarios are based on the development
of several factors including state support, taxation, infrastructure development etc. The same document
expects there will be 1,361 LNG vehicles with consumption of approximately 89.4 mcm/y in 2030. (see
Ministerstvo průmyslu a obchodu, 2015a, p.49–51; 54). Nevertheless, in 2018 approximately 6.6 million passenger
cars, vans and buses were registered in the Czech Republic (see SDA, 2019). This means CNG vehicles currently
represent 0.34% of the car fleet in the country. Thus, even though the number of gas-fuelled vehicles is predicted
to substantially increase compared to current levels, CNG and LNG vehicles will probably account for no
more than 5% of the car fleet by 2030.
Another fuel which is predicted to partially substitute oil in the transport sector is electricity. In 2017 there
were 1,525 registered electric passenger cars in the Czech Republic (see Ministerstvo dopravy, 2017, p. 52). Even
though this number is increasing rapidly, and the fleet of electric vehicles is growing by many percentage points
every year, the share of electric passenger vehicles in the Czech Republic is still very low at less than one per
cent of the car fleet. In agreement with this, the National Action Plan for Clean Mobility of 2015 predicts moderate
growth (see Ministerstvo průmyslu a obchodu, 2015a, p. 27). NAP for Clean Mobility expects plug-in hybrid
electric vehicles to represent a greater share of the car fleet than electric vehicles in the few years of development
of electric mobility. By 2030, NAP for Clean Mobility predicts there will be 255 thousand electric and plug‑in
hybrid vehicles in the Czech Republic (see Ministerstvo průmyslu a obchodu, 2015a, p. 33). Similar to gas‑fuelled
vehicles, this would represent only a few percent of the Czech car fleet. In conclusion, the substitution of oil
in the transport sector will be a long term process, and it is most probable that oil will remain the chief fuel in
the Czech transport sector even beyond 2030.
Consequently, even though the share of oil in the TPES is expected to decrease, it is predicted that overall
consumption of oil refined fuels will grow moderately (see Table 4.7). The growth is attributed to a growing vehicle
fleet and strong activity in the industrial sector.
Tab. 4.8: Oil Consumption Prediction
Year 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Consump. 1 199 203 207 211.2 215.4 219.7 224.1 228.6 233.2 237.8 242.6 247.4
Consump. 2 27.15 27.69 28.24 28.81 29.39 2997 30.57 31.19 31.18 32.44 33.09 33.75
Year on year % change – 2 2 2 2 2 2 2 2 2 2 2
Note: Consumption 1 signifies thousands of barrels of oil per day; Consumption 2 signifies thousands of metric tonnes.
Source: Fitch Solutions, 2019, p. 13. The calculation to metric tonnes by the author.
4.5	 Current Issues and Proposed Projects in the Czech Oil Sector
4.5.1 Infrastructure Projects
With respect to the developing perception of Czech energy security, the construction of a third pipeline which
would enhance its diversification of oil sources has been considered, with two potential options in play.
The first option is to interconnect the refinery in Litvinov with Spergau, Germany in the vicinity of Leipzig. TOTAL
Raffinerie Mitteldeutschland GmbH Spergau (in the literature also called Leuna8
) is connected to the Druzhba
Pipeline. This project is being pursued by MERO ČR, which also initiated it and which would provide the necessary
funding. The pipeline is planned to be about 160 km long with a diameter of 700 mm and the capacity of 5–6 MTA
(though industry experts speak of capacity needs of at least 10 MTA). In 2013, the Litvínov-Spergau Pipeline was
first awarded Project of Common Interest (PCI) status by the EU and has received this status twice again since
(2015, 2017). Having PCI status means the pipeline is considered a key cross-border infrastructural project9
(see
European Commission, n.d.). The final investment decision is expected in 2021, with commissioning of the project
8	 Both Spergau and Leuna are small neighbouring towns west of Leipzig.
9	 The PCI (Projects of Common Interest) status automatically means shorter and streamlined permit and granting procedures. It also
allows the promoter to apply for specific EU grants supporting energy network development and integration. Apart from the financial
support, these granting schemes provide the related projects with a de facto formal EU backing, which may consequently make them
more reliable for potential investors.
The Oil Sector74
in March 2025. The feasibility study has been in progress since January 2019, however, according to the MERO
ČR’s official website “realization of the project has not yet been decided on” (see MERO, n.d.). Similarly, no information
is available about the planning process and also the front-end engineering design study is yet to be commenced
with no concrete end-date available.
The aim of the Litvínov-Spergau pipeline is to increase the oil security of the Czech Republic in terms of supply
routes, not only by closing the gap between the two branches of the Druzhba Pipeline but also by providing
Czech refineries with access to oil terminals on the Baltic coast: Rostock (Germany) and Gdansk (Poland). In connection
with the Litvinov-Spergau pipeline, the Czech Republic could become a transit country for oil. Moreover,
the extent to which Czech oil security would improve is also questionable, as Russia’s Lukoil and OAO Gazprom
Neft have (among others) shown interest in the past in the German refinery at Spergau. These companies want
the products produced there to be sold on the Polish market (see Sušanka, 2010; Žižka, 2010; “Czech Republic:
Oil pipeline”, 2010; Čarek, 2009).
The second option is a pipeline connection from Klobouky u Brna to the Austrian OMV refinery Raffinerie
Schwechat near Vienna. Historically, this project was also designed by MERO ČR, but there is no current information
on its development. This proposal is linked to development of the planned Bratislava-Schwechat Pipeline
(BSP). The BSP pipeline has been discussed since 2003 as part of diversification in Slovakia. This project was
proposed by the Slovak state-owned company Transpetrol and could potentially affect the Czech Republic as
well. It could diversify the oil sector in terms of pipeline routes (through Schwechat, Austria via the Druzhba or
TAL Pipeline), but not in terms of resources. However, the project also meets the limited capacity of the TAL
pipeline. The BSP pipeline is planned as a link between the Slovnaft refinery in Bratislava and the Austrian OMV
Raffinerie Schwechat near Vienna. The purpose of this project is to expand the existing Russian pipeline network
to Austria, which would allow delivery for the first time of cheap Russian oil directly to Austria. For Austria, it is
an important diversification project, since the country is currently supplied only by TAL (Transalpine Pipeline)
and AWP (Adria-Wien Pipeline).
The Slovaks perceive this pipeline as an essential project that aims to enhance the country’s energy security.
The new connection is foremost intended to motivate Russian companies to send more oil via the southern
branch of Druzhba (because there would be also other countries at its end in addition to the Czech and Slovak
Republics). Secondly, the planned capacity of the pipeline route would be able to cover a potential total loss of
oil supplies via the Druzhba Pipeline in the event of loss of supplies from the East, but only if there were spare
capacity in the TAL-AWP section. Also, consumption at the Schwechat refinery would have to decrease to compensate
for oil intended for Slovakia in this case. The BSP oil pipeline received Projects of Common Interest status
in 2013, 2015 and 2017. The final investment decision is to be made in July 2019, and the project will be commissioned
in November 2022 (see European Commission, 2018). There are no obstacles on the Austrian side of
the project. On the Slovak side, however, the routing of the pipeline is a serious issue. There were several proposed
routes which were very problematic in terms of environmental risk (the contamination of an aquifer) and/
or social impact (as the project will go through the city of Bratislava) (see Správy Pravda, 2018). In 2015, the municipal
authority of Bratislava rejected the proposed routing of the BSP pipeline through the city (see “Informacia
o projekte”, 2017) and the Slovak government gave the project’s operator Bratislava-Schwechat Pipeline GmbH
a deadline by which to submit new detailed documentation, including new alternative routes, by June 2019 (see
Správy Pravda, 2018). A breakthrough in the project is not expected, shelving is more likely.
The Oil Sector 75
Tab. 4.9: Central European Oil Infrastructure
Note: red numbers stand for pipeline capacities in million tonnes annually
Source: T. Vlček based on map from Doprava a skladování ropy, n.d.
In addition to the above-mentioned projects, Czech entities are involved in other existing pipelines.
A proposed by MERO CR calls for the reverse operation of the IKL Pipeline, with the aim of delivering Russian
oil through the Druzhba and IKL pipelines to German refineries, and in so doing to increase interest by the Russian
Federation in exports via the southern branch of the Druzhba and increase its own profits from the transport of oil.
However, the project faces difficulties and is not feasible (see Vlček, 2015, p. 88).The Czech government is trying
to secure a secondary oil supply in the event of disruption of the Druzhba Pipeline. The IKL Pipeline is a rational
choice; it follows the Italian-Austrian-German TAL pipeline (Transalpine Ölleitung). Utilization of the IKL pipeline
hovers between 20–40%, so it would seem there is enough space to increase supply. However, the pipeline is
linked to the TAL pipeline, which is used to almost 100% capacity, and the possibility of increasing the supply to
the Czech Republic is thus minimal. This issue was resolved in September 2012, when MERO ČR acquired a 5 %
share in a joint-venture involving the TAL Pipeline. The TAL oil pipeline is currently owned by ten companies10
(see Vlček, 2015, p. 85). Each owner has preferential rights to access TAL’s spare capacity in case of a crisis. (see
MERO, 2014)
The Druzhba Pipeline may only be utilized at up to 12-months nomination of capacity in advance with a flexibility
of +/- 10%. The IKL Pipeline may only be utilized with 18-months nomination of capacity in advance. In addition,
shareholders in the pipeline are served first. Delivery takes 6 to 8 weeks from loading an oil tanker in
the Persian Gulf through unloading in Trieste for delivery to Kralupy nad Vltavou. Pipeline capacity is 42 Mt per
year, but there is the potential to increase this to more than 50 by restarting operation of the pumping stations
on route that have been taken out of service. Two out of the six stations are currently operating, and the cost of
10	 OMV AG (25 %), Royal Dutch Shell plc (19 %), Ruhr Oel GmbH (11 %), C-Blue Limited (Gunvor Group Ltd.; 10 %), Eni S.p.A. (10 %), BP p.l.c.
(9 %), Exxon Mobil Corporation (6 %), MERO ČR, a.s. (5 %), JET Tankstellen Deutschland GmbH (subsidiary of Phillips 66; 3 %) and Total
S.A. (2 %).
The Oil Sector76
restarting each of the four remaining stations would be on the order of hundreds of thousands of euros. The increase
of capacity of the TAL Pipeline has Project of Common Interest status (see European Commission, n.d.)
and the planned commissioning date is March 2023.
Tab. 4.10: TAL Pipeline
Source: The Transalpine Pipeline
4.5.2 The Druzhba Pipeline
In June 2007, the Polish newspaper Dziennik broke a story with information that has been frequently repeated
since indicating that Russia was considering shutting down the Druzhba Pipeline (see Roškanin, 2007, p. 8). It is
very likely that Russia will gradually start favoring exports of processed and, to the extent possible, finished materials
at the expense of unprocessed materials (see Kavina, 2009, p. 322).
The Czech Republic has experienced several oil supply disruptions involving the Druzhba Pipeline. These have
been attributable to disputes between Russia and Ukraine on the transportation fee for oil in 1990, 1991, 1994,
1995, and 1996 and because of difficulties in license issuance and internal problems in the Soviet Union (in 1990),
as well as to technical issues. Oil supply through Belarus was cut off in 2007 because of disputes over the rate of
duty between Russia and Belarus. Oil supplies via the Druzhba Pipeline were curtailed on Czech territory by 50%
in the summer of 2008. The Russians explained the situation as an issue in a complex chain of interconnected
suppliers. However, the curtailment came just one day after (9th
July 2008) the Czech Republic signed an agreement
to establish a missile defence radar base in Brdy with the U.S. The situation was easily resolved by increasing
deliveries through the TAL/IKL pipeline system (in addition to the use of state petroleum reserves, additional
supplies were secured from Iran, Norway, and Saudi Arabia, all in one day). The July curtailment had much more
unpleasant consequences for Russia than for the Czech Republic, since Germany and Great Britain questioned
Moscow about the curtailment, and Russia’s reputation as a reliable supplier was damaged. The risk of oil supply
disruption reappeared when Russia got into a dispute with Ukraine on transit fees once again in December
2009, but the situation was resolved by agreement between Moscow and Kiev under a new contract and no disruption
occurred (see Nowak & Hnilica, 2010; “Rusko hrozí Evropě”, 2009; Roškanin, 2008a, p. 9).
The Oil Sector 77
Another problem in the oil supply via Druzhba took place in April 2012. During the first ten days of the month,
oil supplies from the East to the Czech Republic fell by 31% versus the amount logged by Russia. Transneft, which
coordinates exports of Russian oil, announced on 9 April that Russian companies did not deliver any orders for
the transfer of oil to the Czech Republic. However, the following day, Transneft added that in the second quarter,
supplies would be delivered according to the contract. The most likely reason for this decrease in oil supplies
was the reorientation of Rosneft and Lukoil towards transporting oil through the BTS-2 pipeline system. This system
was opened at the end of March 2012 and exported Russian oil while bypassing transit countries. It is also
likely, though, that Russian companies used this opportunity to test how owners of Czech refineries would react
to decreased oil supplies in the context of the newly-opened BTS-2 and how flexible they might be in accepting
a hike in the oil price. The oil curtailments lasted for several months, during which most oil to the Czech Republic
was imported through the IKL Pipeline. Price negotiations between Czech refinery owners and the Russian oil
companies were ongoing until autumn 2012 (see “Ropa z Ruska neteče”, 2012; “The future of Russian oil”, 2012).
The most recent problem occurred in April and May 2019 when the supply through the Druzhba was halted
due to polluted crude oil inside the pipeline. The contamination was caused, according to Russian representatives,
by technical problems. This presented a problem mainly for the refinery in Litvínov, which is configured for
Russian oil. (see “Do Česka nyní ropovodem”, 2019)
Tab. 4.11: Oil Curtailment to the Czech Republic
Year Reason for Curtailment
1990 Domestic problems in the Soviet Union.
1991 Curtailment solved by additional supplies via IKL Pipeline.
1994 Curtailment of oil supply due to a stop in license issuance.
1995 Dispute between Russia and Ukraine over the rate of oil transit fee.
1996 Dispute between Russia and Ukraine over the rate of oil transit fee.
2007 Dispute between Belarus and Russia over the rate of oil transit fee. Russia imposed export duty on oil exports to Belarus,
which imposed countermeasures resulting in another curtailment of supply.
2008 Russia decreased oil supply to the Czech Republic to approximately 50% of volume. The reason for this might have been
the signing of an agreement between the Czech Republic and the U.S. on establishing a missile defence radar base in
Brdy. Curtailment solved by additional supplies via IKL Pipeline.
2009 A blackout in western Ukraine caused the curtailment of Russian oil to Europe. The risk of curtailment was due to
a dispute between Russia and Ukraine over the rate of oil transit fee.
2012 Curtailment of oil supply through Druzhba due to lengthy price renegotations
2019 The supply through the Druzhba was halted due to polluted crude oil inside the pipeline. The contamination was caused,
according to Russian representatives, by technical problems.
Source: “Rusko hrozí Evropě”; Nowak & Hnilica, 2010; “Ropa z Ruska neteče”, 2012; “Do Česka nyní ropovodem”, 2019; edited by T. Vlček.
The state does not have oil supply contracts for the Czech Republic under control and has almost no way to
regulate supply. Oil contracts are fully under the control of private enterprises in the Czech Republic. “Oil is not
contractually guaranteed over the long term. In this context, we are more dependent on the global oil situation,
to which we must respond by monitoring the overall situation, good diplomatic relations with several producers,
the extension of strategic reserves, and by a savings programme and the next generations of Biofuels” (see
UVCR & NEK, 2008, p. 65). Due to its high utilization, not even the IKL Pipeline is a completely reliable insurance
policy (see above).
The Czech Republic negotiated two important agreements with regard to oil supply curtailments in the summer
of 2008. The first is a memorandum between the carriers MERO CR and OAO AK Transneft (ОАО АК Транснефть)
intended to secure a steady supply of resources to the Czech Republic. The Russians are to inform the Czech
side of their future intentions with the Druzhba Pipeline and provide early warning of any disruption on the basis
of this memorandum. Similar contracts are already held with the other operators of the Druzhba including
the Ukrainian firm ВАТ UkrTransNafta (ВАТ УкрТрансНафта), Belarusia’s RUP Gomeltransneft Druzhba (РУП
Гомельтранснефть Дружба), and Slovakia’s Transpetrol, a.s. (see Roškanin, 2009, p. 6; MERO, 2010). The second
contract, signed on 23rd
November 2010, was between MERO Germany AG, a subsidiary of MERO CR, and
The Oil Sector78
the German Deutsche Transalpine Oelleitung GmbH11
, one of the three companies that operates the TAL pipeline.
This contract extended the existing contract allowing the transport of more oil via the Western European
TAL Pipeline for Czech refineries at a time when there were problems with the Druzhba. MERO CR could use
the free shipping capacity of the TAL pipeline system beyond the usual long-term liabilities in this case, without
no exorbitant extra costs. The new amendment to the contract was valid until 2015 (see “Výpadky ropovodu
Družba,” 2010; Jones, 2010).
Switching the direction of oil flow in both pipelines has been discussed in the oil sector in the past. The Czech
government stopped work on the transit of oil via the Druzhba Pipeline over Czech territory to Germany via the IKL
Pipeline in 2006, since this would undermine the route diversification that had been achieved during the 1990s
(see Roškanin, 2006, p. 6). Slovakia negotiated with the Czech Republic for the possibility of switching the oil flow
of the Druzhba pipeline. Switching the direction of pipeline oil flow is technically possible at a fairly limited cost–
on the order of several million euros, which would have to be provided by the Slovak side (see Roškanin, 2008b,
p. 7). The project nevertheless made no further progress.
There are several possible solutions, which Tomáš Hüner of the Ministry of Trade and Industry briefly summarized:
“There are a number of solutions, from a technology change solution in the Litvínov and Pardubice refineries
that would allow them to process light oil, through the transport of Russian or similar crude oil via the IKL
Pipeline, to the transport of Russian oil via another pipeline in Ukraine up to the section of the Druzhba pipeline
that passes through Slovakia to the Czech Republic” (see Roškanin, 2008b, p. 9). Czech refineries are now specialized.
The oil refinery in Litvínov processes the Russian REB oil blend imported via the Druzhba Pipeline, while
the refinery in Kralupy nad Vltavou focuses on processing sweet domestic and imported crude oil supplied via
the IKL; finally, the refinery in Kolín uses resources from the Litvínov refinery.
Overall technological change is of course possible, but expensive and time consuming. The transfer of Druzhba
oil pipeline capacity to the IKL pipeline is problematic due to its full capacity utilization (see above). The option of
transporting oil via the Druzhba junction in Ukraine, i.e. via the Odessa-Brody pipeline (also-called the Sarmatia
pipeline) has been discussed but not acted on for the past ten years. The pipeline was originally supposed to be
extended to the Polish city of Plock, but only that section that runs from the city of Odessa to Brody has actually
been constructed. The pipeline has also been used for completely different purposes than it was built for. Until
2010, it was used fto transport Russian oil from the Druzhba via Brody and the Sarmatic to Odessa, where it was
then shipped via tankers at the oil terminal in Odessa (Одеса) and Pivdennyi (Південний). According to an agreement
signed in the beginning of 2011, the Odessa-Brody pipeline was also used to transport Azeri crude oil (Azeri
Light) to the Belarusian refinery in Mozyr. However, since the beginning of 2012, the deal has been suspended.
The infrastructure projects described above are also in response to reports about the possibility of curtailing or
cutting off the Druzhba Pipeline.
Efforts to transfer the export of oil to oil tankers and the transition from the export of crude oil to the export
of oil products are real aspects of Russia’s energy strategy. A different issue is whether and to what extent this
declared strategy can pressure importers so that they themselves use their resources more intensively to put
political pressure on transit countries.
4.6	 Summary
There is strong know-how and experience present in the Czech oil sector, based on an oil industry which has
more than a hundred years’ history in the country. The Czech oil market is dynamic. Among other things it records
constant growth in petrol stations. On the one hand, this is an indicator of the market’s vitality and raises
refining and distribution demand; but in the final result, the volume of imports from abroad is boosted as well,
11	 In addition to Deutsche Transalpine Oelleitung GmbH, the pipeline is operated by Austria‘s Transalpine Ölleitung in Österreich Ges.mbH
and Italy‘s Societá Italiana per l'Oleodotto Transalpine SpA (see The Transalpine Pipeline, available on http://www.tal-oil.com/).
The Oil Sector 79
especially from Russia,12
and the country’s dependence is mounting. In the supply crisis of 2008, it became evident
that the Czech Republic was far from dependant on the Druzhba Pipeline, as usually thought, and that it
was able to resolve the situation completely without affecting the trade sector. Domestic sources are, however,
insignificant and import dependency for the major volume of oil, along with all the issues that entails (for example,
transit fees13
, curtailment of supply, etc.), will remain a long-term feature of the Czech oil sector. According
to estimates, the Czech Republic expects slightly increasing oil consumption.
Russia’s future plans call for the transport of oil materials that have been processed and finalized to the maximum
extent, but the reality in the Russian refinery sector shows these plans to be little more than empty proclamations.
Instead of the restriction of supplies as the result of a deliberate decision by the Russians, it would
seem a greater threat lies in the failure of trade negotiations either between oil owning and transit countries, or
between the owner of Czech refinery capacity and the oil supplier. PKN Orlen SA negotiates with the Russian
Federation for regular oil supplies based on a joint contract that covers all of its refinery facilities (i.e. in addition
to the Czech facilities, PKN Orlen SA in Płock, Trzebinia, and Jedlicze (all in Poland), and Możejki (Lithuania).
Should PKN Orlen SA not reach an agreement with the Russian Federation, this could easily cause trouble with
oil supplies to the Czech Republic.14
As previously indicated, the Czech refinery companies are configured for a particular sort of oil. This does
not mean that, for example, the Russian type of oil could not be imported from somewhere in the West, as well.
Generally, refinery companies manage to process any kind of oil. But the more it differs from the character of oil
these refineries were originally configured for, the lesser its utilization, while unit costs rise in tandem. From the re-
finery’s viewpoint, processing significantly different oil is economically pointless. Czech refineries are, moreover,
not dependent on Russian oil but on medium heavy oil, whose producer, among others, is in fact Russia. While
substituting for potential supply restrictions through the Druzhba Pipeline, refineries would look not for Russian
oil in western pipelines, but rather for oil most like it: a heavy, sulphurous grade. Oil from Iran, for example, would
be adequate. In this regard, it must be emphasized that the oil diversification of a country is sufficient unless
the capacity of the TAL Pipeline becomes restricted. For this reason, we should laud the successful purchase of
an ownership share in the TAL and potentially support further diversification projects that diversify only oil supply
routes and not the regions rich in oil.
Due to its geographical context, the Czech Republic is isolated from other markets. The mountain massifs at
the borders and the lack of a pipeline connection (except to Slovakia) limit the import of products from abroad and
raise the price. Consequently, the Czech Republic has slightly higher prices on the domestic trade market due to
limited import alternatives and must utilize cargo or train routes that make imports more expensive. According
to unofficial information, the prices of products are higher by 10 USD per barrel than when obtaining them beyond
the borders without counting in transport price, which has a positive impact on Czech refineries’ competitiveness.
Connection to pipelines from abroad (Germany, for example) would considerably simplify the entry of
foreign products to the Czech market, which would lead to a general reduction of fuel and other product prices
by, as noted above, 10 USD. On the other hand, this development could lead to the refineries’ collapse and the decay
of the Czech refinery sector.
The Czech refineries leverage this situation and try to limit activity that would lead to the simplified cross-border
transport of products. The only real competitor to the Czech refineries is the Slovak company Slovnaft, a.s.,
12	 The Czech Republic has a unique relationship with the Russian Federation stemming from 40 years of Soviet domination as well as
the development of politics following 1989. Maximum effort was invested in breaking away from and dissociating from Russia and
connecting with the West as quickly and as profoundly as possible. On the right of the political spectrum, similar affiliations are still
maintained. At the international level, the typical Czech approach to Russia has been and still is represented primarily by the figure
of Alexandr Vondra (former Foreign Minister of the Czech Republic, former Deputy Prime Minister for European Affairs) and Václav
Bartuška (the Czech Republic’s Special Envoy for Energy Security, appointed in 2006 by Alexandr Vondra). Such Czech political thinking
to a great extent limits even “casual” trade relations of both countries.
13	 In the case of the Druzhba Pipeline, the supplier pays the transit fees already at the transfer point Budkovce at the Slovak-Ukrainian border.
From there, first the consumers of the Slovak transit company Transpetrol and then of the Czech MERO CR pay the transit. In the case
of the IKL Pipeline, the supplier pays the transit fees for reaching Augusta Port in Sicily (the orientation point for the Mediterranean
Sea). The consumer then pays for the transit from Augusta to Trieste for transportation through the TAL and IKL pipelines.
14	 Here we should add that the Czech market approximately presents a mere 1.5% percent of Russia’s oil export volume. Motivation for
maintaining these exports can be of two kinds: political, related to the EU and the market, since the Czech Republic pays the market
price of oil and its payments are punctual - in other words it represents certain income.
The Oil Sector80
as it is connected to the ČEPRO product pipeline network via the pipeline from Bratislava. Of total PHM imports
to the Czech Republic, approximately two-thirds are imported via the Slovak pipeline network, which is owned
by Slovnaft.
4.7	 Sources
Aktualizovaná státní energetická koncepce. (2014, December). Retrieved from https://​www​.mpo​.cz​/assets​
/dokumenty​/52826​/60155​/632395​/priloha004​.pdf
Benzina, s.r.o. (n.d.). Retrived from: http://​www​.benzina​.cz​/en​/aboutus​/Pages​/main​.aspx
Cieslar, S. (2008a, June 4). Centrální tankoviště ropy v Nelahozevsi rozšířily dva obří zásobníky ropy.
Konstrukce – Odborný časopis pro stavebnictví a strojírenství. Retrieved from http://​www​.konstrukce​.cz/
CNG4you. (2019). CNG info: Statistiky. Retrieved from http://​www​.cng4you​.cz​/cng​-info​/statistiky​.html
Czech Republic: Oil pipeline to Vienna-Schwechat? (2010, August 19). wieninternational.at. Retrieved from
http://​www​.wieninternational​.at/en
Čarek, M. (2009, October 26). Lukoil chce koupit rafinerie v Německu a produkty prodávat do Polska. Mediafax.
cz. Retrieved from http://​www​.mediafax​.cz​/ekonomika​/2947685​-Lukoil​-chce​-koupit​-rafinerie​-v-Nemecku​
-a-produkty​-prodavat​-do​-Polska
ČEPRO, a. s. (2010). Výroční zpráva 2009. Retrieved from http://​www​.ceproas​.cz/
ČEPRO. (n.d.a). O nás. Retrieved from https://​www​.ceproas​.cz​/o-nas
ČEPRO. (n.d.b). Ochraňování zásob SSHR. Retrieved from https://​www​.ceproas​.cz​/produkty​-a-sluzby​
/ochranovani​-zasob​-sshr
Černoch, F. & Dančák, B. & Koďousková, H. & Leshchenko, A. & Ocelík, P. & Osička, J. & Šebek, V. & Vlček,
T. & Zapletalová, V. (2012). The Future of the Druzhba Pipeline as a Strategic Challenge for the Czech
Republic and Poland. Brno: Mezinárodní politologický ústav.
Do Česka nyní ropovodem Družba neteče žádná ropa. Náprava může nastat počátkem května. (2019, April 26).
Retrieved from https://​ct24​.ceskatelevize​.cz​/ekonomika​/2797931​-cesko​-zastavilo​-odber​-z-ropovodu​-druzba​
-ropa​-v-nem​-je​-znecistena
Doprava a skladování ropy. (n.d.). Petroleum.cz. Retrieved from http://​www​.petroleum​.cz​/index​.aspx
European Commission. (2018, December). Bratislava-Schwechat Pipeline. Retrieved from http://​ec​.europa​.eu​
/energy​/maps​/pci​_fiches​/pci​_annex2​_9_2​_en​_2017​.pdf
European Commission. (n.d.). Energy: Topics: Projects of Common Interest. Retrieved from
https://​ec​.europa​.eu​/energy​/en​/topics​/infrastructure​/projects​-common​-interest
Finance.cz. (2019, March). Kdo vlastní naše čerpací stanice? Retrieved from:
https://​www​.finance​.cz​/521151​-cerpaci​-stanice​-vlastnici/
Fitch Solutions. (2019). Czech Republic Oil & Gas Report Q2 2019.
IEA. (2019, April 11). Statistics Resources: Closing Oil Stock Levels in Days of Net Imports. Retrieved from
https://​www​.iea​.org​/netimports/?y=​2019​&​m=01
Informacia o projekte ropovod Bratislava-Schwechat. (2017, December). Retrieved from
https://​www​.petrzalka​.sk​/wp​-content​/uploads​/2019​/03​/Informacia​_ropovod​.pdf
Kavina, P. (2009). Surovinové zdroje. In Potůček, M., & Mašková, M. (2009, Eds.), Česká republika – trendy,
ohrožení, příležitosti (pp. 307-330). Praha: Karolinum.
LAMA Energy Group. (2018). Consolidated annual report 2017. Retrieved from:
http://​static​.lamagroup2​.s8​.upgates​.com​/p/p5ba245e441e5d​-vyrocni​-zprava​-2017​-en​.pdf
MERO. (2010, May 6). Dohoda z Minsku zvýší bezpečnost dodávek ropy. Retrieved from http://​www​.mero​.cz/
MERO. (2014, March 12). MERO can now replace the Druzhba with the spare capacity of the Western European
TAL crude oil pipeline. Retrieved from https://​www​.mero​.cz​/en​/novinky​-archiv​-novinek/
MERO. (n.d.a). Informační povinnost: Projekty společného zájmu. Retrieved from https://​www​.mero​.cz​
/informacni​-povinnost​/PCI/
MERO. (n.d.b). Technické údaje ropovodu IKL. Retrieved from: https://​www​.mero​.cz​/provoz​/technicke​
-udaje​-ikl/
MERO ČR, a. s. Retrieved from http://​www​.mero​.cz/
The Oil Sector 81
Ministerstvo dopravy. (2017). Ročenka dopravy České republiky 2017. Retrieved from https://​www​.sydos​.cz​/cs​
/rocenka​_pdf​/Rocenka​_dopravy​_2017​.pdf
Ministerstvo průmyslu a obchodu. (2015a). Národní akční plán čisté mobility. Retrieved from
https://​www​.mpo​.cz​/assets​/dokumenty​/54377​/62106​/640972​/priloha001​.pdf
Ministerstvo průmyslu a obchodu. (2015b, March). Ropa, ropné produkty: Bilanční přehled za rok 2014.
Retrieved from https://​www​.mpo​.cz​/cz​/energetika​/statistika​/ropa​-ropne​-produkty​/ropa​-a-ropne​-produkty​
-za​-rok​-2014​--157142/
Ministerstvo průmyslu a obchodu. (2016, August). Ropa, ropné produkty: Bilanční přehled za rok 2015.
Retrieved from https://​www​.mpo​.cz​/cz​/energetika​/statistika​/ropa​-ropne​-produkty​/ropa​-a-ropne​-produkty​
-za​-rok​-2015​--179192/
Ministerstvo průmyslu a obchodu. (2017, October). Ropa, ropné produkty: Bilanční přehled za rok 2016.
Retrieved from https://​www​.mpo​.cz​/cz​/energetika​/statistika​/ropa​-ropne​-produkty​/ropa​-a-ropne​-produkty​
-za​-rok​-2016​--232866/
Ministerstvo průmyslu a obchodu. (2019). Státní energetická bilance ČR. Retrieved from https://​www​.mpo​.cz​
/cz​/energetika​/statistika​/energeticke​-bilance​/souhrnna​-energeticka​-bilance​-statu​-v-metodice​-eurostatu​-za​
-leta​-2010​-2017​--243586/
Ministerstvo životního prostředí / Česká geologická služba. (2016, October). Surovinové zdroje České
republiky: Nerostné suroviny 2016. Retrieved from: http://​www​.geology​.cz​/extranet​/publikace​/online​
/surovinove​-zdroje​/surovinove​-zdroje​-ceske​-republiky​-2016​_m.pdf
Ministerstvo životního prostředí / Česká geologická služba. (2018, October). Surovinové zdroje České
republiky: Nerostné suroviny 2018. Retrieved from: http://​www​.geology​.cz​/extranet​/publikace​/online​
/surovinove​-zdroje​/surovinove​-zdroje​-ceske​-republiky​-2018​.pdf
Ministerstvo životního prostředí / Česká geologická služba – Geofond. (2009). Surovinové zdroje České
republiky – nerostné suroviny (stav 2008). Praha: Česká geologická služba – Geofond.
MND. (n.d.). About MND. Retrieved from: http://​www​.mnd​.eu​/en​/about​-mnd/
Nowak, O., & Hnilica, J. (2010). Rafinérský průmysl v České republice a energetická bezpečnost v oblasti dodávek
ropy. Ekonomika a Management, 2010 (3). Retrieved from http://​www​.ekonomikaamanagement​.cz​/cz/
OMV. (2019). Annual Report 2018. Retrieved from https://​www​.omv​.com​/pbd​_download​/186​/875​/OMV​_Annual​
%20Report​_2018​.pdf
OMV. (n.d.). O OMV: Organizace. Retrieved from https://​www​.omv​.cz​/cs​-cz​/o-omv​/omv​-ceska​-republika​
/organizace
Paramo, a.s. (2010). Výroční zpráva 2009. Retrieved from http://​www​.paramo​.cz/
Paramo, a.s. (2019). Výroční zpráva 2018. Retrieved from: http://​www​.paramo​.cz​/CS​/o-nas​/Documents​
/PARAMO​_a_s​_VZ​_2018​.pdf
Petrol media. (2017, 20 June). EuroOil prochází zásadní modernizací. Retrieved from
http://​www​.petrolmedia​.cz​/aktuality​/eurooil​-prochazi​-zasadni​-modernizaci​-8182​.aspx
Ropa z Ruska neteče už tři měsíce. Má to být nátlak na Temelín?. (2012, July 11). iDNES.cz. Retrieved from
https://​www​.idnes​.cz​/ekonomika​/domaci​/ropa​-z-ruska​-netece​-uz​-tri​-mesice​.A120711​_184952​_ekonomika​_neh
Roškanin, M. (2006). Ropovod IKL nebude otočen. Magazín PETROL, 2006(6), p. 6.
Roškanin, M. (2007). Uzavře Rusko ropovod Družba? Česko by mělo problém, odkud ropu brát. Magazín
PETROL, 2007(4), pp. 8-9.
Roškanin, M. (2008a). Cenná závislost: Poučí Česko zkušenost s přiškrcením dodávek ropy Družbou? Magazín
PETROL, 2008(5), p. 9.
Roškanin, M. (2008b). Slováci chtějí otočit tok v Družbě – Hrozí ukončení přepravy starým ropovodem. Magazín
PETROL, 2008(3), p. 7.
Roškanin, M. (2009). Dodávky ropy budou plynulejší - Mero uzavřelo dohodu s ruským přepravcem ropy.
Magazín PETROL, 2009(4), p. 6.
SDA. (2019). Statistiky: Přehled stavu vozového parku. Retrieved from http://​portal​.sda​-cia​.cz​/stat​.php​?v#str​=vpp
Shell Czech Republic, a.s. (2018). Výroční zpráva za rok 2017. Retrieved from https://​or​.justice​.cz​/ias​/ui​/vypis​-sl​
-detail​?dokument​=​53527256​&​subjektId​=​423732​&​spis​=​73473
Správy Pravda. (2018, August 14). Pre ropovod Bratislava - Schwechat sa trasa ešte nenašla. Retrieved from
https://​spravy​.pravda​.sk​/ekonomika​/clanok​/480355​-pre​-ropovod​-bratislava​-schwechat​-sa​-trasa​-este​
-nenasla/
The Oil Sector82
Státní energetická koncepce. (2004). Retrieved from https://​www​.mpo​.cz​/dokument5903​.html
Sušanka, F. (2010, 2. srpen). Třetí ropovod do ČR by mohl vést z Rakouska, nebo Německa. Mediafax. Retrieved
from http://​zpravy​.kurzy​.cz​/237137​-e15​-cesko​-zvazuje​-treti​-ropovod/
The future of Russian oil imports to the Czech Republic via the Druzhba pipeline remains unclear. (2012,
September 27). EnergyGlobal. Retrieved from https://​www​.energyglobal​.com​/pipelines​/business​-news​
/27092012​/the​_future​_of​_russian​_oil​_imports​_to​_the​_czech​_republic​_via​_druzhba​_remains​_unclear/
The Transalpine Pipeline. Retrieved from http://​www​.tal​-oil​.com/
UNIGEO a.s. (n.d.). Retrieved from https://​www​.unigeo​.cz/
Unipetrol. (2016, November 22). Unipetrol napojí Českou republiku na ropovod Adria. Retrieved from
http://​www​.unipetrol​.cz​/cs​/Media​/TiskoveZpravy​/Stranky​/ropovod​-Adria​.aspx
Úřad vlády ČR, & Nezávislá energetická komise. (2008, September 30). Zpráva Nezávislé odborné komise pro
posouzení energetických potřeb České republiky v dlouhodobém časovém horizontu. Retrieved from
http://​www​.vlada​.cz​/assets​/ppov​/nezavisla​-energeticka​-komise​/aktuality​/zpravanek081122​.pdf
Vlček T. (2015). Dizertační práce: Infrastrukturní alternativy zásobování České a Slovenské republiky ropou ve
středoevropském prostoru. Retrieved from https://​is​.muni​.cz​/th​/ucjkd​/Dizertacni​_prace​_Vlcek​.pdf
Vlček, T. & Černoch, F. (2013). Aktuální témata a projekty v oblasti skladování a dopravy ropy do ČR. Paliva, 5(1),
pp. 1-6. Retrieved from http://​paliva​.vscht​.cz/
Zákon č. 89/2016 Sb. (2017). Retrieved from https://​www​.zakonyprolidi​.cz​/cs​/2016​-89
Zaplatílek, J. (2007). Zásobování České republiky ropou. Pro-Energy magazín, 2007(2), pp. 68-71. Retrieved from
http://​www​.pro​-energy​.cz​/clanky2​/4.pdf
Zaplatílek, J. (2008). Bezpečnost a spolehlivost dodávek zemního plynu, ropy a ropných produktů. Retrieved
from www​.aem​.cz​/svse​/ae080327​/mpo​_zaplatilek​.ppt
Žižka, J. (2010, August 2). Česko zvažuje třetí ropovod. E15. Retrieved from http://​www​.e15​.cz/
The Natural Gas Sector 83
Chapter 5: The Natural Gas Sector1
Tomáš Vlček, Jana Červinková
5.1	 Introduction
The peak development of the gas industry in the Czech Republic came in the 1960s. In addition to the launch
of the gasification process (the shift from coal gas to natural gas, culminating in the gasification of the entire
Republic in 1996), there were also both structural and contractual efforts to ensure that gas supplies would
come in from abroad. In 1967, the Brotherhood pipeline was launched (in 1969, the connection from Slovakia to
Austria’s Baumgarten and der March followed), extended to Germany in 1970 under the name Transit Pipeline
(see Blažek, 2009, p. 134). It went into operation in 1972. Beginning at that time, the Czech Republic, owing to its
geographic position, served as an important transit country for Russian gas directed westwards until the commissioning
of the Nord Stream pipeline and subsequent infrastructure in 2011 (see Reuters, 2012). With new volumes
of gas coming through the Northern transit route into the Czech Republic, the flow of natural gas has turned.
The gas flow from west to east will be enhanced when the Nord Stream 2 is commissioned, something which is
expected in 2019 (see Gazprom, n.d.a)
In the 1990s, the Transit pipeline was opened up to privatization but no purchase was made until 2002, when
the pipeline was bought by Germany’s RWE.2
(see Jirušek, 2017, p. 212) In 1996, the Government of Prime Minister
Václav Klaus announced the need to diversify natural gas supplies and to remedy the country’s total dependence
on the Russian Federation3
. The importance of that decision is tied to the announcement by then-Minister of
Industry and Trade Vladimír Dlouhý that the Norwegian company Statoil had won a supply contract in the presence
of that country’s King Harald V (see Strašíková, 2009). On May 1, 19974
, when the contract5
came into force, it
brought the Czech Republic a substantially enhanced security of supply. (see Jirušek, 2017, p. 204–206) The Czech
Republic thus became the first Central European country to diversify its natural gas supply. In 2017, 8.527 bcm/y
(see ERÚ, 2018a, p. 20) of natural gas were consumed in the Czech Republic. More than 98 % of demand was
satisfied by imports, less than 2 % from domestic production. Approximately two-thirds of that was from Russia,
with the rest purchased on the spot markets, mainly in Germany (see OTE, 2018, p. 25).
1		 The chapter in some of its parts makes reference to the publication of the research project The Future of Natural Gas Security
in the V4 Countries: A Scenario Analysis and the EU Dimension (see Černoch, Dančák, Kovačovská, Ocelík, Osička, & Vlček, 2011).
2	 No less interesting is that OAO Gazprom has several times showed interest in the Transit pipeline. Even though their offers were equal
to the competition’s and they even committed to engage in the further development of the gas network (and the Benzina network of
petrol stations), the offer was each time rejected for political reasons (for more details see Blažek, 2009, p. 152–153).
3	 Ironically, in 2009, already as a president, Václav Klaus did not see energy relations with Russia as a threat, even after the infamous gas
crisis that took place in January of that year (see Holzer, Jirušek, & Kuchyňková, 2020, p. 69).
4	 RWE Supply & Trading CZ, a.s., a. s. has concluded contract with a consortium of Norwegian producers (ExxonMobil Production Norway
Inc., Statoil Hydro ASA, Norske ConocoPhillips AS, TOTAL E&P NORGE AS and ENI Norge AS) until 2017.
5	 Aside from Norway, there were numerous offers of gas supplies to the Czech Republic: by Dutch N. V. Nederlandse Gasunie; German
Wintershall Holding GmbH; multinational consortium of companies BEB, Mobil and British Gas; Russian OAO Gazprom and German
E.ON Ruhrgas AG. The fact that it was the only variant granting partial independence from supplies from Russia nevertheless spoke in
favour of the Norwegian offer (see Strašíková, 2009).
The Natural Gas Sector84
Tab. 5.1: Natural Gas Supplies
Russian Federation Kingdom of Norway6
Launch of Supply 1967 1997
Resource Areas Mostly from the fields of Urengoy,
Yamburg,Medvezhye, Zapolyarnoye
Fields Draupner E, Sleipner, Troll A, Mikkel,
Kristin and other fields in the continental
shelf of the Norwegian Sea
Transit Countries Ukraine, Slovakia Germany
Conclusion of Contract October 1998, 2006* May 1st
, 1997
Contract Until 2035** Expired in 2017
Volume of contract 8–9 bcm/y 53 bcm in total, ca. 3.0 bcm/y
* In October 1998, a contract between Transgas, a.s. and OOO Gazexport signed to supply 8 to 9 bcm/y of natural gas for a period of
15 years. The contract, with a defined price and transport route, was to run until 2013. In 2006, RWE Supply & Trading CZ, a. s. (successor
to RWE Transgas, a.s.) extended the contract until 2035. But the extension did not specify the gas price or transport route.
** This at the same time means definitely securing the Czech Republic’s transit position until this year, since one-third of the natural
gas supplied by Russia to Western Europe will continue to be transported through Czech territory.
Source: T. Vlček; Ministerstvo průmyslu a obchodu, 2010, p. 4–5; Kastl, 2008.
5.2	 Deposits, Mine Production, Companies and Traders
In terms of categorization, the Czech natural gas industry may be divided into two levels. The first of these consists
of the Czech gas pipeline operators who participate in the gas market and includes three kinds of player:
those involved in gas transit, in gas distribution, and in gas sales. The current holder of an exclusive license for
gas transit is NET4GAS, s.r.o., which operates more than 3800 km of gas pipeline. There are three operators of
regional distribution networks who own their own facilities and are directly connected to the transit network7
.
And there are approximately 65 operators of local distribution networks who own their own facilities but are not
connected to the transit network.
The second level of categorization breaks down the gasworks’ individual components on the Czech gas market:
mining companies, holders of purchase contracts, transport providers, the transit and distribution of natural
gas and, finally, natural gas traders.
5.2.1 Deposits and the Production of Natural Gas in the Czech Republic
Natural gas is a mixture of gaseous and liquid alkanes ranging from methane to butane (respectively CH4
- C4
H10
),
which makes natural gas, unlike oil, basically the same regardless of where in the world it it is found, differentiated
only in terms of the content of other hydrocarbons, dust, water and sulphurous materials, things which in
any event are purified out before the extracted natural gas is sent for long distance transport. Czech natural gas
deposits are minor, located in Southern and Northern Moravia. The natural gas deposits are almost exclusively
tied to oil deposits.
6	 Norwegian gas was meant to enter the Czech Republic at the Hora Sv. Kateřiny station. In reality, the supplies from Norway remained
“virtual” or “trade” gas during periods of continuous Russian gas flow rather than physical supplies. Norwegian gas was swapped
for Russian gas, which was supplied to the Czech Republic either through the gas pipeline from Berlin to Hora Sv. Kateřiny, through
the Transgas system, or through the Nord Stream. In a nutshell, all gas came to the Czech Republic through Germany. Norwegian gas
was only to be supplied to the Czech Republic in the case of cutbacks or interruptions to supplies from Russia. During the crisis of
January 2009, Norwegian gas was in fact the only gas actually flowing into the Czech Republic (see Mejstřík & Marková, 2010, p. 19;
Jirušek & Kuchyňková, 2018, p. 823).
7		 GasNet, s.r.o., E.ON Distribuce, a.s., and Pražská plynárenská Distribuce, a.s.
The Natural Gas Sector 85
Tab. 5.2: Deposits, reserves and production of natural gas in the Czech Republic
2013 2014 2015 2016 2017
Deposits – total number 96 93 95 96 96
– exploited 40 40 46 64 64
Total mineral reserves 31,085 27,949 30,948 30,839 30,546
– economic explored reserves 7,646 7,491 7,494 7,381 7,236
– economic prospected reserves 20,458 20,458 20,456 20,481 20,479
– potentially economic reserves 2,981 2,956 2,998 2,977 2,951
– exploitable (recoverable) res. 5,512 5,064 5,057 4,918 4,801
Production 207 198 200 169 171
Note: reserves numbers in mcm.
Source: Ministerstvo životního prostředí / Česká geologická služba – Geofond, 2018, p. 176
Five companies are engaged in gas extraction, these being MND, a.s., Green Gas DPB, a.s., LAMA GAS & OIL,
s.r.o., UNIMASTER spol. s.r.o., and Unigeo, a.s. (see Ministerstvo životního prostředí / Česká geologická služba,
2018, p. 192). The major producer is MND, which in 2017 extracted 116 million m3
of natural gas (see MND, a.s.,
2017, p. 4). Green Gas DPB is active in surface degasification, which is the mining of adsorbed natural gas (sometimes
known as coal mine gas). Adsorbed natural gas is a less traditional source tied to black coal, whose genesis
is not precisely known. Either it is released from coal or like other caustobioliths, it emerges as the result
of sufficient pressure and temperature in sediments over a longer period. Green Gas DPB extracts this gas in
the depths of the closed black coal mines of OKD Degasification involves air being released into the mine wells
and the ensuing drainage of the pumped gas. Adsorbed gas accounts for 88% of total deposits of natural gas in
the Czech Republic.
5.2.2 Holders of Purchase Contracts
The largest holder of a purchase contract in the Czech Republic is RWE Supply & Trading CZ, a. s.8
, a gas and power
wholesale trader. Trade in gas still proceeds mostly on the basis of long-term contracts, in spite of developing EU liberalisation
activities. The long term contracts provide consumers with stability of supplies, while as far as suppliers
are concerned, they represent the grounds and capital necessary for extraction, transportation, research and other
activities. Generally, the wholesale price of natural gas then to a certain measure depends upon the cost of extraction
and transportation itself. The wholesale price of gas used to be largely dependent on the price of oil, oil products,
and electricity. This method of pricing was introduced in the 1980s and fully implemented in the 1990s. Before then,
the price of natural gas had been fixed on a production costs basis. As a result of the very low price of natural gas
(compared to oil), increasing demand and use, and pressure exerted by the producing countries, this form of pricing
has been in use since 1980, when natural gas pricing based on the price of oil and oil products was proposed at
the OPEC session in Vienna (see Kysilka, 2007, p. 22–23). 85% of the price was based on the commodity price, with
the remaining 15% tied to transport costs, distribution, market operator fees, etc. Nevertheless, lately a new type of
contract has emerged which indexes natural gas prices to hub prices9
. This results in less predictable and potentially
more volatile prices, something that is, of course, not attractive to suppliers. There are three traditional gas
pipeline suppliers in Europe: Russia’s Gazprom, Norway’s Equinor ASA (formerly Statoil), and Algeria’s Sonatrach.
Of these, only Equinor offers non-traditional contracts with hub price indexation. Gazprom and Sonatrach aim to
preserve traditional price indexation to oil, which ensures more predictable future revenues (see Theisen, 2014, p.
11). In the Czech Republic, the gas trade is based mostly on long-term contracts. The remainder of Czech gas demand
is covered by short-term purchases and domestic production, which amounts to approximately 2 % of total
demand. The most important contract for the Czech Republic is that concluded by RWE Supply & Trading CZ, a.s.
8	 A successor of RWE Transgas, a.s.
9	 Gas hub price indexation means that gas prices are based on the prices on various gas hubs, i.e. on spot prices, and therefore reflect
the development of gas markets in contrast to gas prices based on oil prices.
The Natural Gas Sector86
with OOO Gazprom Export, the supplier of Russian gas, which runs until 203510
. For information about other gas
traders, see subchapter 5.2.4.5.
Historically, long-term contracts have supplied a large share of Czech gas market. Lately, however, the share
of purchases on gas hubs has risen along with the number of shippers who supply the Czech consumers.
5.2.3 The Transportation, Transit and Distribution of Natural Gas
The only holder of a natural gas transport license in the Czech Republic is NET4GAS, s.r.o. (known before March
3, 2010 as RWE Transgas Net, s.r.o.). NET4GAS, s.r.o. owns the gas transmission network in the Czech Republic.
In addition to the transit of Russian natural gas to other countries, it also provides transmission of gas to particular
regions of the Czech Republic, as it is connected to the distribution network through delivery stations.
Most natural gas exported from the Russian Federation to the Czech Republic comes from the Russian
Urengoy, Yamburg, Medvezhye, and Zapolyarnoe giant gas fields. (Koďousková, Kuchyňková, Leshchenko,
& Jirušek, 2014, p. 148–149) The existing pipeline networks for gas are built on foundations dating from the Cold
War. The first pipeline was the multipurpose Brotherhood pipeline, completed in 1967. It fetched natural gas from
the Tyumen region of western Siberia. In the 1970s, the Transgas Company emerged in Czechoslovakia, starting
to develop and run pipeline networks, while the Transgas pipeline went into operation in 1972, consisting of several
parallel pipelines set in different time intervals.11
Gas then flowed to Europe through the Brotherhood and
Yamal gas pipelines, which join the Soyuz pipeline in the Western Ukraine. These three bundles then become
the so‑called Transgas system. Ever since, this road has been named the “Transgas System” (sometimes also
known as the “classic route”). Historically, before the commissioning of the Nord Stream pipeline in 2011, gas travelled
mainly through transit countries Ukraine and Slovakia, while the Transgas System was also partly supplied
via the connector between the Yamal Pipeline and the Brotherhood from Belorussia to Ukraine. The gas was supplied
from Slovakia to the Czech Republic using the Lanžhot border point, where it was delivered by the Slovak
network operator Eustream, a. s. Gas was supplied to Germany through this point from November 1999 (earlier, it
had transited solely through Poland using the Yamal pipeline). But after the Russian gas crisis in 2009, the Czech
transmission network was adapted to reverse-flow, and after the commissioning of the Nord Stream in 2011,
the flow of natural gas through the Czech Republic was reversed, with the majority of natural gas now transiting
in the west-east direction. Russian gas coming from the Nord Stream is received at the Hora Sv. Kateřiny border
point. From there, it flows to the Lanžhot border point, from where it flows through the Slovak transmission network
to the Baumgarten gas hub12
in Austria. From Lanžhot it also can either be supplied to Slovak customers or
continue on to Ukraine. Nord Stream brings natural gas from Russia, through the Baltic Sea, to the Greifswald
interconnection point in Germany. The first line was commissioned in November 2011 and the second line in
October 2012 (see Reuters, 2012).
10	 Such a long-term contract between RWE Supply & Trading CZ, a.s. and OOO Gazprom Export (until 2035) is nothing exceptional in
Europe, as similar long-term contracts are concluded by OOO Gazprom Export and other suppliers with all major gas companies in
the EU (such as ENGIE (former GDF Suez), E.ON Ruhrgas AG, VNG Verbundnetz Gas AG, OMV Group, N. V. Nederlandse Gasunie, Eni
S. p. A., Wintershall Holding GmbH, etc.) (see Kysilka, 2007, s. 22).
11	 For more details on the transit pipeline see Čech & Tichý, 2001
12	 Central European Gas Hub (CEGH) AG, originally named Gas Hub Baumgarten, is a joint-stock company whose shareholders are OMV
Gas & Power GmbH (65%), Wiener Börse AG (20%), and Eustream a.s. (15 %).
The Natural Gas Sector 87
Tab. 5.3: Transmission system and underground gas storages in the Czech Republic
Source: ERÚ, 2018b, p. 52
The transmission network of the Czech Republic is connected to neighbouring countries through border
points at four locations. The first is the Lanžhot border point with Slovakia, which is mainly used for the transit
of Russian gas from the Czech Republic to Slovakia. But it can also be employed for gas purchases on the spot
market from the hub at Baumgarten an der March in Austria (Central European Gas Hub/CEGH). The Czech
Republic is not connected to the CEGH directly (but there is a project to construct an interconnecting gas pipeline
from Břeclav, see chapter below); as a result, purchased gas is sent through the Slovak gas network Eustream,
a.s. to the Baumgarten hub in Austria. The second location is on the border with the German Federal Republic
of Saxony. Through the border points Hora Sv. Kateřiny and Brandov,13
gas flows predominantly from the Nord
Stream pipeline, along with gas bought on the German spot markets (the Gaspool virtual trading point); in both
cases the gas is of Russian origin. The third existing border station is Waidhaus14
, which is mainly used to transfer
Russian gas from the Czech transmission network to Germany. It connects the Czech transmission network
with European pipelines using the MEGAL15
pipeline. The station may also be used for gas purchased on the spot
market. The fourth location is the interconnection point with Poland at Cieszyn/Český Těšín. The Czech transmission
system is connected to Poland via the Stork pipeline, which was commissioned in 2011 (see NET4GAS, n.d.b).
In 1972, the transit gas pipeline from Russia came into operation. Historically, it took natural gas to Germany
and France through the Czech Republic, but currently it is used to transfer gas to Slovakia and further on to
the hub at Baumgarten and Ukraine. Since 1972, therefore, the Czech Republic has served as an important transit
link due to its location. The transit fees for transmission of gas are set by the Energy Regulatory Office in regularly
published Price Decisions. Based on the legislation of the European Union, the gas transmission sector is
a regulated business (see chapter 5.3). Natural gas shippers pay a standardized transit fee to the transmission
system operator, NET4GAS, s.r.o., for gas to be transmitted through the system.
The volume of gas transited reached 42.5 bcm per year in 2017 and 48.1 bcm per year in 2018. In 2018, 8.2 bcm
of gas (out of 48.1 bcm/y) was transported for the Czech gas market. (see NET4GAS, 2019, p. 15)
13	 The subsequent German transmission network is operated by the ONTRAS–VNG Gastransport GmbH company and by GASCADE
Gastransport GmbH.
14	 The subsequent German transmission network is operated by GRTgaz Deutschland GmbH and Open Grid Europe GmbH.
15	 The capacity of MEGAL Süd is 22 bcm/y and is fully used year after year. MEGAL (Mittel-Europäische-Gasleitung) is operated by GRTgaz
Deutschland GmbHand Open Grid Europe GmbH.
The Natural Gas Sector88
5.2.4 Important Actors on the Czech natural gas market
After the privatization of the Czech natural gas industry, the German concern RWE was the dominant player on
the gas market for several years. It controlled key sectors of the Czech natural gas market. RWE Transgas, a.s. was
a company involved in the transmission, distribution, storage, and trade of gas for several years. But because of
legislative requirements imposed by the European Union,16
the Czech natural gas market underwent a so-called
unbundling process17
. In 2006, RWE Transgas Net, s.r.o. was split off from RWE Transgas, a.s. as the Czech transmission
system operator. In 2007, RWE Gas Storage, s.r.o. was established as the storage system operator and
RWE GasNet, s.r.o. as the distribution system operator.
As a result of the so-called gas legislative packages, the gas market throughout the European Union has been
divided into several levels.
5.2.4.1 Transmission system operator
RWE Transgas Net, s.r.o. was renamed NET4GAS, s.r.o. in 2010 as a further step in the liberalization of the gas
market. NET4GAS is the sole holder of a transmission system operator (TSO) licence in the Czech Republic. It
conrols the international transit of natural gas across the Czech Republic and national transmission of natural gas.
A consortium consisting of the German Allianz Insurance Company (50 %) and Canada’s Borealis Investment
Fund (50 %) bought NET4GAS in 2013 from RWE for more than CZK 41 billion (see E15, 2013).
5.2.4.2 Distribution system operators
There are three distribution system operators (DSOs) in the Czech Republic. The biggest is GasNet, s.r.o.,18
which
was created in 2007 by unbundling from RWE Transgas, a.s. Several regional distributors of gas19
were merged
into GasNet over the course of time (see GasNet, n.d.). Nowadays GasNet operates across most of the Czech
Republic except for the Southern Bohemia and Prague regions (see Table 5.4).
Pražská plynárenská Distribuce, a.s. is a DSO operating in Prague. It was created in 2005 by unbundling from
Pražská plynárenská, a.s. (see PPD, n.d.). Today, it is a 100 % subsidiary of Pražská plynárenská, which is wholly
owned by the City of Prague (see Pražská plynárenská, 2014). The final Czech DSO is E.ON Distribuce, a.s., which
operates in Southern Bohemia. It is a subsidiary of E.ON Česká republika, s.r.o., from which it was unbundled in
2005 (see E.ON, n.d.).
16	 The so-called Three Energy Packages aim at creating a single electricity and gas market in the European Union. Three gas directives are
included in the Energy Packages whose focus is the liberalization of the European gas market – Directive 98/30/EC, Directive 2003/55/
EC, and Directive 2009/73/EC.
17	 According to the official website of the European Commission, unbundling ’is the separation of energy supply and generation from
the operation of transmission networks’. This means a company cannot simultaneously operate in the transmission, distribution, and
generation of energy. (see European Commission, n.d.a)
18	 The company was called RWE GasNet, s.r.o. until September 2016.
19	 Středočeská plynárenská Net, s.r.o., Severočeská plynárenská Net, s.r.o., Západočeská plynárenská Net, s.r.o., Východočeská plynárenská
Net, s.r.o., Jihomoravská plynárenská Net, s.r.o., Severomoravská plynárenská Net, s.r.o.
The Natural Gas Sector 89
Tab. 5.4: Distribution system operators in the Czech Republic
Source: ERÚ, 2018b, p. 53
5.2.4.3 Storage system operators
Three operators of underground gas storage facilities are active on the Czech gas market. Innogy Gas Storage,
s. r. o.20
owns six reservoirs in the country (Háje, Dolní Dunajovice, Tvrdonice, Lobodice, Štramberk and Třanovice;
see Picture 1). Another storage system operator (SSO), MND Gas Storage, a.s. is fully owned by MND, a.s. , which
is itself part of the European firm MND Group AG. It works in oil and gas production, gas storage, and power and
gas trading,21
. MND Gas Storage owns the Uhřice Reservoir. This company also operates the Dolní Bojanovice
reservoir. MND and Gazprom Export LLC own a further company operating an underground gas storage facility
(Dambořice) in the Czech Republic – Moravia Gas Storage, a.s. (see Gazprom Export, 2016).
5.2.4.4 Gas producers
Five companies in all are engaged in gas extraction (see Ministerstvo životního prostředí / Česká geologická
služba, 2018). As indicated above, MND, a.s. is fully owned by MND Group AG. Green Gas DPB, a.s. is a part of
Green Gas International B.V., which operates several clean energy projects in Europe. Another drilling company
is LAMA GAS & OIL, s.r.o. owned by LAMA ENERGY GROUP, a.s. holding. UNIMASTER spol. s.r.o. and Unigeo,
a.s., whose sole shareholder is investment group Touzimsky kapital, s.r.o.
5.2.4.5 Wholesale and Retail Traders
In addition to several companies who supply the Czech Republic with natural gas at the wholesale level, there
are many companies who supply gas, either purchased, acquired directly from abroad, or already transported to
the Czech Republic, to retail consumers.22
20	In October 2016 the RWE concern in the Czech Republic (but not only in the Czech Republic) changed its name to innogy and completely
rebranded its company identity. The new company innogy was created as a subsidiary of the global RWE concern with aim to
focus its activities in trade, networks and renewable sources. All companies previously operating under the RWE concern are now under
Innogy. (see innogy, 2016) In March 2018 RWE sold its 76.8% stake in innogy SE (European energy company) to E.ON (see RWE AG,
2018). The concrete consequences of this transaction in regard to possible change of names and rebranding are still not clear, nevertheless
some changes can be expected.
21	 The sole shareholder is private investment group KKCG a.s.
22	In a few cases traders can operate on both levels, for instance RWE, E.ON, ČEZ.
The Natural Gas Sector90
The largest holder of a purchase contract in the Czech Republic is RWE Supply & Trading CZ, a. s.23
, a gas
and power wholesale trader. VEMEX s.r.o. was the main alternative supplier of natural gas in the Czech Republic.
As of 2011, Gazprom Germania GmbH was the majority owner of VEMEX (50.14 %) and is itself fully owned by
Russia’s Gazprom Export LLC, a subsidiary of PAO Gazprom. Due to economic problems, however, VEMEX was
replaced by Wingas GmbH, fully owned by Gazprom Germania. Wingas took over most of VEMEX’s existing contracts,
including at the wholesale level. Consequently, Wingas is currently the main alternative supplier after RWE
Supply & Trading (see euro, 2018; Jirušek, 2017, p. 204–208)
Important gas traders include Innogy Energie, a.s., Pražská plynárenská, a.s., E.ON Energie, a.s., ČEZ Prodej,
a.s., Wingas GmbH, BOHEMIA ENERGY Entity, s.r.o., and Centropol Energy a.s. There are dozens of other gas-trading
companies as well, but most have only a handful of end consumers. Their impact on the Czech gas market
as a whole is therefore negligible.
5.2.4.6 National Regulatory Authority
The Energy Regulatory Office (Energetický regulační úřad, ERÚ) is a Czech National Regulatory Authority. The ERÚ
is an independent administrative body that is responsible for regulating the entire energy sector. The ERÚ is run
by the Board of the ERÚ (ERÚ Board), which has five members and is appointed and dismissed by the government
at the behest of the Ministry of Industry and Trade. The ERÚ is funded independently under the state budget and
is in no way linked to any domestic or foreign entity. Its main competency within the gas industry includes regulating
fees for the transmission, distribution, and storage of gas24
, granting licences25
, and approving legislation
and documents pertaining to the gas market.26
(see ERÚ, n.d.)
5.2.4.7 Gas Market Operator
OTE, a.s. is the Czech electricity and gas market operator. It was created in 2001 and its sole shareholder is the government
of the Czech Republic. OTE operates a day-ahead gas market and intraday gas market. Another key role of
OTE is processing data used to settle imbalances between contracted and metered volumes of gas. (see OTE, n.d.)
5.2.4.8 Czech Gas Association
In the natural gas sector, there is also the Czech Gas Association, which aims at increasing expertise in the natural
gas, mediating the transfer of information related to the gas industry, and representing the Czech industry
at the international level (for example, in the International Gas Union) (see Český plynárenský svaz, n.d.).
5.2.5 Underground Natural Gas Storage
Innogy Gas Storage s.r.o. operates six out of nine storage facilities (Háje, Dolní Dunajovice, Tvrdonice, Lobodice,
Štramberk and Třanovice) that are connected to the gas pipeline network and treats them as a single Virtual Gas
Storage Reservoir (see Innogy Gas Storage, n.d.). The reservoir Uhřice is operated by MND Gas Storage, a.s. and
the reservoir Dambořice by Moravia Gas Storage, a.s. The final underground gas storage facility, Dolní Bojanovice,
is owned by SPP Storage, s.r.o. The reservoir at Dolní Bojanovice is not currently connected to the Czech gas pipeline
network, but it is connected to the Slovak transmission network. It follows that Czech market participants cannot
utilize the capacity of this underground storage. Nevertheless, there is a plan to connect it to the NET4GAS’
transmission network (see SPP Storage, 2016).
If we do not take into account the Dolní Bojanovice reservoir, which is used by Slovakia, the overall capacity
is 3.2 bcm. With respect to Czech gas demand, which in 2017 produced 8.527 bcm (see ERÚ, 2018a), this amount
covers more than a third of the yearly demand for natural gas (37.5%). Security positives (in addition to coverage
for any potential curtailment of supply, there is also the capability to balance the differences between supply and
demand and resist weather impacts) based on the existence of underground reservoirs are, however, closely tied
23	A successor of RWE Transgas, a.s.
24	The fees are being regularly published in the so-called Price Decisions.
25	Based on Act No. 458/2000 Coll. Of 28 November 2000, on the Conditions of Business and State Administration in Energy Industries
and Changes to Certain Laws (the Energy Act) the ERÚ grants licenses for the following: transmission of gas, distribution of gas, storage
of gas, gas trade, gas production, market operator.
26	Among others, the Gas Market Rules, operators’ codes, commercial terms and conditions, Ten-Year Network Development Plan of
the Czech Republic.
The Natural Gas Sector 91
to the amount of gas which is stored in them. Traditionally27
, natural gas has been injected into reservoirs during
the summer months, when demand and therefore spot prices decline because of the warm weather. The injection
process lasts 2–3 months. Important information is, however, to be read in total daily extraction performance.
During the winter, the reservoirs are capable of covering the total daily consumption of the Czech Republic only
at the beginning of the season. The maximum daily performance of reservoirs is 59.7 mcm, and decreases as
a function of decreasing pressure inside the reservoir. Maximum daily winter consumption in the Czech Republic
in 2017 was around 54.9 mcm (see ERÚ, 2018b, p. 4). In the case of possible disruption to supplies from Russia,
the shortfall between extraction from reservoirs and consumption may be covered using supplies from Germany.
The speed of extraction from reservoirs is determined by the extractability curve. Because of declining pressure
in reservoir, the speed of extraction declines proportionately with the length of the extraction process.28
The storage of gas has several uses and advantages. First, stored gas may be used to balance peak demand,
mainly during the winter. Second, traders may buy gas when prices fall with the drop in summer demand and sell
it during the winter months when demand and spot prices rise. Third, underground gas storage facilities serve
as an important element in securing the national supply because they provide necessary flexibility in the face of
fluctuations in supply or outright disruptions. Overall, underground reservoirs present an important component
of the instate gas system.
Tab. 5.5: Underground Natural Gas Storage Reservoirs in the Czech Republic and their Maximum Capacity as of March 31, 2018
Reservoir Owner Type of Reservoir Peak Withdrawal / Injection Capacity
(mcm/d)
Capacity (mcm)
Lobodice innogy Gas Storage, s. r. o. Aquifer* 42.2 / 35.7 2,707
Tvrdonice innogy Gas Storage, s. r. o. Depleted Field
Štramberk innogy Gas Storage, s. r. o.. Depleted Field
Dolní Dunajovice innogy Gas Storage, s. r. o. Depleted Field
Háje innogy Gas Storage, s. r. o. Cavern**
Třanovice innogy Gas Storage, s. r. o. Depleted Field
Uhřice MND, a. s. Depleted Field 10 / 5.4 280
Dambořice Moravia Gas Storage, a.s. Depleted Field 7.5 / 4.5 250
Total for the Czech gas market: 59.7 / 45.6 3,237
Dolní Bojanovice SPP Bohemia, a. s. Depleted Field 9 / 7 566
Total in the Czech Republic: 68.7 / 52.6 3,803
* An aquifer is an underground layer of water-bearing permeable rock from which groundwater can be extracted using a well. An aquifer
reservoir functions by pushing gas into the underground water-bearing bedrock so that that the pressure artificially causes the water
to be pushed to the lower layers thus creating space for natural gas to be stored.
** A cavern reservoir is created artificially, usually in former salt and coal mines. Háje reservoir is built where uranium mines originally lay.
Source: NET4GAS, 2018, p. 14; SPP Storage, 2019
27	Recently, this principle has not been strictly followed. Withdrawal from and injection into underground storage facilities is done by
traders following an economic imperative, who therefore inject gas into the storage facility when its price falls so they can wait to sell
it later at higher price.
28	Underground reservoirs alone would not have been able to cover the loss during the January 2009 gas crisis without affecting the population.
On January 5, 2009, a day before the outbreak of the gas crises, 15 million m3
of natural gas were supplied to the Czech Republic
from Russia through the Slovakian network Eustream, a. s., another 4.3 million m3
from the underground gas reservoir in Slovakia Láb I–
III, 5.3 million m3
from Norway via Hora Sv. Kateřiny, 1.0 million m3
from Germany through Olbernhau, 0.5 million m3
from Germany through
Waidhaus, and 20 million m3
from the Czech underground reservoirs, for a totals 46.1 million m3
of natural gas. A week later, on January
12, 2009, when the crisis reached its peak, the composition of supplies was as follows: zero from Russia and Slovakia, 1.8 million m3
from
PZP Láb I–III (another 3 million m3
were left to Slovakia), 19 million m3
from Norway and Germany via Hora Sv. Kateřiny (for Slovakia), 33
million m3
from Germany through Olbernhau, 0.5 million m3
from Germany via Waidhaus (at the same time, 27 million m3
was exported
along that route to Germany to cover its shortage as a result of the restriction of Russian gas supplies), and 34 million m3
from Czech
underground reservoirs. During this period, the extraction capacities of the reservoirs were used to the maximum effect. At the peak of
the crisis, total gas supplies therefore jumped to 58.3 million m3
. Because of freezing temperatures, average consumption in December
2009 ranged around 47 million m3
. With respect to the physical characteristics and extractability curve, the maximum extraction of reservoirs
at the peak of the crisis reached 34 million m3
. It is therefore evident that the reservoirs alone would be insufficient to cover consumption
and that the importance of diversified supplies of natural gas from Norway was demonstrated during the crisis (For data see
Petržilka, 2009b).
The Natural Gas Sector92
Underground gas storage capacity in the Czech Republic is more than adequate and there are no projects
currently underway aimed at increasing capacity or building new storage facilities. Moreover, overall interest in
underground storage capacity has fallen. This leaves little (economic) justification for new projects.
5.2.6 The Use of Natural Gas
Czech consumption of natural gas reached 8.527 bcm/y (see ERÚ, 2018a) in 2017. Industry was the largest consumer,
mainly the non-metallic materials, food and tobacco, engineering, iron and steel, and chemicals industries.
Households make up almost as big a share of consumption with their use of gas for cooking, home heating, and
warm water. Some consumption also takes place for heat generation, electricity generation, and for the combined
generation of heat and electricity (cogeneration)29
. However, this volume is not substantial and there is significant
space for growth, especially for the generation of electricity. The use of natural gas inside the transportation
sector, both in the form of compressed natural gas (CNG, 200 bars of pressure) and as a liquid (LNG at -162 °C),
is only at the beginning. The CNG version is currently more common. The use of natural gas in the transport sector
has been minimal so far, although the size of the automobile fleet is growing. In 2010, there were 2,500 CNG
vehicles in the Czech Republic. By 2018, that figure had grown to 22,600. But this is still a minimal number that
leaves significant potential (see CNG4you, 2019).
Tab. 5.6: Natural Gas Consumption in the Czech Republic by Sector
Total Consumption 301,491.0 (100%)
Transformation Purposes (electricity and heat generation) 58,443.3 (19.4%)
Energy Industry 3,983.4 (1.3%)
Distribution Losses 3,843.0 (1.3%)
Final non-energy consumption 3,715.2 (1.2%)
Industry 89,631.0 (29.7%)
Transport 2,928.6 (1.0%)
Other Sectors 138,946.5 (46.1%)
Trade and Public 49,825.8
Households 83,923.2
Agriculture (inc. Fisheries) 2,739.6
Other 2,457.9
Note: Data is in TJ.
Source: Ministerstvo průmyslu a obchodu, 2019, p. 22; Percentage conversion by author.
The exploitation of natural gas for electrical power production is rather modest in the Czech Republic. In 2017,
natural gas had a 3.9 % share in electricity generation (see ERÚ, 2018b, p. 8). Currently, the biggest natural gas
combined cycle power plant in the Czech Republic is Počerady, owned by ČEZ. Its installed capacity is 838 MWe.
The plant was finished in 2013, but during its construction, the situation on the energy market changed drastically.
Electricity prices dropped so low that electricity generation in Počerady was no longer cost-effective30
. It
follows that the plant has been used less than expected. (see ČEZ, n.d.a) Another combined cycle power plant is
owned by Sokolovská uhelná, právní nástupce, a.s. in Vřesová, with an installed capacity of 400 MWe. It was built
in 1995–1996 (see Sokolovská uhelná, 2018) and is currently undergoing modernization (see Sokolovský deník,
2018). The enormous advantage of this power plant is its ability to limit electricity output in an instant. It is able to
29	When it comes to the generation of electricity from gas, we must be careful how we interpret the data and differentiate between
the categories “gas” and “natural gas”, because a substantial portion of electricity is generated not only from natural gas but from biogas
and other gases, as well. In 2017, gross electricity generation from natural gas was 3,388.2 GWh (a 3.9 % share of gross electricity
generation), from other gases 2,879.7 Gwh, and from biogas 2,639 GWh. It follows that natural gas makes up only around 38 % (in 2014,
the share was only ≈19 %) of electricity generation from gases in the Czech Republic (ERÚ, 2018b, p. 8).
30	The project for the Mochovce, at that time owned by RWE, was canceled because of these market developments, which would result
in the plant being unprofitable (see Čelákovice, 2014).
The Natural Gas Sector 93
cut its output from 180 MW to 2 MW in one second31
. Another gas power plant with a combined cycle is located
in Kladno, owned by Alpiq; its installed capacity is only 110 MWe (see Alpiq, n.d.). And the final gas power plant,
with an installed capacity of 58 MWe, is in Prostějov (see Gama Investment, n.d.).
ČEZ plans other power plants using the combined cycle. The Mělník power plant in Horní Počaply has a planned
capacity of 800 MWe, and is intended to supply Mělník and Prague. Nevertheless, due to changes in the energy
sector, the project is currently under review. Another project is Úžín, on the outskirts of Ústí nad Labem (220 MWe).
It, too, is currently under review. Thus, there is no time schedule or any details available. (see ČEZ, n.d.b)
Combined cycle power plants and gas and combustion power plants are not one and the same thing. While
the gas and combustion power plant’s functioning is based on the simple principle of natural gas combustion and
the use of generated energy to start the turbines and produce electricity, the combined cycle power plant employs
two cycles. During the first (gas) cycle, natural gas is mixed with air and sent under pressure into a turbine,
where it burns and produces heat and consequently electrical power. High temperature flue gasses are brought
to a different boiler in thesecond cycle, where thermal energy (steam) is produced and, as a consequence, electrical
power. This production method increases energy efficiency, since the generation of steam for the steam
turbine uses the heat of the flue gases released from the gas turbine.
In 2018, combined cycle plants produced 3,648.3 GWh of electricity and the total installed capacity was
1,363.5 MWe (of which 838 MWe represents the installed capacity of the Počerady power plant). In 2017, 533.9 mcm
of gas were consumed in combined cycle plants, 316.3 mcm in the Počerady power plant only. The remaining gas
was consumed elsewhere among the 680 existing facilities, including the power plants in Vřesová and Kladno
(see ERÚ, 2018b, p. 27). Considering this high number and comparatively minimal gas consumption, it may be assumed
that there are many local sources with low capacity, such as gas boilers in homes.
Gas-fired power stations in 2018 produced 3,648.7 GWh of electricity and their total installed capacity was 895.9
MWethatsameyear(seeERÚ,2019a,p.21–22).Naturalgasisa minorfuelingas-firedpowerplantscomparedtobiogas.
Natural gas also figures significantly in heating. In 2018 18.9% of heat in the Czech Republic was produced
from natural gas, 2.6% from biogas, and 6.8% from other gases (see ERÚ, 2019b, p. 6).
Sources with more than 50 MWe include Teplárny Brno, a. s., (95 MWe) and Teplárna Trmice, a. s., (70 MWe).
5.3	 The Regulatory Framework of the Natural Gas Industry
5.3.1 The Legislation
In terms of mining, the exploitation of natural gas is guided by Act No. 89/2016 Coll., which amended Act No. 44/1988
On the Protection and Utilization of Mineral Resources (The Mining Act) and by the Czech Mining Authority, as in
the case of coal. Trade with natural gas is treated in Act No. 458/2000 Coll., on Business Conditions and Public
Administration in the energy sectors and on Amendments to Other Laws (The Energy Act).
Czech natural gas legislation has been closely linked to EU legislation since 2004. EU legislation in the gas
sector is presented mostly in the form of regulations32
and directives33
and covers all parts of the sector. The crucial
fact is that EU legislation has precedence over Czech legislation. This means the Czech Republic must transpose
EU legislation into its national legislation and abide by it. The Czech gas sector may generally be considered
properly regulated in terms of legislation. It reacts well to the legislative framework and conceptual materials and
deals appropriately with European legislation. In terms of natural gas, it is also clear that domestic and EU legislation
do not contradict each other and do not deviate from the long-term course, thus contributing to the stability
of he sector as well as to the anticipation of and preparation for further developments.
31	 This is a general advantage of gas-fired power plants (but not combined cycle power plants) which increases the importance of these
plants in terms of their contribution to the management and stability of the entire electricity network. It is during the first (gas) cycle,
where natural gas is mixed with air and sent under pressure into a turbine where it burns, that it is easy to change the output in an instant.
The second cycle is as slow as in coal-fired power plants. When a gas combined cycle power plant must be regulated in an instant,
the second cycle must be shut down.
32	A legal act of the European Union which sets out a goal i.e. requires member states to achieve a particular result but does not determine
the means of achieving that goal. A member state therefore must devise its own legislation to reach the goal.
33	A binding legal act of the European Union. It is enforceable immediately after coming into force which means that it does not have to
be transposed into national legislation.
The Natural Gas Sector94
All EU directives have been adopted in the Czech Republic and implemented in its laws. The most important
EU legislation includes Directive 94/22/EC of 30 May 1994 on the Conditions for Granting and Using Authorization
for the Prospection, Exploration and Production of Hydrocarbons, which focuses on the upstream sector.
Directive 2009/73/EC of 13 July 2009 Concerning Common Rules for the Internal Market in Natural Gas is part
of the so‑called Third Liberalization Package in gas. It creates basic rules for the establishment and functioning
of the single gas market, such as the unbundling principles, third party access to gas infrastructure, and market
opening and definition, and it increases the powers of national regulatory authorities.
After the gas crisis of 2009, the EU came up with new security of supply concepts which were introduced
into regulations in force at that time. The current valid Regulation (EU) 2017/1938 of 25 October 2017 Concerning
Measures to Safeguard the Security of the Gas Supply includes among its provisions infrastructure standards directed
at the security of supply, gas supply standards for protected customers in member states, and describes
levels of crisis. It also introduces the concept of solidarity.34
(see EUR-lex, n.d.) In addition, at the European level,
there are ‘network codes’,35
which are legal acts (regulations) that aim at harmonizing the rules across European
gas markets to facilitate market integration and create a single gas market.
5.3.2 The Energy Regulatory Office
One of the most concrete consequences of European regulation is the existence of national regulatory authorities.
In the Czech Republic, this is the Energy Regulatory Office (see chapter 5.2.4.6). The ERÚ oversees the functioning
of the energy market, with an emphasis on the implementation of legislation. In addition, the ERÚ supports
the use of alternative fuels in the energy industries and protects the interests of both consumers and licence
holders. Moreover, the ERÚ regularly issues a so-called Price Decision36
. Historically, there were vertically integrated
companies that dominated the gas and electricity sectors in Europe. The purpose of unbundling, therefore,
was to divide such vertically integrated companies into distinct companies working along a supply chain.
Nevertheless, there was gas infrastructure for gas transportation already in place and no logical reason to build
another infrastructure to enable competition. Hence, aside from implementing concrete rules such as TPA37
,
price regulation was introduced in the sectors of transmission and distribution of gas in the Czech Republic to
prevent companies from engaging in monopolistic behaviour.
5.3.3 Security of supply
On November 12, 2009, the simulation of a state of crisis took place as part of preparations for new legislation
on emergency situations. Under the simulation, it was found that gas supplies were continued to flow to all customers.
Then-Minister of Industry and Trade Vladimír Tošovský argued that “in the event of curtailment of natural
gas supplies from Russia, the Czech gas industry would be capable of handling the situation in an adequate
manner” (see Akrman, 2009). The Czech state of emergency follows Act No. 344/2012 Coll. as amended by Act
No. 215/2015 Coll., on States of Emergency in the Gas Industry.
34	Solidarity means a member state may request help from other member state(s) in the form of solidarity gas supplies to solidarity protected
customers in the requesting member state when this state is not able to supply them by itself. Solidarity is provided on the basis
of compensation. This may be seen as a direct consequence of the gas crisis in 2009. It represents the embodiment of help and cooperation
among member states in 2009 in EU legislation.
35	The Capacity Allocation Mechanism Network Code (CAM NC; Regulation (EU) 2017/459) on the capacity allocation mechanism, e.g.,
rules of auctions, capacity calculation, the standardization of offered capacity products, in gas transmission systems. The Balancing
Network Code (BAL NC; Regulation (EU) 312/2014) on gas balancing rules, nomination procedures, settlement processes etc. in
transmission networks. The Tariff Network Code (TAR NC; Regulation (EU) 2017/460) on harmonized transmission tariff structures,
which aims at creating transparent, non-discriminatory calculation of tariffs. The Interoperability and Data Exchange Network Code
(Regulation (EU) 2015/703) that focuses on an appropriate degree of harmonization in technical, operational and communication
areas which may possibly complicate or block the free flow of gas in the EU. (see ENTSOG, n.d.)
36	The ERÚ regularly issues so-called price decisions in which it sets out regulated prices for gas transmission and distribution, prices
for the market operator’s services, and the prices of supply of last resort.
37	Third-party access is a policy in which the owners of natural monopoly infrastructure (transmission system operators, operators of
storage or LNG facilities) must grant non-discriminatory access to their infrastructure. This way TPA supports competition where it
has been impossible due to the existence of a monopoly.
The Natural Gas Sector 95
The obligation (both local and supranational) to keep strategic reserves emerges from Regulation (EU)
2017/1938. Among other things, it sets out an obligation to ensure gas supply to protected customers38
in a member
state in specific cases39
. Czech Act No. 344/2012 Coll. follows Regulation (EU) 2017/1938 and includes a definition
of the protected customer category in the Czech Republic, as well as defining the calculation methodology
for the security standard traders must maintain for those of their customers that qualify as protected customers.
Regulation (EU) 2017/1938 does not specifically state that a member state must maintain strategic reserves
in underground gas storage facilities. Nevertheless, Act No. 344/2012 Coll. specifically says that the gas security
standard for protected customers shall be fulfilled by keeping at least 30 % of the security standard in underground
gas storage facilities located within the European Union. Thus there is a legal obligation to store a certain
(changeable) amount of gas in underground storage facilities.
5.4	 Demand Forecast
The Czech Republic saw a decrease in gas consumption up to 2014 and very modest growth after that point.
This could change in the near future with an expected decrease in the share of liquid and especially solid fuels
in the TPES mix, mainly due to the implementation of energy and environmental policies.
Tab. 5.7: Gross gas consumption in the Czech Republic (in mcm)
2010 2011 2012 2013 2014 2015 2016 2017
Consumption 8,989 7,585 7,638 7,738 6,887 7,222 7,816 8,022
Source: Ministerstvo průmyslu a obchodu, 2019, p. 22
Tab. 5.8: Gross gas consumption in the Czech Republic (in mcm)
6 500
7 000
7 500
8 000
8 500
9 000
9 500
20172016201520142013201220112010
mcm
Source: Ministerstvo průmyslu a obchodu, 2019, p. 22, visualisation by J. Červinková
The decrease in the share of liquid and especially solid fuels in the TPES mix will be most likely compensated
by nuclear energy, renewable resources and natural gas. Natural gas will then, according to the updated SEP,
become a more important part of the TPES mix in the Czech Republic, accounting for approximately one-fifth of
its makeup (see Aktualizovaná státní energetická koncepce, 2014, p. 44).
38	A specific category of customers under the Regulation (EU) 2017/1938. Among others, there are households and essential social services
included. Each member state defines the category itself based on the rules set in Regulation 2017/1938.
39	Specifically (a) extreme temperatures during a 7-day peak period occurring with a statistical probability of once in 20 years; (b) any period
of 30 days of exceptionally high gas demand, occurring with a statistical probability of once in 20 years; (c) for a period of 30 days in
the case of disruption of the single largest gas infrastructure under average winter conditions (Art. 6, par. 1, Regulation (EU) 2017/1938).
The Natural Gas Sector96
Tab. 5.9: The Shares of Fuels in Energy Resource Consumption in 2000 and 2017 and the Shares According to the State Energy
Policy of the Czech Republic from 2004, including the 2014 Update (in %)
Type of Fuel Level in 2000 Level in 2017 Long-Term Goal (SEP 2004) by 2030 Long-Term Goal (USEP 2014) by 2040
Solid 52.4 36.7 30–32 11–17
Gas 18.9 16.7 20–22 18–25
Liquid 18.6 21.7 11–12 14–17
Nuclear 8.9 16.3 20–22 25–33
Renewables 2.6 10.5 15–16 17–22
Source: Státní energetická koncepce, 2004, p. 11–12, 40–49; Aktualizovaná státní energetická koncepce, 2014, p. 44; Ministerstvo
průmyslu a obchodu, 2019, p. 14
The expected growth in natural gas demand is well illustrated in the of Fitch Solutions forecast (see table 5.10),
which predicts increasing consumption from real consumption of 8.5 bcm/y in 2017 and expected consumption
of 8.8 bcm in 2018 to 12.4 bcm/y in 2028 (Business Monitor International, 2019, p. 15).
Tab. 5.10: Natural Gas Demand Prediction for the Czech Republic
Year 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Consumption 8.8 9.0 9.6 10.3 10.7 11.0 11.4 11.7 12.1 12.4
Year on year % change – 2 7 7 4 3 3 3 3 3
Note: figures in bcm.
Source: Fitch Solutions, 2019, p. 15
Aside from its use for heat and electric power generation, gas will be used mainly in transport. In 2018,
there were 22,600 CNG vehicles in the Czech Republic40
with consumption of 75 mcm/y (see CNG4you, 2019).
The National Action Plan for Clean Mobility of 2015 predicts there will be 200 – 300 thousand CNG vehicles by
2030 under two scenarios41
. This means approximately 450 – 680 mcm/y of gas consumption in 2030. The scenarios
are based on the development of several aspects such as state support, taxation, infrastructure development
etc. The same document expects there will be 1361 LNG vehicles with approximately 89.4 mcm/y consumption
in 2030. (see Ministerstvo průmyslu a obchodu, 2015, p.49–51; 54).
When it comes to LPG, there are currently about 200 thousand LPG-powered vehicles in the Czech Republic
(see Ministerstvo průmyslu a obchodu, 2015, p. 23). Nevertheless, LPG in the Czech Republic is really an oil product,
since LPG production tied to natural gas extraction is basically non-existent in the country. Because of this, it is
expected that LPG production will decrease together with petrol and diesel, i.e. conventional fuels. Further development
of LPG as a fuel will thus not be supported by the state (see Ministerstvo průmyslu a obchodu, 2015, p. 45).
The draft Czech National Energy and Climate Plan submitted to the European Commission at the start of 2019
predicts that between 2026 – 2030, there will be 100 – 160 thousand CNG vehicles and 500 – 1000 LNG vehicles.
The total consumption for gas-fuelled vehicles is expected to be 509 mcm/y. (see Národní klimaticko-energetický
plán, 2018, p. 81) In 2018 there were approximately 6.6 million passenger cars, vans, and buses registered
in the Czech Republic (see SDA, 2019), meaning that CNG vehicles currently represent 0.34% of the car fleet in
the country. Thus even though the number of gas-fuelled vehicles is predicted to substantially increase compared
to current levels, CNG and LNG vehicles will probably account for no more than 5% of the car fleet by 2030.
Besides consumption for transportation purposes, reasons for increasing demand for natural gas may emerge
from the development of combined cycle and gas and combustion power plants (for currently planned projects
see chapter 5.2.6). In 2017, the share of natural gas in the TPES was 16.7 % (see Ministerstvo průmyslu a obchodu,
2019, p. 16, 22) and the Updated SEP expects that by 2040, gaseous fuels will have an 18–25 % share in the Czech
40	There are basically no LNG-fueled vehicles in the Czech Republic. In 2018 there were, according to CNG4you, only 2 such vehicles (see
CNG4you, 2019).
41	 In the National Action Plan for Clean Mobility, four scenarios are presented in total. The data used here represents the results of scenarios
1 and 1A, which are labeled optimistic and moderately optimistic. The data from the other two scenarios was not used as it assumes
the imposition of a 50 % and 100 % tax on gaseous fuels, which is unlikely considering the declared goals and ambitions of the state in
the transport sector.
The Natural Gas Sector 97
energy mix. At the same time, approximately 10.2 % of electricity was generated from gases, i.e. natural gas, biogas
and other gases (see ERÚ, 2018b, p. 8), whilst the Updated SEC has set a range of 5–15 % for gaseous fuels
for electricity generation by 2040 (see Ministerstvo průmyslu a obchodu, 2014, p. 44). This would suggest there
is still some room to increase natural gas in both the energy mix and in electricity generation. Nevertheless, it
is important to notice the term ‘gaseous fuels’ – in the end there may be an increase in biogas/biomethane and
the use of natural gas might remain stagnant or even fall. The use of natural gas in general will depend on many
variables which are hard to predict. In the Czech Republic, the development of other energy sectors42
is crucial
to the development of the gas sector. The same holds for development in renewable energy, because gas is
a highly suitable fuel to accompany power generation from intermittent renewable sources (see chapter 5.5.2).
5.5	 Current Issues and Projects in the Czech Gasworks Industry
5.5.1 The development of the Transmission System and of Cross-Border Interconnectors
Over the past decade, there have been several infrastructure projects planned and completed in the CEE region,
including in the Czech Republic. (see Osička, Lehotský, Zapletalová, Černoch & Dančák, 2018; Osička & Ocelík,
2017; Mišík & Nosko, 2017) In September 2011, the first interconnection between the Czech Republic and Poland,
called STORK, was commissioned (see NET4GAS, n.d.b.). NET4GAS, s.r.o. and the Polish transmission system operator
GAZ SSYSTEM S. A. built a high-pressure gas pipeline that connects the Ostrava region to Cieszyn County
in Poland. The pipeline is 32 km long and has a capacity of 0.5 bcm a year.
The Gazela gas pipeline project was the biggest gas pipeline project (with capacity amounting to approximately
33 bcm per year) that has had a direct impact on the Czech Republic during the last ten years. It is a direct
extension to the planned German pipeline OPAL (Ostsee Pipeline Anbindungs-Leitung), which follows the Nord
Stream project43
, bringing natural gas over the seabed from Russia’s Vyborg to Germany’s Greifswald.44
The pipeline
has a capacity of approximately 30 bcm/y and the route connects two border points, Hora Sv. Kateřiny and
Waidhaus. The Gazela pipeline, 166 km in length, was put into operation in January 2013 (see “Plynovod Gazela
startuje”, 2013). Gazela pipeline supplies natural gas to southern and south-eastern Germany. Gas pipeline connections
between former East and West Germany are markedly underdeveloped due to the separate development
of the states during the Cold War. Thanks to this interconnection, however, the Czech Republic is connected
to the so-called Northern Route. (see Jirušek, 2017, p. 207)
NET4GAS, s.r.o. currently plans two cross-border projects. The first of these will mark the first interconnection
between the Czech Republic and Austria. The Bidirectional Austrian Czech Interconnection (BACI) will be a 61 km
long (of which 12 km will cross the territory of the Czech Republic) gas pipeline that connects the Břeclav compressor
station with the Baumgarten gas hub. Planned capacity is up to 6.57 bcm/y (see European Commission,
2017). This pipeline would enable further market integration and competition between the two countries. A final
investment decision has not yet been taken (see NET4GAS, n.d.a). When built, BACI will represent competition
for the Slovak transit gas pipeline owner Eustream, a. s. (see Petříček, 2009). Since 1 October 2018, the one-year
pilot phase of the so-called Trading Region Upgrade (TRU) service has been ongoing. TRU is a special capacity
product directly connecting the Austrian and the Czech gas markets through the existing Slovak transmission
system. The Ten-Year Network Development Plan 2019–2028 states that the commissioning of BACI is to be postponed
depending on the results of the pilot-phase of TRU (see NET4GAS, 2018, p. 50).
Another planned cross-border project is the Czech-Polish Gas Interconnector (CPI), a bi-directional gas pipeline
connecting the Czech Republic and Poland. The project’s aim is to increase transmission capacity between
the neighbouring countries as well as to enable source diversification for the Czech Republic, since it will gain
access to gas from the LNG terminal in Świnoujście and the planned Baltic pipe project. The CPI consists of two
pipeline projects. The first is the STORK II pipeline connecting Libhošť in the Czech Republic with Kedzierzyn,
42	There are plans to build a new nuclear power plant. Then there is the issue of limits on coal production and the waves of decommissioning
of several coal power plants in coming years. And finally, the development of renewable energy will be a determining factor.
43	The following companies are participating in the Nord Stream AG consortium: OAO Gazprom (51%), Wintershall Holding GmbH (15.5%),
PEG Infrastruktur AG (PEGI/E.ON subsidiary; 15.5 %), N.V. Nederlandse Gasunie (9%), and ENGIE (9%).
44	Nord Stream is 1222 km long, with a capacity of 55 bcm/y, and OPAL 470 km long, with a capacity of 35 bcm/y.
The Natural Gas Sector98
Poland; the second is an intrastate pipeline called Moravia, connecting Tvrdonice and Libhošť. The pipeline is
part of the north-south connection and would play an important role in the potential growing independence of
the Czech Republic from eastern supplies. Commissioning is planned for 2022, but a final investment decision
has not yet been taken. Both BACI and STORK II are currently part of the so-called North-South interconnection in
central eastern and south-eastern Europe which is one of the priority infrastructure corridors in the EU. This gas
infrastructure is to form regional connections and to enhance the diversification and security of the gas supply
(see European Commission, n.d.b.). Historically, gas flowed almost exclusively in the east-west direction. Currently,
aside from the fact that the flow has been reversed, the so-called Northern route, consisting of Nord Stream (and
in the future Nord Stream 2) infrastructure, was created along with the Southern Gas Corridor, currently under
construction.45
Nevertheless the interconnections in the north-south direction (and the reverse) are weak and
must be created or strengthened so that these new sources of gas can be evenly distributed throughout the EU.
The so-called Capacity4Gas project has several sub-projects whose general aim is an increase in the capacity
of the Czech transmission network, thus increasing the security of gas supplies in the Czech Republic
and the Central and Eastern European region. Among other things, the new gas infrastructure includes a new
gas pipeline to connect the planned German EUGAL pipeline to the Czech transmission network, and a new
compressor station (see NET4GAS, 2018, p. 53–54). The EUGAL pipeline will be connected to Nord Stream 2 at
the Greifswald interconnection point. The Czech Republic, therefore, will be connected via a new gas pipeline
on its territory and the EUGAL to Nord Stream 2 infrastructure; and similarly to the Nord Stream system through
the Gazela and OPAL pipelines (see EUGAL, n.d.).
5.5.2 Decarbonisation of the gas sector
Natural gas has lower CO2
emissions than coal and oil, but it is still a fossil fuel and still emits harmful emissions
during burning and combustion. Thus, in the context of the energy, environmental, and climate policies and goals
of the EU, especially for 2050, there is an ongoing debate about the future role of natural gas and gases in general.
According to some, natural gas should be used as a “bridging fuel” during the transition of energy systems. As
stated above, natural gas has lower emissions than other fossil fuels. Gas power plants can be used as sources
of dispatchable power complementary to intermittent renewable sources of energy. Considering that the generation
of nuclear power plants is not easily made subject to regulation and that its future is unclear in the EU
(especially in some countries), greater use of gas power plants becomes logical with a rising share of renewable
energy in the energy mix. At the same time, unlike electricity, gas can be stored easily in existing underground
gas storage facilities. Thus, sector coupling of the electricity and gas sectors could lead to optimizing the use of
existing infrastructure as electricity cannot currently be stored cost-effectively. Technologies such as power to
gas46
could, again, provide flexibility to the electricity sector with a high share of renewable energy.
Nevertheless, opinions differ and some maintain that natural gas, as a fossil fuel, should be continually completely
phased-outandtoa certainextentreplacedbybio-gases,bio-methaneand/orhydrogenassoonaspossible(Anderson,
Broderick, 2017, p. 19, 46; ECOFYS, 2018, p. 2; Simon, 2019). These zero-emission gases could be transmitted within
the already existing infrastructure, but especially in case of hydrogen the infrastructure would have to be adapted.
None of the scenarios or projects mentioned above can be described as the one that will be indisputably implemented
in the EU or anywhere else in the world. Energy systems around the globe are undeniably in a process
of transition. The concrete characteristics of these transitions will differ and will take place at a varying pace in
different countries and regions. Also, concerned stakeholders looking out for their own interest will have varying
outlooks on energy transition and the role of (natural) gas in the transition process. It is in any event a hot topic
in the gas sector, since the outcome of the debate will decide the future of the entire sector over the long-term.
45	The Southern Gas Corridor is a new gas supply route to Europe. It will bring sources of gas from the Caspian region (and in the future
possibly also from the Middle East or Central Asia) to Southern and South-Eastern Europe. The current Southern Gas Corridor infrastructure
goes from Azerbaijan through Georgia, Turkey (TANAP pipeline), Greece, and Albania to Italy (the TAP pipeline). The whole
infrastructure should be completed and put into operation by 2020 (see TAP AG, n.d.)
46	Power to gas (also P2G) is a technology in which electricity is transformed into gaseous fuels such as methane or hydrogen. Because
storing gases is easier and more cost-effective than storing electricity, power to gas technology can be used when there is an excess
of renewable electricity from intermittent sources such as wind and solar power plants. This renewable electricity is used to create
hydrogen through electrolysis and then possibly methane through methanation. In other words, this renewable electricity is stored in
a form of gas (hydrogen or methane) that can be used later, for example during peak demand.
The Natural Gas Sector 99
5.6	 Summary
The domestic gas transmission network is owned and managed by a strong private company, which invests in
the maintenance and development of infrastructure as well as in new projects that enhance the security of natural
gas supplies to the Czech Republic. Underground storage facilities that have a capacity of more than a third
of Czech annual consumption are an important element in the security of gas supplies.
Most of the gas for the Czech Republic is provided with supplies on the basis of a long-term contract which
provides stability and guarantees to both exporters and importers. The remaining gas supplies are secured by
trading on the spot market, mainly in Germany. The geographical position of the country in providing gas transit
to other European markets is equally important. With the commissioning of the Nord Stream and the upcoming
commissioning of the Nord Stream 2 in 2019, the typical flow of gas has changed to an west-east direction.
Therefore, the transit role of the Czech Republic is preserved, and while this position does not provide the country
with any significant economic gains (although the money paid for transit goes to NET4GAS, s.r.o. and partly
flows also to the State Treasury via taxation), it does strengthen the country’s geopolitical role in Europe.
In the Czech Republic, natural gas is seen as an important resource that lowers dependence on oil as well as
the share of coal in the TPES. The gas industry is currently being supported. The Czech Republic is thus heading
towards more intensive use of natural gas while maintaining security and stability of supply. This increased
awareness of the need for security not only pertains to projects related to natural gas, but is also a general trend
in the Czech energy sector. When it comes to domestic consumption, most gas is used by industry, then by private
households and, finally, in heat and electric power generation. The potential of natural gas lies mainly in
the secondary regulation of the fuel and energy base for the coverage of fluctuations within the networks and
in relation to renewable energy; in the long-term, the transport sector is also a promising area for growth. By following
the established course, natural gas will, as part of the Czech fuel energy mix, become an even more important
energy commodity in the future with a complete range of positive properties.
The synthesis and analysis of the information noted above allows us to make the following summary of
the Czech gas industry regarding the security of gas supplies. The Czech Republic benefits from good transit diversification
of supplies. The ongoing integration of the Czech pipeline network and the planned development of
transit routes from/to resource regions in Northern (Nord Stream 1 and 2, Gazela, LNG Świnoujście) and Southern
(Baumgarten, Southern Gas Corridor infrastructure) Europe will enhance the geographical diversification of supplies.
The great capacity of reservoirs that are capable of covering as much as 37.5% of domestic gas consumption
represents an important guarantee of consumer security should a crisis related to the reduction or restriction
of supplies take place. A positive, not-insignificant impact on the security of gas supplies to the Czech Republic
comes from the fact that not only has the country closed long-term supply contracts, it has also signed long-term
agreements for transit through the Republic. The Czech Republic therefore remains an important transit country,
while natural gas producers will continue using Czech territory for transit purposes. Another contributing factor
is that the Czech Republic is a reliable, unproblematic transit country.
Long-term contracts with suppliers, however, limit liberalization efforts. If the greatest portion of natural gas
is provided to the Czech Republic on the basis of long-term contracts, intrastate liberalization and the growth of
new traders would de facto confront the fact that one and the same gas is being traded, only with more mediators
in-between. Nonetheless, there are exceptions when traders arrange their own contracts for natural gas
supplies from exporters. But the range of contracts is so insignificant that it has no significant impact on the gas
market. Liberalization is further promoted and supported by the Czech National Regulatory Authority, the Energy
Regulatory Office (ERÚ). Among other things, the ERÚ regulates transmission, distribution and gas storage fees,
grants licences, and approves legislation and documents pertaining to the gas market.
Insignificant domestic production (app. 2%) means constant dependence on natural gas imports, with all
the negative impacts that brings. If there is excessive extraction of natural gas at the expense of other energy
resources, the Czech Republic will be even more exposed to the risk of natural gas price fluctuations tied to oil.
Moreover, the risk of a potentially unbalanced energy mix and the impact of a potential curtailment of the natural
gas supply will grow. A significant level of total import dependence also means an increase in Czech sensitivity
to threats related to supply disruptions, fluctuations in energy commodity prices, and the increasing financial
costs of ensuring sufficient energy materials.
The profile of the Czech Republic as a transit gas country will increase once the numerous infrastructural interconnecting
projects with Austria (BACI project), Poland (increased connection with LNG Świnoujście via the Moravia
The Natural Gas Sector100
and Stork II pipelines) and Germany (increased connection to the Nord Stream 2 Pipeline via the EUGAL and subsequent
pipelines) will be completed. The Czech Republic will benefit from its strong geographical and geopolitical
position within Central Europe. If the sector develops in the desired direction, one may expect growing transit dependence
by other European countries on the Czech pipeline system. The result could be stronger support of Czech
gas diplomacy for exporters, primarily the Russian Federation. The Czech Republic takes an active part in solving
problems within the natural gas sector, both at the state level by providing sufficient political support for natural gas
and at the EU level by providing relatively unproblematic implementation of EU legislation in acts and regulations.
This approach has so far impacted positively on the development of the Czech gas industry. Its future development
depends on the general development of energy in the Czech Republic and on the trend toward decarbonisation
in the EU. Solving the issues in the nuclear and coal industries, as well as in renewable Czech industries, will have
a crucial impact on the use of (natural) gas in the country. Next, the use of renewable gases (that would to a certain
extent substitute for fossil gas), such as biomethane and hydrogen, could significantly alter the future development
of the gas sector, as the arguments against using fossil fuels in a decarbonized energy system would no longer hold.
5.7	 Sources
Akrman, L. (2009, November 12). Česko je připraveno na plynovou krizi. Zásobníky jsou plné a plné i zůstanou.
Hospodářské noviny. Retrieved from http://​ekonomika​.ihned​.cz​/c1​-39053530​-cesko​-je​-pripraveno​-na​
-plynovou​-krizi​-zasobniky​-jsou​-plne​-a-plne​-i-zustanou
Aktualizovaná státní energetická koncepce. (2014, December). Retrieved from https://​www​.mpo​.cz​/assets​
/dokumenty​/52826​/60155​/632395​/priloha004​.pdf
Alpiq. (n .d.). Tepelné elektrárny: Elektrárny s kombinovaným cyklem. Retrieved from http://​www​.alpiq​.cz​/nase​
-nabidka​/nase​-zarizeni​/tepelne​-elektrarny​/elektrarny​-kombinovanym​-cyklem​/elektrarna​-kladno​-I.jsp​.html
Andreson, K., Broderick, J. (2017, October 17). Natural gas and climate change. Retrieved from http://​www​
.foeeurope​.org​/sites​/default​/files​/extractive​_industries​/2017​/natural​_gas​_and​_climate​_change​_anderson​
_broderick​_october2017​.pdf
Blažek, L. (2009). Ohřejeme se v 21. století? O výstavbě a rozvoji palivo-energetické základny. Praha: FUTURA.
CNG4you. (2019). CNG info: Statistiky. Retrieved from http://​www​.cng4you​.cz​/cng​-info​/statistiky​.html
Čelákovice. (2014, May 19). Paroplynová elektrárna v Mochově se stavět nebude. Retrieved from
https://​www​.celakovice​.cz​/cs​/mesto​/zivotni​-prostredi​/paroplynova​-elektrarna​.html
Český plynárenský svaz. (n.d.). About the CGA: Activities. Retrieved from https://​www​.cgoa​.cz​/en​/cps​.predmet​
-cinnosti/en
ČEZ. (n.d.a). Provozované paroplynové elektrárny. Retrieved from https://​www​.cez​.cz​/cs​/vyroba​-elektriny​
/paroplynove​-elektrarny​/provozovane​-paroplynove​-elektrarny​.html
ČEZ. (n.d.b). Připravované projekty paroplynových elektráren ČEZ. Retrieved from https://​www​.cez​.cz​/cs​
/vyroba​-elektriny​/paroplynove​-elektrarny​/pripravovane​-projekty​-paroplynovych​-elektraren​-cez​.html
E.ON. (n.d.). E.ON v České republice. Retrieved from https://​www​.eon​.cz​/o-nas​/o-skupine​-eon​/eon​-v-ceske​
-republice​/eon​-ceska​-republika​-s-r​-o 
E15. (2013, August). Allianz a Borealis dokončily akvizici českých plynovodů Net4Gas. Retrieved from
https://​www​.e15​.cz​/byznys​/prumysl​-a-energetika​/allianz​-a-borealis​-dokoncily​-akvizici​-ceskych​-plynovodu​
-net4gas​-1011155
ECOFYS. (2018, February 15). Gas for Climate: How gas can help to achieve the Paris Agreement target in an
affordable way. Retrieved from https://​www​.gasforclimate2050​.eu​/files​/files​/Ecofys​_Gas​_for​_Climate​
_Report​_Study​_March18​.pdf
ENTSOG. (n.d.). Network Codes and Guidelines. Retrieved from https://​www​.entsog​.eu​/network​-codes​-and​
-guidelines
ERÚ. (2018a). Národní zpráva Energetického regulačního úřadu o elektroenergetice a plynárenství v České
republice za rok 2017. Retrieved from https://​www​.eru​.cz​/documents​/10540​/4561001​/NZ​_ERU​_2017​.pdf​
/1e054a01​-3d8a​-49a1​-82d5​-aab66f1e62ee
ERÚ. (2018b). Yearly report on the Operation of the Czech Gas System for 2017. Retrieved from
https://​www​.eru​.cz​/documents​/10540​/4583838​/Yearly​_report​_gas​_2017​.pdf​/2d151f61​-0f9d​-4294​-8a0a​
-05ce150087d1
The Natural Gas Sector 101
ERÚ. (2019a). Roční zpráva o provozu ES ČR 2018. Retrieved from http://​www​.eru​.cz​/documents​/10540​
/4580207​/Rocni​_zprava​_provoz​_ES​_2018​.pdf​/1420388b​-8eb6​-4424​-9ad9​-c06a57b5326c
ERÚ. (2019b). Roční zpráva o provozu teplárenských soustav ČR 2018. Retrieved from http://​www​.eru​.cz​
/documents​/10540​/4340114​/Rocni​_zprava​_provoz​_TS​_2018​.pdf​/8b80b3d6​-a354​-4a9d​-9731​-6bed019adcca
ERÚ. (n.d.). About ERO. Retrieved from https://​www​.eru​.cz​/en​/o-uradu
EUGAL. (n.d.). Background: Natural Gas Receiving Station. Retrieved from https://​www​.eugal​.de​/en​
/background​/natural​-gas​-receiving​-station/
EUR-lex. (n.d.). Retrieved from https://​eur​-lex​.europa​.eu​/homepage​.html
euro. (2018). Gazprom nahrazuje... Gazprom. Wingas zintenzivní činnost v Česku. Retrieved from https://​www​
.euro​.cz​/byznys​/gazprom​-nahrazuje​-gazprom​-1389178​#utm​_medium​=​selfpromo​&​utm​_source​=​euro​&​utm​
_campaign​=​copylink
European Commission. (2017). Energy: Projects of common interest – Interactive map. Retrieved from
http://​ec​.europa​.eu​/energy​/infrastructure​/transparency​_platform​/map​-viewer​/main​.html
European Commission. (n.d.a). Energy: Market legislation: Unbundling. Retrieved from https://​ec​.europa​.eu​
/energy​/en​/topics​/markets​-and​-consumers​/market​-legislation
European Commission. (n.d.b.). Energy: Topics: Trans-European Networks for Energy. Retrieved from
https://​ec​.europa​.eu​/energy​/en​/topics​/infrastructure​/trans​-european​-networks​-energy
Fitch Solutions. (2019). Czech Republic Oil & Gas Report Q2 2019.
Gama Investment. (n.d.). O nás. Retrieved from http://​www​.gamainvestment​.cz​/o-nas
GasNet. (n.d.). O společnosti. Retrieved from https://​www​.gasnet​.cz​/cs​/o-spolecnosti/
Gazprom Export. (2016). Dambořice Underground Gas Storage Is Put into Operation. Retrieved from
http://​www​.gazpromexport​.ru​/en​/presscenter​/news​/1849/
Gazprom. (n.d.a). Projects: Nord Stream 2. Retrieved from http://​www​.gazprom​.com​/projects​/nord​-stream2/
Holzer, J., Jirušek, M., & Kuchyňková, P. (2020). Russia as Viewed by the Main Czech Political Actors. In: Holzer,
J., & Mareš, M. Czech Security Dilemma. Russia as a Friend or Enemy? Cham: Palgrave Macmillan, p. 55-89.
ISBN 978-3-030-20546-1. https://​doi​.org​/10​.1007​/978​-3-030​-20546​-1_3
innogy. (2016). Skupina RWE se v ČR přejmenuje na innogy. Retrieved from https://​www​.innogy​.cz​/o-innogy​
/tiskove​-zpravy​-skupina​-rwe​-se​-v-cr​-prejmenuje​-na​-innogy/
innogy Gas Storage. (n.d.). O nás: Naše zásobníky. https://​www​.innogy​-gasstorage​.cz​/cs​/mapa​-zasobniku/
Jirušek, M. (2017). Politicization in the natural gas sector in South-Eastern Europe: thing of the past or vivid
present? Brno: Masaryk University. ISBN 978-80-210-8881-8
Jirušek, M., & Kuchyňková, P. (2018). The Conduct of Gazprom in Central and Eastern Europe: A Tool of
the Kremlin, or Just an Adaptable Player? East European Politics and Societies, vol. 32, no. 4, p. 818-844.
https://​doi​.org​/10​.1177​/0888325417745128
Kastl, J. (2008). Zemní plyn - zajištění bezpečnosti a spolehlivosti dodávek. Prosperita, 10(1), p. 25. Retrieved
from http://​www​.prosperita​.info​/dwn​/casopis​/2008​-01​_issue​.pdf
Koďousková, H., Kuchyňková, P., Leshchenko, A., & Jirušek, M. (2014). Energetická bezpečnost asijských zemí
a Ruské federace. Brno: Masarykova univerzita. ISBN 978-80-210-6679-3. https://​doi​.org​/10​.5817​/CZ​.MUNI​
.M210​-6679​-2014
Kysilka, H. (2007). Plyn, strategické partnerství prověřené desetiletími. Pro-Energy magazín, 2007(3), pp. 22-28.
Retrieved from http://​pro​-energy​.cz​/clanky3​/2.pdf
Mejstřík, M., & Marková, K. (2010). Zajištěni energetické bezpečnosti v oblasti dodávek zemního plynu.
Přednáška v rámci cyklu Ekonomická bezpečnost ČR Vysoká škola ekonomická v Praze.
Ministerstvo průmyslu a obchodu. (2010). Zpráva o bezpečnosti dodávek zemního plynu za rok 2009. Retrieved
from https://​www​.mpo​.cz​/cz​/energetika​/plynarenstvi​-a-kapalna​-paliva​/zprava​-o-bezpecnosti​-dodavek​
-zemniho​-plynu​-za​-rok​-2009​--76941/
Ministerstvo průmyslu a obchodu. (2015). Národní akční plán čisté mobility. Retrieved from
https://​www​.mpo​.cz​/assets​/dokumenty​/54377​/62106​/640972​/priloha001​.pdf
Ministerstvo průmyslu a obchodu. (2019). Státní energetická bilance ČR. Retrieved from https://​www​.mpo​.cz​
/cz​/energetika​/statistika​/energeticke​-bilance​/souhrnna​-energeticka​-bilance​-statu​-v-metodice​-eurostatu​-za​
-leta​-2010​-2017​--243586/
The Natural Gas Sector102
Ministerstvo životního prostředí / Česká geologická služba. (2018). Surovinové zdroje České republiky:
Nerostné suroviny 2018. Retrieved from http://​www​.geology​.cz​/extranet​/publikace​/online​/surovinove​
-zdroje​/surovinove​-zdroje​-ceske​-republiky​-2018​.pdf
Mišík, M., & Nosko, A. (2017). The Eastring Gas Pipeline in the Context of the Central and Eastern European
Gas Supply Challenge. Nature Energy, 2, p. 844–848. https://​doi​.org​/10​.1038​/s41560​-017​-0019​-6
MND, a.s. (2017). Výroční zpráva 2017 (konsolidovaná). Retrieved from http://​www​.mnd​.eu​/wp​-content​/uploads​
/2018​/05​/2017​.pdf
Národní klimaticko-energetický plán. (2018). Retrieved from https://​ec​.europa​.eu​/energy​/en​/topics​/energy​
-strategy​-and​-energy​-union​/governance​-energy​-union​/national​-energy​-climate​-plans
NET4GAS. (2018). Desetiletý plan rozvoje přepravní soustavy v České republice 2019 – 2028. Retrieved from
https://​www​.net4gas​.cz​/cz​/projekty​/rozvojove​-plany/
NET4GAS. (2019). Konsolidovaná výroční zpráva skupiny NET4GAS za rok 2018. Retrieved from
https://​www​.net4gas​.cz​/files​/hospodarske​-vysledky​/n4g​_vyrocni​_zprava​_2018​.pdf
NET4GAS. (n.d.a). Projects: Bidirectional Austrian-Czech Interconnection (BACI). Retrieved from
https://​www​.net4gas​.cz​/en​/projects​/austrian​-czech​-interconnection/
NET4GAS. (n.d.b). Projects: EEPR projects: Czech-Polish interconnector („STORK“). Retrieved from
https://​www​.net4gas​.cz​/en​/projects​/eepr​-projects​/czech​-polish​-interconnector​-stork/
Osička, J., & Ocelík, P. (2017). Natural gas infrastructure and supply patterns in Eastern Europe: Trends and
policies. Energy Sources, Part B: Economics, Planning, and Policy, vol. 12, issue 4, p. 1-7. https://​doi​.org​/10​
.1080​/15567249​.2015​.1136971
Osička, J., Lehotský, L., Zapletalová, V., Černoch, F., & Dančák, B. (2018) Natural gas market integration in
the Visegrad 4 region: An example to follow or to avoid? Energy Policy 112, p. 184-197. https://​doi​.org​/10​.1016​
/j.enpol​.2017​.10​.018
OTE. (2018). Zpráva o očekávané dlouhodobé rovnováze mezi nabídkou a poptávkou elektřiny a plynu.
Retrieved from https://​www​.ote​-cr​.cz​/cs​/o-spolecnosti​/soubory​-vyrocni​-zprava​-ote​/zoor​_2018​.pdf
OTE. (n.d.). About OTE. Retrieved from https://​www​.ote​-cr​.cz​/en​/about​-ote​/main​-reading​-1?set​_language=en
Plynovod Gazela startuje, posílí energetickou bezpečnost země. (2013, January 14). ČT 24. Retrieved from
https://​ct24​.ceskatelevize​.cz​/ekonomika​/1123773​-plynovod​-gazela​-startuje​-posili​-energetickou​-bezpecnost​
-zeme
PPD. (n.d.). O společnosti: Pražská plynárenská Distribuce, a.s. Retrieved from http://​www​.ppdistribuce​.cz​
/o-spolecnosti
Pražská plynárenská. (2014). Pražská plynárenská má nové vedení. Retrieved from https://​app​.ppas​.cz​/tiskove​
-zpravy​/prazska​-plynarenska​-ma​-nove​-vedeni
Reuters. (2012, September 13). Nord Stream to open second line in October. Retrieved from https://​
www​.reuters​.com​/article​/energy​-gas​-pipelines​/nord​-stream​-to​-open​-second​-line​-in​-october​
-idUSL5E8KDI9N20120913
RWE AG. (2018) RWE clears important competition hurdles. Retrieved from https://​news​.rwe​.com​/en​/rwe​
-clears​-important​-competition​-hurdles/
SDA. (2019). Statistiky: Přehled stavu vozového parku. Retrieved from http://​portal​.sda​-cia​.cz​/stat​.php​?v#str​
=vpp
Simon, F. (2019, February 15). Gas must be „completely“ decarbonised by 2050, says UK think-tank.
EURACTIV.com. Retrieved from https://​www​.euractiv​.com​/section​/energy​/news​/gas​-must​-be​-completely​
-decarbonised​-by​-2050​-says​-uk​-think​-tank/
Sokolovský deník. (2018, December 21). Nová turbína je unikátem, zvýší výkon elektrárny. Retrieved from
https://​sokolovsky​.denik​.cz​/zpravy​_region​/nova​-turbina​-je​-unikatem​-zvysi​-vykon​-elektrarny​-20181220​.html
Sokolovská uhelná. (2018, March 19). Aktuální informace: Ve Vřesové se budou tlakově zplyňovat kaly.
Retrieved from https://​www​.suas​.cz​/index​.php​/10​-suas​/aktuality​/885​-ve​-vresove​-se​-budou​-tlakove​
-zplynovat​-kaly
SPP Storage. (2016). Projekty. Retrieved from http://​www​.sppstorage​.cz​/pzp​-dolni​-bojanovice​/projekty
SPP Storage. (2019). Provozní data PZP: Základní technické parametry. Retrieved from
http://​www​.sppstorage​.cz​/provozni​-data​/denni​-data​.aspx​?datum​=​25​.09​.2018
Státní energetická koncepce. (2004). Retrieved from https://​www​.mpo​.cz​/dokument5903​.html
Strašíková, L. (2009, January 9). Norský plyn má Česko od roku 1997. ČT24. Retrieved from http://​www​.ct24​.cz/
The Natural Gas Sector 103
TAP AG. (n.d.). The pipeline: TAP project schedule. Retrieved from https://​www​.tap​-ag​.com​/the​-pipeline​
/project​-timeline
Theisen, Nolan. (2014, November). Natural Gas Pricing in the EU: From oil-indexation to a hybrid pricing
system. REKK. Retrieved from https://​rekk​.hu​/downloads​/projects​/2014​_rekk​_natural​%20gas​%20pricing​
.pdf
Zákon č. 458/2000 Sb. (2019). Retrieved from https://​www​.zakonyprolidi​.cz​/cs​/2000​-458
Zákon č. 89/2016 Sb. (2017). Retrieved from https://​www​.zakonyprolidi​.cz​/cs​/2016​-89
The Nuclear Sector104
Chapter 6: The Nuclear Sector
Tomáš Vlček, Tereza Stašáková
6.1	 Nuclear Power Plants in the Czech Republic
After coal, nuclear energy is the second most important source of energy in the Czech Republic, generating
base‑load electricity. The annual production of nuclear power plants has been around 28–31 TWh since 2016,
covering one-third of the country’s total electricity production of 87 TWh. Nuclear energy also serves as an important
emission-free form of energy and accounts for 80% of Czech emission-free electricity production.
There are two nuclear power plants in the Czech Republic, with a total of six pressurized reactors cooled
and moderated by light water. The Dukovany nuclear power plant is located in the Vysočina region, with four
VVER1
‑440 (V-213 type) pressurized water reactors. It first provided electricity in May 1985. The Temelín nuclear
power plant is located in Southern Bohemia and has a pair of VVER-1000 (V-320 type) pressurized reactors. It
was completed in December 2002. Both plants are owned by ČEZ, a. s. Both have undergone modernisation to
increase their installed capacity, lifetime, and to heighten safety measures.
Tab. 6.1: Review of ČEZ, a. s. Nuclear Power Plants as of December 31, 2012
Locality Blocks
marked as
Installed
capacity
(MWe)
Type of
reactor
Total installed
capacity
(MWe)
Total installed
capacity
(MWt)
Start up Distribution
company
Voltage
(kV)
Distribution
point
Dukovany
Nuclear
Power Plant
1 510* VVER 440,
V 213 type
2,040 5,776 1985 – 1988 ČEPS 400 Slavětice
2 510 VVER 440,
V 213 type
3 510 VVER 440,
V 213 type
4 510 VVER 440,
V 213 type
Temelín
Nuclear
Power Plant
1 1,082** VVER 1000,
V320 type
2,164 6,240 2000–2002 ČEPS 400 Kočín
2 1,082** VVER 1000,
V320 type
* In May, 2012, all units at the Dukovany power plant were modernized, boosting its installed capacity from 4 × 440 MWe to 4 × 510 MWe.
**In 2013, the Temelín power plant underwent modernization that placed its capacity at the 2 × 1,055 level. Since September 2014,
the first block’s capacity has been increased to 1,078 MWe. A further modernisation was undertaken in 2018, when installed capacity
was increased to 1,082 MWe depending on circumstances (such as, for example, the temperature of the cooling water). Another capacity
increase is planned for 2020.
Source: Energetický regulační úřad, 2010b, p. 89; revised and modified by T. Vlček.
1		 VVER means water cooled, water moderated energy reactor (or water – water energy reactor), in Russian Vodo-Vodyanoi
Energetichesky Reaktor.
The Nuclear Sector 105
6.2	 Deposits, Mine Production, Companies and Traders
Uranium mining has a long history in the Czech Republic. Until April 27, 2017, it was one of the last European countries
to mine uranium. All seven registered deposits are now closed, with the Rožná Deposit being the last to go.
The only company engaged in uranium mining was DIAMO, s. p. (a state enterprise2
, until May 1, 1992, known as
the Czechoslovakian Uranium Industry, State Enterprise).
DIAMO was founded in 1946, and was under the full control of the Ministry of Industry and Trade of the Czech
Republic. Now that mining has come to a close, DIAMO offers other services connected to mining, specifically,
remediation work, neutralization of the consequences and impact of mining and the processing of uranium
ores, base metals and coal, and the technical and biological recultivation of devastated properties after decommissioning
(see DIAMO, s. p.).
The Czech Republic was formerly one of the leading world producers of uranium. Between 1946 and 2009,
its production of almost 111,000 tonnes of uranium in the form of sorted ores and chemical concentrates made it
the 9th largest producer in the world. Without doubt the dominant source of uranium was the Rožná deposit in
Dolní Rožínka. The Rožná mine was supposed to be shut down in the mid-1990s, when uranium sales experienced
a crisis when a previously significant customer, Slovenský energetický podnik, š. p. (later Slovenské elektrárne
a. s.), refused to purchase Czech uranium and started obtaining enriched nuclear fuel directly. Governmental
Decrees from 1994, 1997, 2000, 2002, 2005 and 2007 gradually prolonged the mining period in Dolní Rožínka, while
with Decree No. 1086 on December 22, 2014, the government extended the mining and processing of uranium in
the deposit for as long as it was economically efficient3
, and the termination of mining was pegged to the results
of a profitability assessment4
. After its closure, there are still around 112,000 tons of un-extracted uranium, mostly
in Liberecký region and Vysočina region. But most likely uranium mining will not be renewed, because it is not
currently economical. The contemporary global uranium market is large enough to cover demand. The Czech
contribution to global production was minimal, decreasing from 1.3% in 2003 to 0.1% in 2017.
Tab. 6.2: Deposits, reserves, and mine production of uranium in the Czech Republic
2011 2012 2013 2014 2015 2016 2017
Deposits – total number 7 7 7 7 7 7 5
– exploited 1 1 1 1 1 1 1
Total mineral reserves 135,276 135,214 135,144 135,071 135,037 135,015 134,948
– economic explored reserves 1,406 1,323 1,327 1,321 1,330 1,337 1,300
– economic prospected reserves 19,402 19,458 19,427 19,463 19,448 19,448 19,448
– potentially economic reserves 114,468 114,433 114,391 114,287 114,259 114,230 114,200
– exploitable (recoverable) res. 338 312 284 314 308 313 276
Mine production 252 222 232 165 134 128 56
Production of concentrate 216 219 206 146 122 137 59
Note: reserves, mining and the production of uranium concentrate expressed in tonnes; the production of uranium concentrate resulting
from remediation works is not included in these values.
Source: Ministerstvo životního prostředí / Česká geologická služba – Geofond, 2012, p. 102; Ministerstvo životního prostředí / Česká
geologická služba – Geofond, 2018, p. 172.
The processing of uranium ore consists of several steps. First it must be cleansed of waste rock (clean uranium
in the Czech Republic accounted for an average of 0.16% of uranium ore5
). The cleaned ore is then grounded
and, following chemical treatment with sulphuric acid, processed into uranium concentrate – triuranium octoxide
2	 The term DIAMO is an abbreviation for ammonium diuranate, in Czech Diuranát amonný.
3	 According to its methodology, the International Agency for Atomic Energy considers economically efficient such mining as does not
exceed a cost of 130 USD per to mine 1 kg of uranium.
4	 DIAMO, s. p., carries out a mining profitability assessment every half year, and when it reaches negative figures, activity will be immediately
terminated. Mining can be ended in several months on a regular basis, while remediation can, however, last for decades.
5	 In the mid-19th
century, when uranium mining was first initiated, uranium ores consisted of 65% uranium (see Majer, 2004, p. 183).
The Nuclear Sector106
U3
O8
(or yellow cake6
). DIAMO’s intermediate product was purchased by ČEZ, which was one of DIAMO’s exclusive
users of uranium concentrate. Domestic production, however, did not satisfy ČEZ’s demand, and so the company
either bought additional supplies on the world market or directly purchased enriched fuel.
At the start of 2000, domestic mining covered approximately 93% of domestic demand. However, as a result of
the inhibition program, only around a third of consumption was provided by DIAMO until 2009, with the remaining
supplies bought on the global market in the form of a concentrate of previously enriched fuel (see Ministerstvo
životního prostředí / Česká geologická služba – Geofond, 2010, p. 200). Since the end of 2009, when the Russian
company OAO TVEL began supplying fuel for both the Dukovany and Temelín nuclear power plants, ČEZ has purchased
only the final product, enriched fuel, while DIAMO has sold its domestic production on the global market.
Tab. 6.3: Uranium Futures Price of Uranium Concentrate (U3
O8
)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
113,41 96,63 140,84 115,32 94,25 77,63 79,65 76,32 48,70 53,35 61,75
Note: Values always as of January of the particular year. Data indicated in USD per kilograms.
Source: indexmundi.com, tradingeconomics.com, calculated by T. Stašáková.
When ČEZ began to make exclusive use of purchased concentrate following the shift to uranium hexafluoride
UF6
, it had to seek out processing plants on the global market that could perform enrichment services. These can
be obtained in only nine countries in the world7
, and ČEZ bought from France. Enrichment plants are capable of
enriching supplied uranium hexafluoride according to the client’s requirements. Uranium has a constant ratio of
isotopes: 99.284% 238
U, 0.711% 235
U, and 0.005% 234
U. However, it is isotope 235
U that is employed in fission reactions
and used in the nuclear industry. Enrichment is a process during which uranium gets a greater concentration
of the 235
U isotope at the expense of 238
U, varying, for Czech civilian nuclear needs, between 3.6 and 4.4%.8
From the point of mining through to enrichment, the volume of exploitable uranium rapidly declines in this manner.
For initial processing, only 0.16% of mined material is employable, while during the enrichment process at
the level of approximately 4% 235
U, the volume of material lessens eight to eight-and-a-half times. In the case of
uranium this is nevertheless an enormous energy density, since 1 kg of nuclear fuel generates 2,100 GJ of energy
compared to 0.033 GJ for coal9
(see “Fyzikální aspekty,” 2008, p. 24).
Enrichment is followed by fabrication, where fuel gets processed into pellets (roughly 1 cm in diameter and
height) which are then fitted into fuel rods10
, a specific number of which are then placed into fuel assemblies
(segments, cassettes11
). In the active zone of each reactor in the Dukovany nuclear power plant, there are 312 fuel
assemblies, each weighing 215 kg and consisting of 137 kg UO2
in 126 fuel rods, while the Temelín nuclear power
plant has 163 fuel assemblies (cassettes) in each reactor, each weighing 766 kg and consisting of 563 kg UO2
in
312 fuel rods (each rod consists of approximately 370 pellets). In the active zone of one unit of the Dukovany nuclear
power plant, there is, therefore, 42.7 tonnes of UO2
fuel, and 91.8 tonnes in one unit of the Temelín nuclear
power plant. The fuel made in this manner is then supplied to the client, ČEZ.
6	 Yellow cake does not always have a consistent chemical formula U3
O8
or yellow colour. It got its name from the appearance of uranium
concentrate in the early mining and production period. Yellow cake now tends to be brown or black, but U3
O8
, for example, has an olive-green
colour. The chemical formula of yellow cake can take forms such as: U3
O8
, UO2
, UO3
, (NH4
)2
U2
O7
× n H2
O or Na2
U2
O7
× 6 H2
O.
Yellow cake is transported in blue barrels.
7		 Sorted by capacity, the order is: Russia, the USA, France, Canada, the Great Kingdom, China, Iran, Brasil and Argentina. But in all
12 countries are internationally recognized by the nuclear industry as holders of uranium enrichment facilities with different industrial
production capacities, adding Pakistan, Netherlands and Germany (see INB 2018; WNFF 2018).
8	 The Dukovany plant has always used fuel supplied by the Russian company OAO TVEL, which went through major developmental
changes. Initial fuel with 3.6% 235
U enrichment was employed in a three-year cycle, with an average calorific value of 30 MWd/kg U.
A gradual improvement brought the plant to the zone of low neutron spillage and 3.8% 235
U enrichment. In the further phase, enrichment
was lifted on 4.25 resp. 4.38% 235
U, while a burning absorber started to be used in the fuel cassettes (see ČEZ, a. s., 2010b, p. 31)
lowering fuel reactivity.
9	 Calculated by T. Vlček.
10	 The length of a fuel rod for the VVER 440 reactor is 242 cm.
11	 Cassette is a Russian term for a fuel assembly.
The Nuclear Sector 107
The long-term permanent fuel supplier for the Dukovany plant is the Russian company OAO TVEL, which fabricates
the fuel and also provides a comprehensive array of conversion and enrichment services under contract
(ČEZ, a. s., n. d.). From 2002, when the plant was launched, to the end of 2009, fuel for the Temelín nuclear power
plant was supplied by Westinghouse Electric Company, LLC12
. In 2010, the selection process for a new supplier
was won by the Russian company OAO TVEL, which submitted the best offer from a financial standpoint.
The result is that until 2023, OAO TVEL will be the exclusive fuel supplier for both Czech nuclear power plants.
Despite the contract, there have been changes to the fuel supplied as ongoing research brings some innovations
to the field. Since 2018, OAO TVEL has supplied Czech nuclear power plants with a new type of fuel (Gd2M+)
said to be more mechanically resistant and which allows for longer fuel-campaigns, since enrichment levels are
slightly higher and the overall amount of uranium is also increased. Also, six new fuel assemblies (LTA – Lead
Test Assemblies) from Westinghouse Electric Sweden have been in testing at Temelín NPP since March 2019 as
a preparatory step for testing compatibility with the potential supplier before signing a new contract. Licensing
this new type of fuel took Westinghouse three years (see ČTK, 2019).
Fuel was formerly delivered to the Czech Republic by air from the USA or Russia13
; at present, it is also transported
by air from the Russian Federation and then by railway to the target power plants14
.
6.3	 Spent Fuel and the Nuclear Waste Repository
Fission chain reaction transmutes the uranium isotope 235
U. Spent fuel contains approximately a quarter of
the original value of that isotope, which means that it remains enriched at a level of around 1% 235
U. Spent fuel
consists of around 95% of uranium dioxide (UO2
) and of newly emerged ingredients of plutonium oxide (PuO2
)
amounting to approximately 1%, along with other compounds (4%)15
, whereas the majority of fission products
are highly radioactive isotopes (see Laciok, Marková & Vokál, 2000, p. 190; Otčenášek, 2005, p. 536, adjusted by
T. Vlček). Fuel assemblies with spent nuclear fuel that are removed from reactors look like fuel assemblies with
fresh fuel. Nuclear reactions take place even after the fuel is discharged from the reactor, as well as the release
of alpha, beta and gamma radiation, neutrons, and heat, which must be exhausted out in a controlled manner.
The Dukovany nuclear power plant initiated operation on the basis of a three-year fuel cycle. The increase
of 235
U’s share in cassettes enabled it to reach a full five-year cycle (with a six-year cycle under consideration).
Currently, this means that during the annual refuelling, only 1/5 of the spent fuel is replaced out of the overall
charge, i.e. 72 fuel assemblies (see ČEZ, a. s., 2010a, p. 31).
The active zone at the Temelín nuclear power plant includes 163 fuel assemblies, while the plant’s operation
is set on a four-year fuel cycle, meaning a quarter of the spent fuel is replaced each year, i.e. 41–42 fuel cassettes
(see ČEZ, a. s., n.d.a).
After removal from the reactor, three phases of fuel deposition follow. The first phase includes the collection
of spent fuel after its removal from the primary circuit and subsequent cooling until it reaches treatable form.
The second phase includes safe transport to the location of final waste deposition. The third phase, deposition,
is understood as the final operation, which is why the depository needs impenetrable protection shields (see
Marek, 2007, p. 4).
In the first phase, fuel elements are actively cooled in a spent fuel pool next to the reactor. After a minimum five
years, they are moved into dry containers and then passively cooled in interim storage. After being removed from
the reactor, the thermal capacity of spent nuclear fuel in the Dukovany plant is 223.5 kW and then drops to 1 kW
over the course of only one year (see Nachmilner, 2002, p. 12). The Dukovany power plant uses CASTOR 440/8416
12	 Temelín NPP experienced massive malfunctioning related to the geometric stability of this fuel, which eventually led to the premature
unloading of all of Westinghouse's fuel assemblies despite financial losses, and replacement with TVEL fuel. Problems with fuel also
occurred in Ukraine to a lesser extent, but still enough to cause a lengthy unscheduled outage at two of the units, which eventually led
to technological adjustments to the fuel and consequent relabeling to Robust (TVS-RW). (see Vlček 2016, p. 81)
13	 In the 1990s, transport by sea via the Polish port Gdańsk (from Russia) and then by railway to the final destination was also considered.
14	 In Dukovany’s case, for example, a cargo plane lands at Brno Tuřany International Airport, goes through the requisite customs and technical
inspections and is then loaded onto the wagon for transport to the power plant under police escort.
15	 Exact numbers depend on the level of original fuel enrichment.
16	 Or modernized Castor 440/84M.
The Nuclear Sector108
containers, which were formerly supplied by the German Consortium GNS Gesellschaft für Nuklear‑Service mbH
and RWE Nukem GmbH,17
but are now supplied by Škoda JS. A simple calculation based on this data leads to
the conclusion that the Dukovany power plant produces less than a container of spent fuel per year. An empty
container weights 93.7 tonnes and 116.1 tonnes when filled.
There are two interim storage facilities for spent fuel at the site of Dukovany nuclear power plant. The total capacity
of the original Dukovany storage, opened in 1995, amounts to 600 tonnes of spent fuel stored in 60 CASTOR
440/84 containers. In 2006, once this storage capacity had been completely used, new storage was set up with
a capacity of 1,340 tonnes of spent fuel. In comparison to the first storage facility, the newer facility contains approximately
twice the capacity. The storage portion of the facility can receive 133 CASTOR 440/84M containers,
allowing the Dukovany plant to store spent fuel for 50 to 60 years, that is, for a period exceeding the lifespan of
the power plant itself18
(see ČEZ, a. s., n.d.d; Marková, 1996, p. 626–627).
The Temelín nuclear power plant uses CASTOR 1000/19 containers from the original German supplier and from
Škoda JS19
. These are 5.5 metres tall and when filled weigh approximately 116 tonnes. The Temelín power plant
produces two full containers and 3–4 fuel assemblies of the third container of spent fuel per year. In 2010, a new
interim storage facility was opened with a capacity of 1,370 tonnes (152 CASTOR 1000/19 containers).20
The capacity
of a dark wet pool for spent fuel is 680 fuel assembly places and 25 places for hermetic cases. Spent fuel
may thus be stored in the pool for around ten years, which is why interim storage did not prove necessary before
2010. The Skalka facility for the central dry storage of nuclear fuel in the vicinity of Bystřice nad Pernštejnem was
built as backup storage, with an overall capacity of approximately 2,900 tonnes of fuel.
The second phase, transportation, is currently by rail and is subject to very strict monitoring by the State Office
for Nuclear Safety. It is likely that spent fuel will also be transported by rail for a few decades if deposited in deep
geological repositories. This, however, cannot be claimed with certainty because it will depend on available technologies
as well as the locality and access to the future deep geological repository. Fuel is stored in dry interim
storage for a period of approximately 80 years. The final deep geological repository (third phase) in the Czech
Republic will not be available before 2065.
There are three surface repositories in the Czech Republic: the Richard Radioactive Waste Repositories near
Litoměřice, Bratrství near Jáchymov, Dukovany, and one closed repository, Hostim near Beroun21
. These repositories
store institutional radioactive waste that comes from medical, industrial, agricultural and research activities
and is therefore composed of waste containing natural radionuclides and low-activity radioactive waste from
nuclear power plants. One deep geological repository is planned as well.
In 1990–2005, the SÚRAO (Radioactive Waste Repository Authority)22
originally selected 27 potential localities
for building a deep geological repository of radioactive waste. It narrowed them down to 13, then to 11, and
finally to the current 9: Březový potok near Pačejovo, Čertovka near Lubence, Horka near Budišov, Hrádek near
Rohozná, Čihadlo near Lodhéřov, Magdalena near Božejovice, Kraví hora near Moravské Pavlovice, Janoch near
Temelín, and Na Skalním near Dukovany.
But construction has lagged behind schedule. The original plan consisted of four phases: starting with a basic
land survey and research phase from 2010–15, a second exploratory phase from 2015–25, and a third detailed exploratory
phase from 2025–50. After postponements, four candidate localities were to be chosen in 2018; one is
17	 Spent nuclear fuel from the Dukovany nuclear power plant used to be transported to an interim storage site at the Jaslovské Bohunice
nuclear power plant in Slovakia. From this location, it was meant to be used up gradually on the basis of an interstate agreement with
the Soviet Union. Following the demise of the Soviet Union, the Russian Federation, however, withdrew from these commitments. After
1993, nuclear fuel from Dukovany was brought back to the country and placed in interim storage at the Dukovany plant.
18	 The present power plant was licensed only until 2025. The first unit received a prolongation for 10 years and the second unit for an indefinite
duration, conditioned upon the submission of regular reports. But Dukovany´s shutdown is expected by 2045 at the latest.
19	 CASTOR 440/84 and CASTOR 1000/19 containers are presently produced in the Czech Republic as well. Their licensed producer is
Škoda JS, a. s.
20	In addition to the Dukovany and Temelín power plants, another high-activity radioactive waste repository is operated by ÚJV Řež, a. s.,
where there are two research nuclear reactors in operation (LVR-15 and LR-0). The capacity of the high-activity radioactive waste repository
in Řež is substantially lower, as the ÚJV produces only about 15 spent fuel segments per year. In 2007, all waste was transported
to the Russian Federation, so this repository is currently empty.
21	 The repository was closed in 1997 and has been monitored since.
22	Due to the transience of private companies, the final radioactive waste repository is not ČEZ’s but the state’s responsibility under Decree
No. 263/2016 (the Atomic Law).
The Nuclear Sector 109
to be selected by 2025 as the new location for the repository, with a second chosen as a backup (MPO 2018). But
at the end of 2018, the decision was postponed once again and, according to SÚRAO, will be decided in the first
half of 2020. After obtaining adequate data to prove the safety of locality finally chosen, submission of the application
for a construction permit for a deep geological repository will follow, with construction to take place
in 2050–65 (see Správa uložišť radioaktivních odpadů, n.d.). When this period has ended, it will also be decided
whether to process spent fuel from nuclear power plants and to use it as energy material for the production of
new fuel, or if it is to be permanently stored in a deep geological repository.23
But the process has so far been
delayed, particularly when it comes to shortlisting potential locations.
Obstacles for the deep repository are several. First, the localities chosen are close to populated areas, which
means 53 municipalities involved in the discussion of the deep nuclear repository. None of them is willing to
accept the repository. Quite the contrary: most have started movements24
against it or organized protests (see
Ocelík et al. 2017). One of the main arguments is that the government does not provide enough information or
guarantees. It is also seen as a danger to the local environment. Second, there is a criticism towards procedure
of the State and the SÚRAO25
. Third, the political situation is unfavorable. The issue incurs into the discussion of
constructing a new nuclear power plant in the Czech Republic and, most importantly, its financing. Finally, there
is the economic side of the repository. Plans call for construction to cost CZK 36.7 billion. Together with operating
costs and containments, the price tag will reach CZK 111.4 billion26
(see MPO 2017, p. 42), while the very future
of nuclear energy, especially in Europe, remains uncertain.
Processing of nuclear waste is currently technically, energetically, and financially a costly process, one few
countries27
can afford, but the technology and initial costs could change over the next 50 years to bring it within
broader reach. A deep geological repository is meant to be a final repository of spent nuclear fuel. It is questionable
whether it should be technologically implemented so as make it impossible for already deposited waste to
ever be picked up again or to enable deposited waste to be extracted and processed in the distant future. Even
though experts incline to the second alternative, because spent nuclear fuel represents a valuable material that
can be used as fresh fuel after being processed or even as fresh fuel without previous processing28
, the economic
reality is in favour of the first alternative. The most expensive feature of a repository is its operation, which
makes it economically infeasible to keep a repository open for decades. This means it is better to store spent fuel
on a long-term basis in interim storage facilities and only when so decided, to deposit high-activity radioactive
waste at once, and to do so finally (opening the storage facility and using it again would be impossible). A deep
geological repository is constructed under the assumption it will work for the next hundred years.
So far there is only deep geological repository of spent fuel under construction in the world. That pioneer
project is in Finland, where the first waste management program was initiated in 1983. In 1987, the final disposal
of used nuclear fuel was included in the Nuclear Energy Act. Final disposal is managed by Posiva Oy. Following
the Government’s 1983 policy decision on used nuclear fuel, site selection and environmental impact assessment
work was carried out. And four locations were chosen and investigated by Posiva Oy (see WNA 2019). The government
approved the project in 2000 and it was ratified by Parliament in 2001. The project has strong local community
support. Construction started in 2004, with licensing expected in 2020. The first nuclear waste will be
stored in 2023–25 (see WNA 2019).
23	Constructing a deep geological repository is a complicated process that requires sure data about the locality. In terms of radioactivity,
spent fuel becomes safe at least 300 years after its removal from a reactor, which is accordingly the period for which a repository
must function without difficulty. 300 years is the period of time during which radioactivity decreases to the values of normal radiation
in nature. It is also noteworthy that spent fuel is essentially safe from abuse, because to remove it from the protective containers would,
during this period, mean a deadly dose of radiation.
24	One of the most important is Platforma proti hlubinnému uložišti, involving 31 municipalities and cities and 14 movements.
25	For example, the dispute from 2017, when SÚRAO wanted to continue in exploratory activities, even though they were authorised to do
so only until the end of 2016 (see ČTK iDNES.cz 2017; Lejtnarová 2017).
26	The price of the final waste repository in Finland is estimated at around €3.3 billion for waste from five nuclear reactors. The operation
cost will be around another €2.4 billion and decommissioning around €200 million (see WNA 2019).
27	In 2019, this was China, France, the Great Britain, India, Japan, Pakistan, Russia and the USA.
28	Some current fourth generation reactor projects, such as the Fast-Neutron Reactors (also known as Breeders), plan to use previously
spent fuel as a fuel.
The Nuclear Sector110
The owner of spent nuclear fuel in the Czech Republic is ČEZ. It is responsible for storage only, with the final
deposition being the responsibility of the state. This was the purpose of founding the Radioactive Waste Repository
Authority, which on the basis of the Atomic Act is responsible for treating spent or radioactive fuel into a form adequate
either for deposition or for further use. When to deliver spent nuclear fuel to the state is exclusively up to ČEZ.
So far, it is not radioactive waste but potentially exploitable material that is involved (see Laciok et al., 2000, p. 190–191).
Tab. 6.4: Scheme of the End of the Nuclear Cycle in the Czech Republic
Spent fuel dwell App. 5–13 years App. 80 years Permanently or until potential
reprocessing
Location Spent fuel pools in the Dukovany
and Temelín nuclear power plants
Storage in the Dukovany and
Temelín nuclear power plants,
backup repository Skalka
Deep geological repository
Responsible ČEZ, a. s. SÚRAO
Supervised by State Office for Nuclear Safety
Financial means Corresponding budget ČEZ Nuclear account (ČEZ contributions)
Source: Otčenášek, 2005, p. 540; modified by T. Vlček.
ČEZ finances the deposition of spent fuel out of its own budget, while the Radioactive Waste Repository
Authority (SÚRAO) finances its activities from the nuclear account kept in the Czech National Bank and administered
by the Ministry of Finance. The nuclear account is a financial account contributed to by all producers of
radioactive waste in the amount laid down in Part V of the Atomic Act , which establishes the amount of the levy
and the manner of its payment by radioactive waste agencies to the nuclear account and the annual amount of
the contribution for municipalities, as well as the rules for permits to be granted. ČEZ, for example, pays CZK 55
for each MWh produced in nuclear power plants, while other producers of radioactive waste pay CZK 33,189 for
each barrel of 200 l, which is the basic depositing unit in repositories. At the end of 2018, there was approximately
CZK 28.4 billion on the nuclear account (SÚRAO, n.d.). Besides payments to the nuclear account, each operator
of a nuclear facility in the Czech Republic runs an individual financial reserve for dismantling and remediation of
that facility, as prescribed under the Atomic Act.
The warranty for temporary deposits of spent fuel is, therefore, provided by ČEZ until the fuel is delivered to
the Radioactive Waste Repository Authority. At that point, the state assumes responsibility.
6.4	 The Regulatory and Safety Framework of the Nuclear Industry
The key document for the Czech nuclear sector is unquestionably the Atomic Act (Act No. 263/2016 Coll.), which
entered into force on 1 January 2017, amending the Act of January 24, 1997 on the Peaceful Use of Nuclear Energy
and Ionizing Radiations (the Atomic Act), amended on 1 July 2017, 183/2017 Coll. Also relevant are Act No. 19/1997
Coll., Act No. 281/2002 Coll., and Act No. 44/1988 Coll. on the protection and utilization of mineral resources
(The Mining Act) (see “Zákon č. 44/1988 Sb.”).
The Atomic Act regulates basically all aspects of not only the nuclear industry, but of ionizing radiation in
general, which includes the regulation of the method of utilizing nuclear energy and ionizing radiation and conditions
for the performance of practices related to nuclear energy utilization and radiation-producing activities,
conditions for the safe management of radioactive waste, the performance of state administration and supervision
within nuclear energy utilization, within radiation activities and over nuclear items, etc.
The Mining Act, by contrast, treats uranium mining and, as in the case of coal, it is the Czech Mining Authority
and District Mining Authorities who oversee mining activity, observe working conditions, manage mining waste
and supervise adherence to Acts Nos. 44/1988 Coll., 61/1988 Coll. and 157/2009 Coll. and other regulations (see
Státní báňská správa České republiky).
Section II, Part IV of The Atomic Act commissions the State Office for Nuclear Safety (SUJB) to carry out
the public administration and supervision of nuclear energy and ionizing radiation use for radioactivity and nuclear,
chemical and biological protection. The SUJB is the central organ of public administration subordinated to
the Government, which means that the regulatory role in the nuclear industry is held strictly by these two bodies,
the Government and the SUJB.
The Nuclear Sector 111
The SUJB implements the regulation process through decrees, addressing the physical protection of nuclear
materials and facilities; then quality in nuclear energy use and radiation-generating activity, the criteria for
facilities and the distribution of selected facilities across safety categories as well as criteria for siting nuclear
facilities and of sources of significant ionizing radiation. It furthermore treats the issue of radiation protection
and the emergency preparedness of nuclear facilities and workplaces exposed to sources of ionizing radiation.
The SUJB is responsible for the functioning and organization of the National Radiation Monitoring Network.
Organization of the National Radiation Monitoring Network as amended by Decree 360/2016 Coll. currently consists
of 495 different monitoring points (the early warning network, thermoluminescent dosimeter networks, and
the air contamination monitoring point network), 12 laboratories, and a range of mobile groups (see Státní ústav
radiační ochrany, v. v. i.).
Tab. 6.5: Regulatory and Safety Bodies for the Czech Nuclear Sector and Their Role
Body State Office for Nuclear Safety (SÚJB)
Headquarters Prague, Senovážné namesti 9
Web www.sujb.cz
Role Its scope of authority, given under the Atomic Act No. 263/2016 Coll., Act No 19/1997 Coll. and Act No. 281/2002 Coll.,
among others, includes the state supervision of nuclear activity and items, the physical protection of nuclear facilities,
radioactivity protection and emergency preparedness at nuclear facilities and work sites with sources of ionizing radiation;
issuing authorizations for activities governed under Act No. 18/1997 Coll., for example, the siting and operation
of nuclear facilities and work sites exposed to sources of high-level ionizing radiation; the management of sources of
ionizing radiation and radioactive waste; transporting nuclear materials and radionuclide emitters; and approving documentation
with reference to nuclear safety and radioactivity protection set by the Atomic Act; to limits and terms of
nuclear facility working procedures, the means for assuring physical protection, emergency rules for the transportation
of nuclear materials and particular radionuclide emitters, internal emergency plans of nuclear facilities and workplaces
exposed to sources of ionizing radiation; monitoring the level of radiation affecting residents and workers utilizing sources
of ionizing radiation; working together competently with the International Atomic Energy Agency; coordinating and
securing activities while following the mandates of the Convention on the Prohibition of the Development, Production,
Stockpiling and Use of Chemical Weapons and on their Destruction within the meaning of Act No. 19/1997 Coll. and
from the Convention on the Prohibition of the Development, Production and Stockpiling of Bacteriological (Biological)
and Toxin Weapons and on their Destruction within the meaning of Act No. 281/2002 Coll., as well as performing
the function of a national authority according to the Comprehensive Nuclear Test Ban Treaty, from the Convention on
the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on their Destruction,
and the Convention on the Prohibition of the Development, Production and. Stockpiling of Bacteriological (Biological)
and Toxin Weapons and on their Destruction.
Organ The National Institute for Nuclear, Chemical and Biological Protection (SÚJCHBO)
Headquarters Milín, Kamenná 71
Web www.sujchbo.cz
Role The National Institute for Nuclear, Chemical and Biological Protection is a public research institution founded by
the State Office for Nuclear Safety on the basis of Act No. 281/2002 Coll. aimed at providing research and development
activity involving chemical, biological and radioactive substances, ensuring the safety of technical support for the supervision
and inspection work performed by the Office in radioactivity protection and monitoring the ban on the development,
production, stockpiling and use of chemical and biological weapons. Research activity targets the identification
and quantification of radioactive, chemical, and biological materials and assesses their impact on people and
the environment, including the assessment and development of individual and collective means of human protection
from these substances, and decontamination and safety research as part of the fight against terrorism and protecting
against severe industrial accidents.
Organ National Radiation Protection Institute (SÚRO)
Headquarters Prague, Bartoškova 28
Web www.suro.cz
The Nuclear Sector112
Role The main subject of the Institute’s activity is research into protection from ionizing radiation, including the infrastructure
of this research, specifically in the fields of safety research, research into the Radiation Monitoring Network and
research into exposure to artificial sources of ionizing radiation (nuclear facilities foremost), research into medical exposure
and research into exposure to natural sources of radiation. Other activities include supporting state supervision
and monitoring prevention efforts, and supporting inspectors in their monitoring work in radiation protection and emergency
preparedness, including departures and interventions, serving as an analytical and conceptual site for the analysis
of impact following nuclear and radioactive accidents, drafting measures, and providing advisory and consulting
services, education and public enlightenment, etc.
Organ Radioactive Waste Repository Authority (SÚRAO)
Headquarters Prague, Dlážděná 6
Web www.surao.cz, www.rawra.cz
Role The Authority’s major tasks and activities are to prepare, construct, operate, initiate, and shutdown radioactive waste
repositories and to monitor their environmental impact; to ensure that spent or radioactive nuclear fuel is processed into
a form adequate for depositing or further use; to keep records of received nuclear fuel and of fuel producers; to manage
levies of radioactive waste sources on the nuclear account; to prepare proposals with reference to the establishment
of payers’ levies on the nuclear account; to manage radioactive waste brought to the Czech Republic from abroad that
cannot be returned, etc. Since 2000, it has regulated all radioactive waste repositories in the Czech Republic: Richard,
Brotherhood, Dukovany, and Hostim. It coordinates all work aimed at preparing and constructing a deep geological
repository of high-activity radioactive waste and spent nuclear fuel, the launch of which is estimated in around 2065.
Sources: Zákon 458/2000; Zákon ze dne 24. ledna 1997; Státní úřad pro jadernou bezpečnost.; Státní ústav radiační ochrany, v. v. i.;
Správa úložišť radioaktivních odpadů; composed by T. Vlček.
The SÚJB is the founder of two public research institutes, namely the National Institute of Nuclear, Chemical
and Biological Safety (SÚJCHBO) and the National Radiation Protection Institute (SÚRO). Their role is not regulatory,
but they play a vital role in protecting against ionizing radiation. The Radioactive Waste Repository Authority
(SÚRAO) has a similar protective role.
The important agents at the level of the supranational legal framework are the European Atomic Energy
Community (EURATOM) and the United Nations mediated by the International Atomic Energy Agency (IAEA).
EURATOM was founded on March 25, 1957 in Rome and it has its headquarters in Brussels. Given that nuclear
safety, naturally, represents one of the priority fields of EURATOM, it issues a vast number of directives and recommendations
aimed at unifying the practice of radiation protection in all member states, and the directives cover
radiation protection in comprehensively, from basic principles and medical use of radioactive materials through
to the transport of radioactive substances. These directives were implemented in the Czech legal framework on
the acquis communautaire basis either through the Atomic Act amendments or SUJB decrees.
The most complex legislative changes imposed from the outside took place as a result of the accession negotiations
of the Czech Republic to the European Union, on which occasion a White Paper of the European Commission
on Preparing the Associated Countries of Central and Eastern Europe for Integration into the Internal Market of
the Union was adopted in 1995 (see Commission of the European Communities, 1995). The White Paper brought
several important directives with reference to the nuclear energy field: the Directive on shipments of radioactive
waste No. 92/3/EURATOM, supplemented by Directive No. 93/552/EURATOM (both were then altered by Directive
No. 2006/117/EURATOM), the Directive on basic safety standards No. 96/29/EURATOM (later altered by 2013/59/
EURATOM), referring to maximum permissible doses of radioactive contamination of food arising after a radioactive
emergency (accident), the import of agricultural products following the accident in Chernobyl and shipments of
radioactive materials. Besides the White Paper, the Czech Republic also adopted a string of directives addressing
the radioactive protection of the public, workers, patients and the information standard for residents.
The IAEA emerged on June 29, 1957, in Vienna, which is also its current location. The former Czechoslovakia
was a member from the Agency’s founding, while the Czech Republic joined on January 1, 1993. The Mission of
the Agency is to enforce the safe and peaceful use of nuclear technologies. Unequivocally the key bearer of this mission
is the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), which entered into effect on March 5th
, 1970
and was prolonged in 1995 for an indefinite period. With respect to nuclear safety, one of the goals of the Treaty is
monitoring and cooperation in peaceful nuclear activities (see Závěšický 2005, p. 132). IAEA is the exclusive monitor
in the field of the peaceful use of nuclear energy, resting on a unique monitoring mechanism based on the political
will of states to make their nuclear facilities available for monitoring. By doing so, states demonstrate that they
have fulfilled their obligations under the Non-Proliferation Treaty and its additional protocols.
The Nuclear Sector 113
By its mandate given by the Articles of Association/Statute, the IAEA is obliged to promote the peaceful use of
nuclear energy and to make sure that secret abuse for military purposes does not take place. A special inspectorate
was set up for monitoring on the basis of bilateral agreements called Safeguard Agreements between member
states and EURATOM that executes regular inspections of all declared nuclear facilities in countries do not possess
nuclear weapons and non-military facilities in countries that do (see “Stálá mise,” 2010). Until 2009, the initial
agreement between IAEA and Czechoslovakia from March 1972 was in effect; on October 1, 2009 the Czech
Republic approached a Trilateral Safeguard Agreement (INFCIRC/193 or also 78/164/EURATOM). The Czech
Republic, therefore, accepted the commitment to approach trilateral agreements between EU member states
not possessing nuclear weapons, EURATOM and IAEA as part of the IAEA safeguard system (see SÚJB, n.d.a).
Based on the Trilateral Safeguard Agreement and within the meaning of Commission Decree No. 302/2005/
EURATOM from February 8, 2005, on the implementation of EURATOM safeguards, starting from 2005, inspections
of nuclear facilities are performed by both IAEA and EURATOM inspectors.
In speaking of supranational regulation, the influence of the European Nuclear Safety Regulators Group
(ENSREG), an independent body established in 2007 under from a Decision of the European Commission should
not be underestimated. ENSREG consists both of EU members and officials from national nuclear safety offices,
radioactive waste management offices, and radioactive protection offices in all EU member states. ENSREG’s goal
is to reach mutual understanding and development in the fields of nuclear safety and management of radioactive
waste (see The European Nuclear Safety Regulators Group).
6.4.1 The safety framework after the Fukushima accident and change in the perception
of nuclear power in the European Union
After the devastating earthquake in Japan on the 11th
of March 2011, which caused a major nuclear accident rated
at 7 on the International Nuclear Event Scale (INES) at the Fukushima Daiichi nuclear plant, the safety measures
of nuclear power plants were widely discussed around the world29
. Many states, including the member states
of the European Union, underwent a major re-examination of nuclear reactor safety, and a series of stress tests
were carried out in 2011 and 2012 in the EU30
. The accident was also followed by reconsideration of using nuclear
power and some Member States (including Germany, Belgium, and Spain) decided to abandon nuclear energy
entirely. The most important directive related to nuclear safety reflecting the Chernobyl accident (also INES 7)
was Nuclear Safety Directive 2009/71. In the wake of the Fukushima accident, the directive was rapidly revised,
and it was amended by Directive 2014/87. This directive “reinforced the role and effective independence of the national
regulatory authorities. It has enhanced transparency on nuclear safety matters. It has strengthened principles,
and introduced new general nuclear safety objectives and requirements, addressing specific technical
issues across the entire life cycle of nuclear installations, and in particular, nuclear power plants. It has extended
monitoring and the exchange of experience by establishing a European system of peer reviews. Finally, it established
a mechanism for developing EU-wide harmonized nuclear safety guidelines” (see Dehousse 2014, p. 3–4).
Despite the increased security measures, nuclear energy remains controversial among the Member States.
Nuclear power plays an important role in 14-member states, and around 25.1% of electricity was generated from
nuclear plants in the EU in 2017. But production is o the downslope: between 2009 and 2017, total production
of heat from nuclear sources fell by 10%. France, Germany, the UK, Sweden, and Spain are the largest nuclear
producers, but only the UK plans to further develop its nuclear sector, while Germany will be the most rapid at
phasing out nuclear energy, intending to do so by December 2022. The nuclear accident in Fukushima speeded
up the nuclear phase out in Germany and Belgium. By contrast, 12 EU states joined together to form the Nuclear
Like-Minded Group to promote the role of nuclear energy in the EU’s energy mix in March 2013. With the Czech
Republic coordinating the group, with the participation of the UK, Bulgaria, Finland, France, Hungary, Lithuania,
29	As regards the nature of the Fukushima accident, it should be added that each Czech nuclear unit has backup sources of power in
the form of three separate diesel aggregates that are further secured with batteries.
30	These tests were done in three parts. The first was implemented on individual nuclear plant operators (i.e. ČEZ), the next executed
by national regulators (SÚJB), and the third involved monitoring inspectors from other countries (European Nuclear Safety Regulators
Group, hence the European Commission) (see Macková, 2011; SÚJB, n.d.b). The final report following the process of mutual evaluation
of nuclear plant resistance by the members of the EU27 both for Temelín and Dukovany power plants was as follows: “No conditions
were identified that would require immediate resolution. The power plant is able to safely manage even highly improbable extreme
emergency conditions without posing any threat to its vicinity” (see ČEZ, a.s., 2011a; ČEZ, a.s., 2011b).
The Nuclear Sector114
the Netherlands, Poland, Romania, Slovakia, and Spain. Nine of these countries plus Slovenia sent a letter to EC
in July 2014, demanding “a level playing field for nuclear power among other low-emission sources in the EU so
that it could play a greater role in energy security, sustainability, and emissions reduction” (see WNA 2019b).
Recently, support for nuclear power has been uncertain in Spain and France. There are tendencies towards
phase-out, but nuclear power plays a major role in generating electricity in both countries. In February 2019,
the government of Spain decided to close all seven nuclear plants between 2025 and 2035, but this step will
require a large investment into RES and also depends on the strong position of the Socialist party to uphold its
commitment (see Binnie 2019). In France, a plan to cut nuclear energy reliance by 50% was postponed from 2025
to 2035 and the future is uncertain, as French power plants face water shortages during the summer months.
By contrast, construction of new power plants is being considered in the Czech Republic and Poland, and construction
is underway or about to start in the UK, Slovakia, Finland, France, and Hungary.
The Czech Republic is cooperating closely with the Visegrad countries (V4) on nuclear energy at the EU level
and an important ally used to be the United Kingdom31
. All (apart from Poland, which has no nuclear power plant
at present) are planning to continue producing electricity and heat from nuclear power plants and must maintain
a strong common position within the EU. The V4 countries are all keen on increasing or sustaining their energy
self-sufficiency and reducing dependency on Russian natural gas through the nuclear power (see Szalai 2013;
Szalai 2018; Denková et al. 2017).
However, the clash between these two opposing camps is reflected at the EU level, as there is no support
for nuclear energy comparable to that for renewable energy, even though it is a zero-emission source of energy.
Further, there is an effort by the European Parliament to label nuclear power a polluting industry. The European
Parliament voted on the 28th
of March 2019 to exclude nuclear power from being acknowledged as a clean technology,
thus complicating the approval of investments into this sector on the financial markets. Together with
the strong opposition and problems with financing and completing construction, the nuclear sector is in a crisis
and further development is in jeopardy.
6.5	 Demand Forecast
According to long-term forecasts, power use will increase in the Czech Republic and electricity demand will increase
by 25–33% by 2050. The energy mix of installed power is currently 46% dependent on coal, with 19% of
the installed capacity from nuclear energy, 19% RES, and 8% natural gas. The share in electricity generation is
82% from coal and nuclear energy and only 11% from RES (see OTE 2019). Table 6.6 displays a comparison of
goals declared in the State Energy Policy and its revisions with reference to the consumption of energy sources
by 2050. It is evident that the role of the nuclear sector in the Czech power industry will likely improve to make
up a third of all energy sources in the Czech Republic. In terms of the installed capacity of nuclear power plants,
scenarios also count on the increased capacity of existing units, with the actual installed capacity of nuclear
power plants at 4,204 MWe as of the 31st
of December 2018 (see table 6.1); under the State Energy Policy, which
calls for Dukovany to be completed in 2037 and 2039 and Temelín’s to be completed in 2043 and 2045, by 2050
installed capacity will be approximately 7,050 MWe.
Tab. 6.6: The Shares of Solid, Liquid and Gas Fuels in Energy Resource Consumption According to the State Energy Policy of
the Czech Republic of August 2012 and Its Revisions of December 2014 (in %)
Type of Fuel Long-Term Goal (SEP 2004) by 2030 SEP (8/2012) Target Values by 2040 SEP (12/2014) Targets by 2040
Solid 30–32 12–17 11–17 %
Gas 20–22 20–25 18–25 %
Liquid 11–12 14–17 14–17 %
Nuclear 20–22 30–35 22–33 %
Renewables 15–16 17–22 17–22 %
Source: Státní energetická koncepce, 2014, p. 44; Ministerstvo průmyslu a obchodu, 2012, p. 20–21; Státní energetická koncepce, 2004,
p 40–49.
31	 With the complicated situation around Brexit the pro nuclear group has lost an important ally.
The Nuclear Sector 115
The Government has declared a clear stance on the development of the nuclear sector (and completion of
the Temelín or Dukovany nuclear power plants) under several prime ministers, beginning with Petr Nečas, who declared
at the 11th Energy Congress of the Czech Republic that the country “intends to continue to run the Temelín
and Dukovany nuclear power plants and to continue the process that will lead to the construction of additional
nuclear units” (see Nečas, 2011, p. 199), continuing with Bohuslav Sobotka (of the political party ČSSD) and so far
enduring with Andrej Babiš (from political party ANO. All have agreed on the necessity of building the new nuclear,
but had differing opinions on financing. Current plans call for the construction of new unit(s) in the Dukovany
nuclear power plant, which has a much greater potential as there is, according to its ex-chairman, Tomáš Žák,
“producing potential at the site of Dukovany given by exterior conditions of around 3,000 to 3,500 MW by applying
existing technologies, and there are more possibilities than that” (see Cieslar, 2010e).
Confidence in nuclear energy and interest in its development and completion stable, as visible in the consensus
among political parties on the issue and wide acceptance and support by the people.
In 1980, Ludvík Kopačka wrote that “nuclear energy is truly becoming a developing energy source in
the Czechoslovak context that will gradually assume the role of covering increasing energy demand and gradually
the increasing consumption of primary sources, as well” (see Kopačka 1980, p. 214–215). This basically remains
applicable even in the second decade of the third millennium. The Pačes Commission argues that “around
2020–30, the lifespan of existing nuclear power plants should be prolonged for at least 60 years, while the increase
in energy consumption in the Czech Republic and the replacement of gradually closing coal-fired power plants
in terms of their basic capacity should be covered by building new nuclear power plants, reaching the share in
power production already present in France, for example (77%)”, and “around 2040–2050, starting construction
of fast reactors” (see Úřad vlády ČR & Nezávislá energetická komise 2008, p. 108–109). Ten years later the perception
is similar, though a share of nuclear power is projected by around 50–60% by 2050 and the rest is planned
to be covered by RES and natural gas.
Based on this, it is evident that the Czech Republic has a firm position regarding the development of the nuclear
industry, that the sector is not indifferent to it and that it has important potential for energy and the supply
safety of the Czech Republic and that the Czech Republic counts on increasing its use of this type of energy both
over the short- and long-term. We may state that state energy policies as well as the State Energy Policy and their
revisions support the development of the nuclear industry. There is a gradual growth in share in primary sources
consumption, from 20% under the 2004 State Energy Concept to 34% in primary sources consumption and
50–60% in final consumption in the revised version of State Energy Policy.
Unlike with coal and natural gas, there is no international legal obligation to keep reserves of uranium (see
OECD Nuclear Energy Agency / IAEA 2008, p. 171), not even resulting from the membership in IAEA or EURATOM.
Nor was there under Czech law until the 2014 State Energy Concept. In the 2004 State Energy Concept, there was
a non-binding recommendation to have “nuclear fuel strategic reserves in a form adequate for loading the reactor”
(see SEP 2004, p. 27). In the new State Energy Concept, under Priority V related to energy security, the target
is to “permanently ensure adequate emergency stocks of all the basic primary sources” (SEP 2014, p. 57) and to
“ensure that nuclear power plant operators maintain stocks of fuel assemblies that guarantee facilities will be able
to operate at full capacity for four years, or use reserve capacity backup contracts for fuel supplies or maintain
the corresponding stocks of enriched uranium and the country’s own fuel fabrication within the Czech Republic.
The accomplishment of this objective is to be scheduled in line with increasing the proportion of nuclear energy
to a target level of 50–60 % of final consumption” (see SEP 2014, p. 58). With regard to the high density of nuclear
power plant fuel, the relative stability of its price and the vast number of active producers of uranium concentrate,
as well as the substantial number of processing institutions, it is possible to stock up for a decade in advance.
Tab. 6.7: Forecast of Uranium Concentrate Demand in the Czech Republic (tonnes per year)
2015 2016 2017 2020 2025 2030 2035
582 566 700–705 700–705 725–730 725–730 725–1,120
Source: OECD Nuclear Energy Agency 2018, p. 199.
The Nuclear Sector116
6.6	 The long road to a new nuclear source of energy for
the Czech Republic
Building a new nuclear power plant has been under discussion in the Czech Republic since 2004. To make a long
story short, the plan was included in the State Energy Policy of 2004, with a new unit at each location under consideration,
a public tender for construction at Temelín in 2009 prepared then cancelled in 2014, and a new State
Energy Policy presented in 2014 that highlighted once again a plan for a new nuclear unit and a waste repository
to be built. By 2019, both plans had already been delayed for three years.
Since the financial crisis of 2008, the nuclear industry has suffered its own “nuclear crisis”. Conditions for financing
have worsened due to new bank policies, the electricity price has decreased due to electricity generation
from renewable sources, many projects have been delayed and have gotten more expensive. Also, the Fukushima
accident represented a limit on nuclear sector development.32
Because of this and some failed projects, two of
the biggest companies, Westinghouse and Areva, faced deep structural problems. As a result, Chinese companies
and the South Korean company KEPCO increased their share on the world market. Russia’s Rosatom also
found its way by means of construction works and complete supply chain offers as well as the financing of their
projects. This constitutes a strategy for building and eventually exploiting path dependence to secure orders for
future years (see Minin, Vlček 2018; Jirušek et al. 2015).
The majority of the Czech Republic (including government, industry, and a high percentage of population33
)
is convinced that a new nuclear source is needed in order to secure electricity production in upcoming years,
especially after the closure of Dukovany power plant and most of the coal plants, around 2037 – depending on
its lifetime extension34
. The question of whether to build or not is not the issue; the consensus is clear. The problem
is who is going to pay for it. This proved to be an issue in 2014 and it is proving to be an issue again today.
6.6.1 First attempt, an unsuccessful tender for Temelín nuclear power plant
On August 3, 2009, ČEZ announced a tender for two new nuclear blocks for the Temelín nuclear power plant. To
some extent it was based on the investment plan for the construction of the Temelín power plant with 4 × 1,000
MWe of installed capacity, adopted in February 1979, replicating the construction site itself and some already
existing auxiliary systems. Total capacity of the new nuclear plant remained at 2 × 1,200 MWe after elimination
of AREVA SA from the tender35
. It is not just the project that is part of the tender, but the construction work itself,
which makes the entire endeavour, therefore, a turnkey power plant.
After it was awarded, the overall administrative tender process should have lasted for roughly 7 to 8 years (together
with the construction, 15 years), which meant that the connection of new Temelín units was estimated for
around 2024. The tender’s finale and the signing of the contract by the winning bidder were planned for the end
of 2011. In October 2010, however, everything was postponed until 2013 due to the unpreparedness of suppliers,
which would naturally lead to a delay in the entire process. But the deadlines were impossible to meet without
altering the applicable construction and permit legislation. The job of the Government’s Commissioner for
the ČEZ nuclear tender was given to Václav Bartuška, Special Envoy for Energy Security of the Czech Republic.
Three entities took part in the tender. These included a consortium of the companies ŠKODA JS, a. s., of
the Czech Republic, Atomstrojexport, a. s., from the Russian Federation (a subsidiary of the Russian company
32	On the other hand, the accident in Fukushima Daiichi means new business and development for Czech nuclear physicists as the escalation
of monitoring and various tests of existing nuclear power plants will most probably become an interesting business, which
the ÚJV Řež is preparing for at the level of the Czech Republic (for more details see Korbel & Kostka 2011, p. 30).
33	In May 2018 49% supported construction of new nuclear unit, 32% were against and 19 % undecided. Comparing to the previous two
years, the number of people supporting the new unit decreased, people against stayed and percentage of people who do not know increased
(see cvvm 2018).
34	The lifetime of Dukovany power plant was designed to be 30 years but it has been extended until the power plant will not stop comply
the safety test. Expected lifetime is 50 years, some are speculating about 60 years, but the pressure from the European Commission
is to decommission nuclear power plants after 40 years. Nevertheless, the institutional approach could change as for example IEA is
supporting nuclear power plants as a clean source of energy (see IEA 2019).
35	AREVA SA had a variante of 2 x 1,700 MWe unit.
The Nuclear Sector 117
ZAO Atomstroyexport36
) and OKB Gidropress, a. s.37
from the Russian Federation, offering the project a MIR 1200
(Modernized International Reactor) with 1,198 MWe of capacity38
; the French company Areva SA39
, which offered
an EPR (European Pressurized Reactor) with 1,700 MWe of capacity40
; and the American Westinghouse Electric
Company, LLC41
, which offered an AP1000 with 1,200 MWe of capacity. In each case, the reactors were of the III
or III+ generation.
Tab. 6.8: Technical Characteristics of the Projects Proposed by Single Nuclear Tender Applicants
Company Westinghouse Electric
Company, LLC
Areva SA ŠKODA JS, a. s.,
Atomstrojexport, a. s.,
OKB Gidropress, a. s.
Project AP1000 EPR™ MIR 1200 (AES 2006)
Thermal capacity(MWt) 3,415 4,590 3,200
Electrical capacity (MWe, net / gross) 1,117 / 1,200 1,590 / 1,700 1,113 / 1,198
Efficiency (%) 33 36 33.7
Capacity factor (%) 93 90.3 >98*
Number of cassettes in the active zone 157 241 163
Number of rods in cassettes 264 265 312
Number of steam generators 2 4 4
* Such a high value results from shorter maintenance and refuelling breaks and prolonged fuel campaigns.
Source: Bílý, 2011, p. 268; Company’s official documents; selected and modified by T. Vlček.
On October 5, 2012, ČEZ announced the elimination of the French company Areva from the competition for
building new blocks at the Temelín nuclear power plant because it did not meet the basic commercial and legal
terms of the competition (see “ČEZ vyřadil AREVU”). Areva submitted an appeal to the Czech Office for
the Protection of Competition, but in February 2013, it upheld the decision.
In the first round of the tender, the subjects of evaluation included technology, price, and safety. According
to the results of March 2013, the American company Westinghouse Electric Company, LLC, was the first in this
aspect, but the lowest price was offered by the Russian-Czech consortium. The AP1000 reactor was in many aspects
revolutionary, with an advantage stemming from its modular construction, which, on the other hand, posed
a problem in that it had not been tried before and could, therefore, limit the inclusion of domestic companies in
the project. MIR was an evolutionary reactor based on the long history of VVER reactors as well as on Russian
experience with breakdowns. It is a tested and reactor and is cheaper, but it is technologically older.
Although ČEZ argued that the construction of new nuclear blocks arose from the State Energy Concept, Policy
of Spatial Development, and the conclusion of the Paces energy commission (see ČEZ, a. s., 2009a), the company
36	ЗАО Атомстройэкспорт is the leading Russian organization building and modernizing nuclear power plants abroad. It is supervised
by the Federal Agency for Nuclear Energy, Rosatom (Федеральное агентство по атомной энергии России, РосАтом). A majority
of its shares (50.2%) are held by VPO Zarubezhatomenergostroy (44%; Всероссийское производственное объединение
"Зарубежатомэнергострой") and OAO TVEL (6.2%; OAO "ТВЭЛ"), which Rosatom controls on behalf of the state. 49.8% of shares
are held by Gazprombank (OAO "Газпромбанк").
37	A subsidiary of the Russian company OAO OKB Gidropress (OAO ОКБ "Гидропресс").
38	Based on talks with the Russian side, it is interesting that the tender should have included a serious offer to build a manufacturing
plant in the Czech Republic, i.e. a plant for assembling fuel cassettes out of single pallets. According to the Russian calculation, this
sort of plant proves profitable for the state if there are at least eight reactors, which is the number the Temelín power plant will reach
upon completion. This is accordingly an opportunity for fuel fabrication for the Russian type of power plant in Slovakia and elsewhere.
The paradox is that in this manner the most frequent comment on the Russian project, i.e. intensification of Czech energy dependence
on Russia, to some extent ceases to be logical.
39	The ownership structure at the time of the tender was as follows: 73.03% Commissariat à l'énergie atomique (technological research
institution financed by the French Government); 10.17% French state; 4.82% Korean car industry Kia Motors and the remaining 11.98%
other companies, employees and publicly traded stocks.
40	The great advantage of this reactor may be found in the high rate of capacity maneuverability.
41	 At that time belonging to the Japanese companies Toshiba Corporation (67%) and Ishikawajima-Harima Heavy Industries Co. Ltd. (3%),
American mechanical companies The Shaw Group (20%) and Kazakh state company Kazatomprom NAC (Казатомпром HAK 10%).
The Nuclear Sector118
was criticized for its poor communication with the majority stakeholder in preparing the tender. At that time,
it was the largest tender in the world and, according to Deputy Minister of Industry and Trade Tomáš Hüner,
the state was planning to have its own part in it to ensure full control: “The state has very strong options. It can
change the Statute and it can directly express its opinion regarding the tender, bypassing the General Meeting
of Stakeholders, where 70% of shares are owned by ČEZ It also has the bluntest tool in its hands; that is the ability
to replace the management” (see Rafaelová, 2009).
In terms of the nuclear sector, the Government’s policy statement was clear during the first tender. It expresses
the state’s will to support both the construction of new blocks at the Temelín nuclear power plant and the modernization
of the Dukovany nuclear power plant, including the accompanying range of buildings so as to achieve
a balanced energy mix. The state will furthermore proceed with its transparent approach while searching out
sites for radioactive waste repositories, including supporting other options leading to their decommissioning (see
VČR, 2010a, p. 37). The Government, with respect to the development of the nuclear industry, behaved in a very
coherent and conceptual manner, based on from state energy policies and the State Energy Concept and its so
far unapproved revision.
When the Expert Working Group for Energy Security submitted its conclusions in 2006 regarding Czech
energy to the Committee for Foreign Security Policy Coordination, it recommended prolonging the lifespan of
the Dukovany and Temelín nuclear power plants, for the state to create the conditions for further quantitative and
qualitative development of the nuclear sector, and seeking to increase electricity production through the framework
of the existing localities–in other words, to complete the Temelín nuclear power plant and, more broadly,
the facilities in the originally planned localities (Blahutovice), as well. For diversification reasons, the recommendation
was to have the new technologies supplied by EU countries (see Odborná pracovní skupina pro energetickou
bezpečnost [OPSpEB], 2006, p. 14). The document also recommended “the restoration of uranium mining,
because for the major construction of nuclear sources in the Russian Federation and unchanging capacity
of nuclear fuel production, there could be a shortage of that fuel. A country capable of supplying its own uranium
and asking only for its processing into fuel will be unambiguously at an advantage compared to those who must
ask for the complete purchase of fuel” (see OPSpEB, 2006, p. 8–9). The discussed revision of the Atomic Act also
advocated the development of uranium mining, which would enable the allocation of funds from the nuclear account
also to municipalities affected by mining exploration related to a deep geological repository, which could
be a good way to reach a consensus between state and municipal interests while searching for a proper to build
this deep geological repository.
“Preparation of and proceeding with a schedule of a supplier selection process for the completion of Temelín
nuclear power plant has been approved, and I hereby wish to confirm that this plan remains unchanged.
‘The Government wishes and, because of its share in ČEZ, will be able to arrive at a winning bidder by the end
of 2013’, were the words of Prime Minister Petr Nečas at the 11th Energy Congress of the Czech Republic (see
Nečas, 2011, p. 199–200). ČEZ had been preparing very seriously for the Temelín project. The preparations included,
on April 1, 2009, a new division, called the  Division for the Construction of Nuclear Power Plants, to coordinate
the preparation of nuclear projects not only within the Czech Republic (Temelín and Dukovany), but also
abroad (Jaslovské Bohunice – Slovakia) (see ČEZ, a. s. 2010b, p. 5). Circumstances such as the expected shut
down of large coal power plants in the Czech Republic, Poland and Germany by 2020, difficulties with building
any larger units (only the Počerady combined cycle power plant and Ledvice power plant were built), problems
with the integration of renewables, and the political decision to depart from nuclear energy in Germany,42
played
into the hands of the Temelín’s completion with nuclear blocks of 2 × 1,700 MWe of installed capacity.
Final offers for the tender were submitted in July 2012 and an agreement was supposed to be signed by the end
of 2013, but the final decision was postponed by 18 months. In the meantime, ČEZ was deciding on the form of
financing and searching for a strategic partner. Rosatom offered full financing and in the middle of 2013, while
the American Exim bank offered to finance half the project if Westinghouse technology was used. In the end,
42	After the accident in Fukushima Daiichi, Germany immediately suspended the operation of its eight oldest nuclear power plants, while
the expert commission assessing their re-launch in May 2011 recommended leaving them closed. The Ethics Commission then decided
to shut down all nuclear power plants by 2021, resp. 2022. The departure from the nuclear industry is not new for Germany, as it had
six nuclear reactors closed within the territory of German Democratic Republic immediately after the unification of Germany in 1990,
while the construction of five reactors already in the building process (Stendal nuclear power plant) was postponed and then entirely
terminated a year after.
The Nuclear Sector 119
the Czech government under with Prime Minister Petr Nečas planned to offer a contract for difference for the electricity
from the new units. The Ministry of Finance was offering a strike price of 60 EUR per MWh, while ČEZ requested
70 EUR per MWh (the price of electricity was around 40 EUR in 2013). The situation changed after elections.
The Government of Prime Minister Bohuslav Sobotka decided against state aid to the project, especially
after the poorly handled state aid to RES. ČEZ announced that it would not be possible to build a new nuclear
unit without state aid and cancelled the project in April 2014 (see WNA 2019a).
According to Ladislav Blažek, Former Development Deputy of the Federal Ministry of Energy and one of
the leading Czech experts in the field of mechanical mine installations, energy, and gasworks, the prospects
for this sector are evident. “Without developing the nuclear industry, the Czech Republic can barely make do, if
it wishes to achieve energy independence, and complete its commitments to do with emissions reduction if it
does not wish to waste the experience gained. No responsible politician can deny the need to construct additional
sources of nuclear energy in the shortest time possible if he or she does not wish to speculatively weaken
the hard-won energy self-sufficiency of the Czech Republic” (see Blažek 2009, p. 68).
6.6.2 Second attempt, the new trajectory
On the 1st
of January 2015, the new State Energy Policy came into force, showing a clear trajectory for the nuclear
sector. “Within the timeframe of the State Energy Policy, what is important in terms of predicting the balance
of production and consumption is completing the construction of additional nuclear power units to produce
around 20 TWh by 2035, extending the lifetime of the existing four units at the Dukovany power plant (to
50 to 60 years) and later the possible construction of another unit to compensate for the decommissioning of
the Dukovany plant. In the long term, nuclear energy could provide in excess of 50% of the electricity generated,
thus replacing a large proportion of the coal sources. It is also advisable to start making greater use of heat
energy from nuclear sources to heat larger urban agglomerations” (see SEP 2014, p. 14). The document also sets
long-term priorities in relation to the EU, since the goal for nuclear energy is to “promote nuclear energy as an
accepted carbon-free technology which may be supported in the policies of the various member countries” (see
SEP 2014, p. 98). Among other things, it sets a deadline for selecting sites for the final repository of spent nuclear
fuel, which are to be submitted to the government so a decision may be made by 31.12.2025 (see SEP 2014, p. 93).
The document refers to the National Action Plan for the Development of Nuclear Energy in the Czech Republic
(NAPJE) of May 2015 which converts the targets of the State Energy Policy into concrete implementation steps.
It says ‘to ensure the energy security of the Czech Republic and overall social benefit, from the perspective of
the state preparations must begin immediately for the siting and construction of one nuclear unit at the Temelín
site and one unit at the Dukovany site, while protecting against potential risks by obtaining the necessary permits/licences
for the possible construction of two units at each site. In particular, maintaining the continuation
of production at the Dukovany site, constructing a unit at the Dukovany site, and commissioning it by 2037 are
crucial in order to ensure the continuity of the operation of a nuclear facility and human resources at the site until
2037, when the shutdown of the existing NPP is expected” (see NAPJE 2015, p. 6).
NAPJE is discussing three options for financing the new units and has drawn up a SWOT analysis. The options
are:
•	 Construction of a facility/facilities through the investor ČEZ and possibly its 100% owned subsidiary: from
the perspective of the state, investment through the existing owner and operator of nuclear power plants,
ČEZ and possibly its 100% owned subsidiary
•	 Association of investors: a private investor consortium, i.e. an association of investors formed in order to
achieve a certain goal (ČEZ, financial investor, large customer, contractor of nuclear unit, etc.).
•	 State-owned enterprise: direct construction by the state through a newly established state-owned enterprise
(NAPJE 2015, p. 74–76).
From the state’s perspective, the first option is the preferred option for the investment model for constructing
new nuclear facilities, but not for ČEZ. But the document also says that ‘in the event that the investor plan
drawn up by ČEZ is not implemented through ČEZ for any reason whatsoever, in line with the procedure according
to the first option, the state may ensure the construction of new nuclear facilities in accordance with the time
schedule defined in SEP, through the selection of two alternative options’ (see NAPJE 2015, p. 6). The third option
involving direct construction by the state through a newly established state-owned enterprise is, due to
The Nuclear Sector120
the large number of negatives entailed, chiefly the high impact on the state budget and the increased national
debt, ‘the least likely and it is therefore mentioned only for the sake of completeness’ (see NAPJE 2015, p. 76).
A Contract for Difference is considered as a possible guarantee mechanism; the document suggests three scenarios,
for 15 years, 35 years, and 60 years (see NAPJE 2015, p. 84–85).
The document sets tasks and priorities for the development of the nuclear energy sector and related to the construction
of a new nuclear unit. The most important are: make sure that strategic partners are identified and contacted
for the construction of a new nuclear facility in the Czech Republic by 31/12/2015; open negotiations with
the European Commission on the method of supplier selection, financing, rate of return guarantee and state support
by 31/12/2016; and decide on the investment and business model for the construction of a facility by 06/2016
(see NAPJE 2015, p. 97–115). Expected costs and a projected timetable are shown in table 6.9.
Tab. 6.9: Limit costs incurred from 01/2015 in individual sub-milestones of the project
Milestone Anticipated date
(ETE / EDU)
Costs of 1 project (Temelín
NPP or Dukovany NPP)
Costs of parallel
preparation of both projects
Selection of the EPC contractor, EPC contract
signature with partial effectiveness
2019 2.5–2.6 4.3
Issue of a planning permit 2022 10.7–10.9 17.5
Issue of a licence for construction (SUJB) 2024 16.4–17.2 27.2
Issue of a building permit (readiness of
the project for implementation, i.e. for
the issuance of a full effectiveness notice for
the EPC contract)
2025 19.1–20.2 31.9
Note: costs in billion CZK
Source: National Action Plan for the Development of Nuclear Energy in Czech Republic 2015, p. 91, modified by T. Stašáková
6.6.3 Second attempt, who is going to pay?
The motivation for the construction remains the same as for the first tender. In addition, there is less time to start
the construction project and more pressure on clean energy sources. Yet the Czech Republic is lagging behind
schedule, frozen on deciding on the investment and business model for construction of a new nuclear unit, three
years behind schedule as of June 2019.
In June 2015, by approving NAPJE, the Czech Republic government decided on reopening preparations for
a new nuclear power plant to be built under the government of Prime Minister Bohuslav Sobotka and Minister of
Finance Andrej Babiš (the current Prime Minister). But this time, the new construction was planned for Dukovany,
as Dukovany will be decommissioned sooner; it is more strategic to have a nuclear power plant in two locations
than it is to have one big unit; employment is also provided this way at both locations. New construction at Temelín
has not been completely cancelled; it remains under continuous preparation next to the Dukovany construction
and follows the development of nuclear energy in the Czech Republic.
According to newspaper headlines in 2015, the new units were supposed to be finished by 2025. Reports
also mentioned potential obstacles such as financing, the changing European attitude to nuclear energy, disagreement
from Austria and a water shortage in the Jihlava River, which is the main source of water for cooling
the Dukovany plant. (see Voříšek 2015, Budín 2015, Ševeček 2015). In 2015, the Prime Minister was expecting to
open the tender by the following year and the Minister of Finance had a clear view as to how the project should
be financed. Babiš said that since ČEZ operates both nuclear plants, it should also complete/secure the new
construction; the government would not offer a contract for difference or any financial support (see Budín 2015).
And although the schedule for the whole process was given by NAPJE, the final decision about the new nuclear
unit and its financing was and still is seen as a sensitive political topic and thus was not broached before the parliamentary
elections of 2017.
In 2016, ten companies were addressed by the Ministry of Trade and Industry, six of which showed interest in
building a new nuclear unit in the Czech Republic. These were the Russian state company Rosatom, EDF from
France (Electricité de France), the American-Japanese Westinghouse Electric Company, Korea’s KHNP (Korea
Hydro&Nuclear Power), China’s General Nuclear Power, and a joint project submitted by Areva and Mitsubishi
Atmea. These companies started bilateral discussions with the Ministry of Trade and Industry in the form of
The Nuclear Sector 121
consultations and with involved municipalities in the form of roundtables. But they were strictly discussions,
mostly of technical particulars, because prior to the government decision on financing, none of these companies
was able to provide an offer (see ČTK 2016b). During these discussions an intergovernmental agreement
was considered, following the example of Hungary and its agreement with Russia on financing the Paks II nuclear
power plant. Petr Závodský (Director of ČEZ Group’s Nuclear Power Plant Construction Department) stated
that the intergovernmental agreement allows more flexibility than a tender and could include the form of financing
(see ČTK 2016a). But in the end, a tender was chosen because it is more transparent and does not require
European Commission approval.
Among the parties included in the discussion was a group of ČEZ minority shareholders representing 30%
of the company’s stock (the remaining 70% is owned by the Ministry of Finance) and were mostly against this
risky investment. One possible solution was to divide the company into smaller firms (se ČTK 2017a). In 2018,
the question of breaking up ČEZ once again arose, with six possible variants. After a SWOT analysis, the option
of the state owing the “dirty” part (including the nuclear, coal, and trade sections of the company) and shareholders
the “green” part was, according to ČEZ, seen to be optimal (see ČTK 2018a).
Discussions continued with the six companies during 2017 on the location of the project and the involvement
of Czech companies. In addition to discussing the financial model, the companies said that they could not envision
the project proceeding without some level of state involvement (see Žižka 2017). Even though the project
received government support, this has consisted only of a declaration of support, since nuclear financing was
considered too risky and the length of time required by legal procedures to approve the project was perceived
to be another obstacle by PM Sobotka (see ČTK 2017b). Moreover, in the middle of January 2017, the Minister of
Finance, Andrej Babiš, stated that as long as he was Minister of Finance, the state would not financially back
a new nuclear unit (see ČTK 2017c). An important milestone for the new nuclear power plant at Dukovany was
the beginning of the EIA process on the 13 November 2017. ČEZ wished to have all administrative documentation
prepared in case the government decided on the financial model (see ČTK 2017d).
The decision process was also influenced by governmental instability. After the autumn elections in 2017,
won by the political party “ANO” of ex-Minister of Finance Andrej Babiš, who became Prime Minister, found
itself unable to form a new government. A second election was held, which ANO once again won, and they
were finally able to form a government on 27 June 2018. This government continued the rhetoric of CSSD from
the previous term.
In March 2018, Jan Štuller, the Special Envoy for Nuclear Energy, said ‘the Standing Committee on Nuclear
Energy supports the financial model of state financing of the new power plant’ (see ČTK 2018c). By contrast, after
the second elections, the new Minister of Trade and Industry, Marta Nováková, replacing Tomáš Hüner in
June 2018, spoke again about an intergovernmental agreement and opposed further state involvement. Also,
the Standing Committee on Nuclear Energy changed its structure and name on 18 February 2019. It was now
called the Standing Committee on New Nuclear Construction and would be chaired by the Prime Minister (instead
of the Minister of Industry and Trade) and the Minister of Industry and Trade and the special envoy for
nuclear energy were to be the two vice-chairpersons of the committee. Membership of the committee was extended
to include the relevant ministers (instead of deputy ministers), representatives of the opposition political
parties, and representatives of the NPP operator – ČEZ to secure broad agreement on all sides (see MPO 2019).
The question of the financial model remained opened until June 2019, four years after approval of the NAPJE.
The tender is now planned to begin by the end of 2020 or the start of 2021 and should not be open for more than
three years. The main criterion will not be only the price according to the new Special Envoy for Nuclear Energy
Jaroslav Míl43
(see ČTK 2019). The first phase is expected to be finalized by 2024, when the result of tender should
be known. The first phase also means obtaining permission from SÚJB and a zoning decision. Since the construction
of a new nuclear unit is far away but the reasons for building it remain, a partial solution in the form of prolonging
the lifetime of Dukovany up to 60 years is being considered.
6.6.4 Opposition to the new nuclear unit
The strongest protest against the first attempt of the Temelín nuclear power plant completion came from
the Green Party, Greenpeace, South Bohemian Mothers, Calla - Association for Preservation of the Environment,
43	Jaroslav Míl was formerly a general director of ČEZ, a. s. and president of the Confederation of Industry of the Czech Republic.
The Nuclear Sector122
the Citizens’ Initiative for Environmental Protection, Green Circle and the DUHA Movement. These organisations
have also been active during the second attempt at completing the Dukovany nuclear power plant.
The idea common to all these organizations are summed up by the words of Martin Sedlák of the DUHA
Movement: “The Czech Republic will make do without additional reactors. Green sources in combination with
the enormous potential of increased efficiency can ensure enough energy for Czech households and industry.
The new nuclear power plant looks like a mere footnote in comparison to these clean solutions. They also have an
indisputable advantage, as the costs of renewables decline. Over the course of a decade, they will be at the heels
of atomic power” (see Jihočeské matky 2011).
Their arguments should definitely be taken into consideration, as one of the pressing issues these organizations
are warning about is the limited liability of the operator running nuclear power plants across the Czech
Republic for nuclear damage. “Should a serious accident occur in Temelín, all affected would together receive
only six billion CZK. ČEZ would in such a case, paradoxically, receive 35 billion CZK from the insurance companies,”
said Sedlák (see Sedlák 2009, p. 31). According to environmental organizations, ČEZ must assume full financial
responsibility for nuclear damage, because the current limit of 8 billion CZK is insufficient and does not
correspond to international conventions (see Jihočeské matky 2011).
According to Edvard Sequens of Calla, “the politicians are looking into a rearview mirror and want to deal with
challenges of the 21st
century with tools of the 20th
century” (see ČTK, 2018c).
South Bohemian Mothers and Calla sued the state, opposing new nuclear power plant construction in Temelín,
first in 2015 and after failure again in 2017 and 2018 because of procedural mistakes by SÚJB and flaws during
the EIA process (see ČTK 2018b).
There is also a strong opposition on the international level from Austria. In 2000, the Austrian parliament passed
a resolution against Temelín and the issue was later discussed at the European level. The solution was the Melk
Protocol of 12 December 2000, increasing cooperation between the two countries and increasing security and environmental
measures. But even though this document improved the cooperation between the two states at the diplomatic
level, Austria is still against any new construction of nuclear units in Europe. This results in many protests,
citizen´s initiatives, and lobbying at the European level for a European nuclear phase-out (Atomausstieg), with no exception.
The Upper Austria region even financially supports Czech non-governmental organizations that are against
nuclear energy (including the DUHA Movement, South Bohemian Mothers, Calla, and others).
Tab. 6.10: Comparison of Some Economic and Environmental Advantages and Disadvantages of Nuclear and Thermal Power Plants
Subject of Comparison Nuclear Power Plant Thermal Power Plant
Fly ash emissions No Only coal power plants
SO2
and NOX
emissions No Yes
Operational spillage of radioactive materials Yes
(small amount)
Yes
(small amount)
Ratio of produced energy per mass unit of fuel 2,100 GJ / kg 0.033 GJ / kg
Costs of fuel transport Low High
Exhaustibility of fuel sources Yes
(later than in the case of fossil fuels)
Yes
Amount of “ash”, or spent fuel Small Great
Costs of spent fuel liquidation High
(mainly resulting from the danger and
necessity of long-term deposition)
High
(mainly resulting from greater volume)
Risk of a significant accident Small Great
Consequences in case of big accident Great Small
Source: Fyzikalni aspekty zatězi zivotniho prostredi, 2008, p. 24; modified by T. Vlcek.
The safety of nuclear power plants has also come under criticism, especially when it comes to spent nuclear
fuel. Table 6.10 clearly illustrates that nuclear power plants are much less risky during regular operation than
thermal plants under conditions of notable energy density. In the event of a major accident, a nuclear power plant
is, nonetheless, unequivocally the riskiest type of power plant and the criticism is here substantiated. The State
Office for Nuclear Safety regularly and strictly monitors existing nuclear power plants.
The Nuclear Sector 123
6.7	 New development in nuclear sector: smaller and modular
Thoughts about a nuclear reactor for every municipality were popular during 1970s and 1980s, when nuclear
technology was expected to be the future of the energy sector. Development, though, went in a different direction,
towards bigger, more efficient units, mostly due to economies of scale. But in the face of current issues in
the sector such as construction delays and rising prices, small modular reactors (SMR) have once again come
under discussion. They are also an interesting option for remote locations.
Though still in the early stages, the number of countries developing their own model is indicative. There are
around 50 SMR designs in development around the world and 20 of these are in the advanced research phase.
Leading countries are the United States, Russia, the United Kingdom, South Korea, China, Canada and Argentina.
According to the IAEA classification, all reactors with installed power of 15–300 MWe are to be considered
small reactors. The main characteristic of SMR is modularity and an integrated system44
. The main idea is to
simplify the technology to allow manufacturing and thus simplifying construction on site. This would also allow
the installed power to the site to be adapted to needs and allow reaction on demand in the future by adding an
additional unit. Also, the exchange of fuel is easier, and some models have longer fuel cycles. It is possible to
build them on a brownfield and is easier to connect them to the grid. This is also a suitable option for power and
heat generation for island operations (see IAEA 2018; ÚJV Řež 2014).
SMRs are supposed to be safer due to passive security measures such as cooling without the need for operator
involvement. Another advantage lies in the smaller installed capacity and lower radiation danger in case of
an accident. The emergency planning zone (EPZ) is also smaller: while the EPZ for a normal unit is 16 km in radius
in the US (around 20 km in Europe), the plan for SMRs calls for 16 hectares in US. In Europe, it has not yet been
specified. To minimize the impact of an accident, some models are planned for underground (NuScale). This requires
that more attention be paid to the geological surface.
From the economic standpoint CAPEX (capital expenditures) are lower and financing is thus easier compared
to normal units. But it is expected that the investment per kW will be higher, at least at the beginning. The price
could decrease as the units are standardized and manufactured, but this is an assumption. The price of current
models is influenced by the technology and the development of new components. Models using known and already
marketed technology are supposed to be competitive (NuScale); models using novel technologies, where
additional research has been done and which are considered FOAK45
(Carem or KLT-40) are not planned at the current
stage, due to bad economics.
In terms of licensing and regulation, SMRs are not treated in Czech regulations or law, nor in the regulations
or law of the European Union. The situation has only been monitored by the EU since 2017 (see EC 2017). IAEA
established a regulatory forum in 2015 and working groups in November 2017. IAEA identified a number of problems
for licensing and design certifications related to the wide number of designs and many possible construction
variants. But in general, SMRs based on marketed technology, with PWR designs, are going to have a shorter
licensing period than SMRs that utilize new technologies. Also, it is possible to expect that models with lower
installed capacity will obtain a license faster (see IAEA 2018). An easier licensing process will have a positive impact
on the final price or SMR model and might increase its competitiveness.
Four of the most developed projects are worth mentioning:
The KLT-40 is a small-scale Russian floating nuclear cogeneration plant. It is a part of the RITM-200 series
reactors developed by Afrikantov OKBM. The unit can generate up to 70 MW of electric energy. This SMR was
already installed on icebreaker Akademik Lomosov at the end of 2018 and is planned to be connected to the grid
in December 2019. It is going to be connected to the coastal infrastructure in Pevek and, after being put into operation,
will replace the Bilibino nuclear plant and Chaunskaya thermal power plant, which are technologically
outdated. Its lifecycle is 40 years, with the option of being extended. The project is FOAK and so far, it is not
competitive on the market due to a high construction and development price (see Rosatom 2018; Rosatom 2019).
Apart from this project, there are several others under development in Russia: ELENA by the Kurchatov Institute
National Research Centre, RUTA-70, KARAT-45 and 100 by NIKIET, and others. Most of these are developed for
the military (see IAEA 2018).
44	Integrated system means that all primary components are in the reactor pressure vessel.
45	First of a kind.
The Nuclear Sector124
Carem 25 is an Argentinian FOAK project, a small pressurized water reactor with an installed capacity
of 25 MWe and 100 MWt. Its lifecycle is 40 years. It is being developed and built by Combustibles Nucleares
Argentinos jointly with other leading nuclear companies in Argentina and coordinated by the National Atomic
Energy Commission. The project was licensed in 2009 and has been under construction since February 2014. It
is located close to Buenos Aires next to the Atucha nuclear power plant, and it is expected to be connected to
the grid in 2020. Following successful operation, Argentina intends to build units (CAREM 100 and CAREM 300)
for domestic use and export (see WNN 2018; Nuclear Engineering International 2018; IAEA 2018, p. 7).
HTR-PM is a Chinese project developed by Tsinghua University. It is a high-temperature gas-cooled reactor
with an installed capacity of 2 × 210 MWe and 2 × 250 MWe. The project has been under construction since
December 2012 in the Shandong area and is expected to be connected to the grid in 2019.
ACP100 is also a Chinese project, developed by China National Nuclear Corporation. It is an integral PWR,
cooled and moderated by light water. With an installed capacity of 125 MWe and 385 Mwt, the ACP100 is based
on existing PWR technology adapting verified passive safety systems (see IAEA 2018, p. 11). Other Chinese projects
include CAP200, DHR, ACPR50S by CGN. Also, Japan and South Korea (SK) are developing their own SMR,
DMS by Hitachi-GE Nuclear Energy and IMR by Mitsibishi Heavy Industries in Japan, as well as SMART by KAERI
in SK (see IAEA 2018).
NuScale, an American project involving a light-water-cooled pressurized-water reactor, developed by NuScale
Power Ic. with installed capacity of 50 MWe and around 160 MWt. The project will likely be licensed in September
2020. The construction period is planned for three years and the first reactor should be connected to the grid
in 2025 in Idaho Falls (see Nuscale n.d.). There are also other projects in the USA, such as SMR160 by Holtec
International or Westinghouse SMR by Westinghouse Electric Corporation (see IAEA 2018).
There is also one SMR model under development in the Czech Republic, called Energy Well, a project of ÚJV
Řež. It is supposed to be a model of the fourth generation, a high temperature reactor cooled by molten salt with
an installed capacity 20 MWt and 8.4 MWe, the size of a shipping container. The fuel cycle is seven years and
the type of fuel is TRISO, enrichment 15% (see Research Centre Řež 2018).
6.7.1 SMRs in the Czech Republic
In 2012–2014 ÚJV Řež, a. s. prepared a study for the Czech Ministry of Industry and Trade, analysing the suitability
of SMRs for the Czech Republic. The study considers the technology to be highly suitable for the country and
selected a list of power plants generating electricity and heat using coal that would be appropriate for replacement
by an SMR. The criterion for inclusion was that it be a heat source burning solid fuels, supplying heat to
a centralized heat system, and with an installed thermal output over 100 MWt. Accordingly, the following sites
were recommended as optimal for such a substitution:
•	 Elektrárna Opatovice – Elektrárna Opatovice, a.s. (9 km from Pardubice),
•	 Elektrárna Melnik I – ČEZ, a. s. (expected in areal EME III),
•	 Elektrárna Porici – ČEZ, a. s. in Trutnov,
•	 Teplárna Komořany – United Energy, a.s. in Most (ÚJV Řež, 2014).
Currently, the discussion of SMRs in the Czech Republic is once again active as a part of the discussion of
a new nuclear unit. Considering the current trend towards decentralisation, an SMR could be used particularly
as an important source of heat in a decentralised system in the future. Optimistic talk (by SMR innovators, construction
companies, and enthusiasts) targets 2030; the more realistic view (of investors, transmission system
operators, and lawmakers) sees it happening around 2050, but only if the technology succeeds on the market.
ČEZ might be considering an SMR in its next tender.
6.8	 Sources
Binnie, I. (2019). Spain plans to close all nuclear plants by 2035. Reuters, 13.2.2019. Retrieved from:
https://​www​.reuters​.com​/article​/us​-spain​-energy​/spain​-plans​-to​-close​-all​-nuclear​-plants​-by​-2035​
-idUSKCN1Q212W
Budín, J. (2015). Sobotka: První nový jaderný blok vyroste v Dukovanech. OEnergetice.cz, 24.5.2015. Retrieved
from: https://​oenergetice​.cz​/elektrina​/rozhodnuto​-prvni​-novy​-jaderny​-blok​-vyroste​-v-dukovanech/.
The Nuclear Sector 125
Cieslar, S. (2010e, August 19). „Zlepšujeme využití jaderného paliva,“ uvedl v rozhovoru pro časopis All for
Power Ing. Tomáš Žák, ředitel Jaderné elektrárny Dukovany. All for Power. Retrieved from
http://​www​.allforpower​.cz​/clanek​/zlepsujeme​-vyuziti​-jaderneho​-paliva/
CVVM (2018). Veřejnost o jaderné energetice – květen 2018. Centrum pro výzkum veřejného mínění, May 2018.
Retrieved from https://​cvvm​.soc​.cas​.cz​/media​/com​_form2content​/documents​/c2​/a4717​/f9​/oe180913b​.pdf
ČEZ, a. s. (n.d.a). Jaderné elektrárny ČEZ. Retrieved from www​.cez​.cz
ČEZ, a. s. (n.d.d). Správa vyhořelého jaderného paliva. Retrieved from www​.cez​.cz
ČEZ, a. s., (n. d.). Generation, Mining, Construction. Retrieved from: https://​www​.cez​.cz​/edee​/content​
/micrositesutf​/odpovednost2011​/en​/environment​/vyroba​-tezba​-a-vystavba​.html
ČEZ, a. s., (n.d.b). JE Temelín - Hlavní technické údaje. Retrieved from http://​www​.cez​.cz/
ČEZ, a.s. (2011a): Zátěžové testy JE - ČEZ, a.s., Ocenění bezpečnosti a bezpečnostních rezerv JE Dukovany
(z pohledu skutečností havárie na JE Fukushima). Retrieved from http://​www​.cez​.cz​/edee​/content​/file​
/energie​-a-zivotni​-prostredi​/dukovany​/zaverecna​-zprava​-zt​-edu​.pdf
ČEZ, a.s. (2011b): Zátěžové testy JE - ČEZ, a.s., Ocenění bezpečnosti a bezpečnostních rezerv JE Temelín
(z pohledu skutečností havárie na JE Fukushima). Retrieved from http://​www​.cez​.cz​/edee​/content​/file​
/energie​-a-zivotni​-prostredi​/temelin​/zaverecna​-zprava​-zt​-ete​.pdf
ČEZ, a.s. (n.d.). Energetika v ČR. Retrieved from http://​www​.cez​.cz​/cs​/pro​-media​/cisla​-a-statistiky​/energetika​
-v-cr​.html
ČTK (2016a). ČEZ: Mezivládní dohoda je pro dostavbu jádra jednodušší než tendr. OEnergetice.cz, 31.10.2016.
Retrieved from: https://​oenergetice​.cz​/rychle​-zpravy​/cez​-mezivladni​-dohoda​-je​-pro​-dostavbu​-jadra​
-jednodussi​-nez​-tendr/
ČTK (2016b). O stavbu jaderných bloků v ČR se zajímá 6 společností včetně Rusů a Číňanů. OEnergetice.cz,
1.11.2016. Retrieved from: https://​oenergetice​.cz​/elektrarny​-cr​/o-stavbu​-jadernych​-bloku​-v-cr​-se​-zajima​
-6-spolecnosti​-vcetne​-rusu​-a-cinanu/
ČTK (2017a). Ministr Mládek hodnotí úvahy o rozdělení ČEZu kladně. OEnergetice.cz, 3.2.2017. Retrieved from:
https://​oenergetice​.cz​/elektrina​/ministr​-mladek​-hodnoti​-mozne​-rozdeleni​-cezu​-kladne/.
ČTK (2017b). Sobotka: Investice do jádra by vytvořily příjmy po desítky let, jsou ale rizikové. OEnergetice.cz,
21.2.2017. Retrieved from: https://​oenergetice​.cz​/elektrarny​-cr​/sobotka​-investice​-do​-jadra​-by​-vytvorily​
-prijmy​-po​-desitky​-let​-jsou​-ale​-rizikove/
ČTK (2017c). Havlíček: Nelze říct, že tato vláda rozhodne o financování jaderného bloku. OEnergetice.cz,
23.3.2017. Retrieved from https://​oenergetice​.cz​/rychle​-zpravy​/havlicek​-nelze​-rict​-ze​-tato​-vlada​-rozhodne​
-o-financovani​-jaderneho​-bloku/
ČTK (2017d). ČEZ předal podklady pro posouzení vlivu dostavby Dukovan na životní prostředí. OEnergetice.
cz, 13.11.2017. Retrieved from https://​oenergetice​.cz​/elektrarny​-cr​/cez​-predal​-podklady​-pro​-posouzeni​-vlivu​
-dostavby​-dukovan​-na​-zivotni​-prostredi/
ČTK (2018a). Navrhovaný způsob rozdělení ČEZ dává smysl, míní většina analytiků. OEnergetice.cz, 1.2.2018.
Retrieved from https://​oenergetice​.cz​/rychle​-zpravy​/navrhovany​-zpusob​-rozdeleni​-cez​-dava​-smysl​-mini​
-vetsina​-analytiku/
ČTK (2018b). Žaloba kvůli dostavbě Temelína půjde opět k soudu. Nejvyšší správní soud zrušil původní
rozhodnutí. OEnergetice.cz, 8.2.2018. Retrieved from https://​oenergetice​.cz​/elektrarny​-cr​/zaloba​-kvuli​
-dostavbe​-temelina​-pujde​-opet​-k-soudu​-nejvyssi​-spravni​-soud​-zrusil​-puvodni​-rozsudky/
ČTK (2018c). Nové jaderné bloky by měl podle expertů z výboru financovat stát. OEnergetice.cz, 26.3.2018.
Retrieved from https://​oenergetice​.cz​/rychle​-zpravy​/nove​-jaderne​-bloky​-by​-mel​-podle​-expertu​-z-vyboru​
-financovat​-stat/
ČTK (2019). Temelín začne zavážet palivo, zkusí i soubory od Westinghouse. 4.4.2019. Retrieved from
https://​www​.ceskenoviny​.cz​/zpravy​/temelin​-zacne​-zavazet​-palivo​-zkusi​-i-soubory​-od​-westinghouse​
/1741164
ČTK, (2019). Temelín začne zavážet palivo, zkusí i soubory od Westinghouse. 4.4.2019. Retrieved from
https://​www​.ceskenoviny​.cz​/zpravy​/temelin​-zacne​-zavazet​-palivo​-zkusi​-i-soubory​-od​-westinghouse​
/1741164
ČTK, iDNES.cz, (2017). Čtyři území vhodná pro úložiště jaderného odpadu jsou znovu ve hře. 10.11.2017.
Retrieved from https://​www​.idnes​.cz​/ekonomika​/domaci​/pruzkum​-hlubinne​-uloziste​-jaderneho​-odpadu​
-richard​-brabec​-ministerstvo​-zivotniho​-prostredi​.A171110​_162657​_ekonomika​_fer
The Nuclear Sector126
Dehusse, F. (2014). The nuclear safety framework in the European Union after Fukushima. Egmont paper 73,
published on December 2014. Retrieved from http://​aei​.pitt​.edu​/63581​/1/73​.pdf
Denková, A. et al. (2017). V4 energy security: The land of nuclear and coal. Euractive.com. 16.3.2018. Retrieved
from https://​www​.euractiv​.com​/section​/electricity​/news​/v4​-energy​-security​-the​-land​-of​-nuclear​-and​-coal/
DIAMO s. p. (2010). DIAMO, státní podnik výroční zpráva 2009. Retrieved from http://​www​.diamo​.cz/
DIAMO, státní podnik Stráž pod Ralskem. n.d. Retrieved from http://​www​.diamo​.cz/
EC (2017). Commission Staff Working Document, Accompanying the document Communication from
the Commission. Nuclear Illustrative Programme Presented under Article 40 of the Euratom Treaty - Final
(after opinion of EESC). 12.5.2017. Retrieved from https://​ec​.europa​.eu​/energy​/sites​/ener​/files​/documents​
/pinc​_staff​_working​_document​_.pdf
EC (n.d.) Nuclear Energy. Retrieved from https://​ec​.europa​.eu​/energy​/en​/topics​/nuclear​-energy
Energetický regulační úřad. (2010b). Roční zpráva o provozu ES ČR 2009 – ERÚ. Retrieved from
http://​www​.eru​.cz​/user​_data​/files​/statistika​_elektro​/rocni​_zprava​/2009​/index​.html
Eurostat (2019). Nuclear energy statistics. Data from February 2019. Retrieved from https://​ec​.europa​.eu​
/eurostat​/statistics​-explained​/index​.php​/Nuclear​_energy​_statistics
Fyzikální aspekty zátěží životního prostředí (2008). Studijní text pro kurz Fyzikální aspekty zátěží životního
prostředí, Katedra fyziky Přírodovědecké fakulty Ostravské univerzity. Retrieved from
http://​artemis​.osu​.cz:​8080​/artemis​/uploaded​/212​_FAEZP​%20v10​%20k​%209​.12​.08​.pdf
IAEA (2018). Advances in Small Modular Reactor Technology Developments. A Supplement to: IAEA Advanced
Reactors Information System (ARIS), 2018 Edition. September 2018. Retrieved from https://​aris​.iaea​.org​
/Publications​/SMR​-Book​_2018​.pdf.
IAEA (2018). Deployment Indicators for Small Modular Reactors. International Atomic Energy Agency Vienna,
2018. Retrieved from https://​www​-pub​.iaea​.org​/MTCD​/Publications​/PDF​/TE​-1854web​.pdf
IEA (2019). Nuclear Power in a Clean Energy System. May 2019. Retrieved from https://​webstore​.iea​.org​
/nuclear​-power​-in​-a-clean​-energy​-system
INB (2018). Brazil increases by 25% the production of enriched uranium. 10.9.2018. Retrieved from http://​
www​.inb​.gov​.br​/en​-us​/Detalhe​/Conteudo​/brazil​-increases​-by​-25​-the​-production​-of​-enriched​-uranium​
?Origem=%5BOrigem​%5D
International Atomic Energy Agency. n.d. Retrieved from http://​www​.iaea​.org/
Janouš, V., (2019). Kam s ním? Boj státních institucí o úložiště jaderného odpadu eskaluje. 27.4.2019. Retrieved
from https://​www​.idnes​.cz​/zpravy​/domaci​/jaderny​-odpad​-kam​-s-nim​-kravi​-hora​-instituce​.A190426​_114048​
_domaci​_kuce
Jihočeské matky. (2007). Otevřený dopis představenstvu a dozorčí radě společnosti ČEZ. Retrieved from
http://​www​.jihoceskematky​.cz/
Jihočeské matky. (2011). Společná tisková zpráva: Rozdrtí ekonomická analýza atomové sny? Retrieved from
http://​www​.jihoceskematky​.cz/
Jirušek, M., Vlček, T., Koďousková, H., Robinson, R. W., Leshchenko, A., Černoch, F., Lehotský, L., Zapletalová, V.
(2015). Energy Security in Central and Eastern Europe and the Operations of Russian State-Owned Energy
Enterprises. Brno: Masarykova univerzita. ISBN 978-80-210-8048-5. https://​doi​.org​/10​.5817​/CZ​.MUNI​.M210​
-8048​-2015
Lejtnarová, P. (2017). Čihadlo se bouří. Úložiště radioaktivního odpadu je stále ve hře.
Ceskobudejovicky.denik.cz. 17.11.2017 Retrieved from https://​ceskobudejovicky​.denik​.cz​/zpravy​_region​
/cihadlo​-se​-bouri​-uloziste​-radioaktivniho​-odpadu​-je​-stale​-ve​-hre​-20171117​.html
Macková, K. (2011, May 19). Nečas: Zátěžové testy jaderných elektráren by neměly řešit teroristické útoky.
EuroZpravy.cz. Retrieved from http://​domaci​.eurozpravy​.cz​/politika​/27890​-necas​-zatezove​-testy​-jadernych​
-elektraren​-by​-nemely​-resit​-teroristicke​-utoky/
Ministerstvo průmyslu a obchodu (2014). State Energy Policy of the Czech Republic. December 2014. Retrieved
from: https://​www​.mpo​.cz​/assets​/dokumenty​/52841​/60946​/636123​/priloha001​.pdf
Ministerstvo průmyslu a obchodu (2018). Hlubinné úložiště jaderného odpadu Česká republika potřebuje.
Vybrat pro něj lokalitu se musí otevřeně, rozumně a včas. 7.6.2018. Retrieved from: https://​www​.mpo​.cz​
/cz​/rozcestnik​/pro​-media​/tiskove​-zpravy​/hlubinne​-uloziste​-jaderneho​-odpadu​-ceska​-republika​-potrebuje​
--vybrat​-pro​-nej​-lokalitu​-se​-musi​-otevrene​--rozumne​-a-vcas​----237667/
The Nuclear Sector 127
Ministerstvo průmyslu a obchodu (2019). New Statute of Standing Committee for New Nuclear Build. Ministry
of Trade and Industry. 8.4.2019. Retrieved from: https://​www​.mpo​.cz​/en​/energy​/new​-nuclear​-build​/standing​
-committee​-on​-new​-nuclear​-build​/new​-statute​-of​-standing​-committee​-for​-new​-nuclear​-build​--245236/
Ministerstvo průmyslu a obchodu (2004). SEK 2004 – Státní energetická koncepce ČR. Retrieved from
http://​www​.europeangreencities​.com​/pdf​/activities​/ConfJun2005​/Czech​/2.%20ST​%C3​%81TN​%C3​%8D​
%20ENERGETICK​%C3​%81​%20KONCEPCE​.pdf
Ministerstvo průmyslu a obchodu. (2012). Aktualizace Státní energetické koncepce České republiky – srpen
2012. Retrieved from https://​mpo​.cz​/assets​/cz​/2012​/11​/ASEK​.pdf
Minin, N., Vlček, T. (2018). Post-Fukushima performance of the major global nuclear technology providers.
Energy Strategy Reviews, Amsterdam: Elsevier Ltd., vol. 2018, no. 21, p. 98-110. ISSN 2211-467X.
doi: 10.1016/j.esr.2018.05.006.
Ministerstvo životního prostředí / Česká geologická služba - Geofond. (2010). Surovinové zdroje České
republiky – nerostné suroviny (Statistické údaje do roku 2009). Praha: Česká geologická služba – Geofond.
Retrieved from http://​www​.geology​.cz​/extranet​/publikace​/online​/surovinove​-zdroje​/SUROVINOVE​-ZDROJE​
-CESKE​-REPUBLIKY​-2010​.pdf
Ministerstvo životního prostředí / Česká geologická služba - Geofond. (2012). Surovinové zdroje České
republiky – nerostné suroviny (Statistické údaje do roku 2011). Praha: Česká geologická služba – Geofond.
Retrieved from http://​www​.geology​.cz​/extranet​/publikace​/online​/surovinove​-zdroje​/SUROVINOVE​-ZDROJE​
-CESKE​-REPUBLIKY​-2012​.pdf
NAPJE (2015). National Action Plan for the Development of the Nuclear Energy Sector in the Czech Republic.
Ministry of Trade and Industry and Ministry of Finance. 22.5.2015. Retrieved from https://​www​.mpo​.cz​
/assets​/en​/energy​/electricity​/nuclear​-energy​/2017​/10​/National​-Action​-Plan​-for​-the​-Development​-of​-the​
-Nuclear​-_2015​_.pdf
Nuclear Engineering International (2018). Progress for Argentina’s CAREM SMR. 9. 3. 2018. Retrieved from
https://​www​.neimagazine​.com​/news​/newsprogress​-for​-argentinas​-carem​-smr​-6144828.
NuScale (n.d.). Technology overview. Retrieved from https://​www​.nuscalepower​.com​/technology​/technology​
-overview
OECD Nuclear Energy Agency (2018). Uranium 2018 Resources, Production and Demand, Czech Republic.
Nuclear Energy Agency Organisation for Economic Co-Operation and Development. Retrieved from
http://​www​.oecd​-nea​.org​/ndd​/pubs​/2018​/7413​-uranium​-2018
Ocelík, P., Osička, J., Zapletalová, V., Černoch, F., Dančák, B. (2017). Local opposition and acceptance of
a deep geological repository of radioactive waste in the Czech Republic: A frame analysis. Energy Policy,
Amsterdam: Elsevier Ltd., Vol. 105, p. 458-466. ISSN: 03014215. https://​doi​.org​/10​.1016​/j.enpol​.2017​.03​.025
Research Centre Řež (2018). Energy Well. April 2018. Retrieved from https://​www​.ujv​.cz​/file​/edee​/2018​/04​/ew​
_pl​_cz​.pdf
Rosatom (2018). The world’s only floating nuclear power unit (FPU) ‘Academik Lomonosov’. 25.4.2018.
Retrieved from https://​www​.rosatom​.ru​/en​/press​-centre​/news​/the​-world​-s-only​-floating​-power​-unit​
-akademik​-lomonosov​-takes​-the​-sea/
Rosatom (2019). World’s only floating nuclear power unit to begin commercial operations in Russia. 24.4.2019.
Retrieved from https://​www​.rosatom​.ru​/en​/press​-centre​/news​/world​-s-only​-floating​-nuclear​-power​-unit​-to​
-begin​-commercial​-operations​-in​-russia/
Správa úložišť radioaktivních odpadů. (n.d.) Retrieved from http://​www​.rawra​.cz/
Stálá mise České republiky ve Vídni. (2010). MAAE – Mezinárodní agentura pro atomovou energii. Retrieved
from http://​www​.mzv​.cz​/mission​.vienna​/cz​/index​.html
Státní báňská správa České republiky. (n.d.) Retrieved from http://​www​.cbusbs​.cz/
Státní úřad pro jadernou bezpečnost. (n.d.a). ČR přistoupila k trojstranným zárukovým dohodám. Retrieved
from http://​www​.sujb​.cz/
Státní úřad pro jadernou bezpečnost. (n.d.b). Hodnotící konference ve Vídni potvrdila vysokou úroveň jaderné
bezpečnosti v ČR. Retrieved from http://​www​.sujb​.cz/
Státní úřad pro jadernou bezpečnost. (n.d.) Retrieved from http://​www​.sujb​.cz
Státní ústav radiační ochrany, v. v. i. (n.d.) Retrieved from http://​www​.suro​.cz/
SÚRAO. (n.d.). Financování. Retrieved from: https://​www​.surao​.cz​/o-nas​/financovani/
The Nuclear Sector128
Szalai, P. (2013). Nuclear energy: The Visegrad exception and how to develop It. 25.2.2013. Retrieved from
http://​visegradrevue​.eu​/nuclear​-energy​-the​-visegrad​-exception​-and​-how​-to​-develop​-it/
Szalai, P. (2018). Foratom: ‘Balance of power in the EU is shifting against nuclear’. Euractive.com. 23.11.2018.
Retrieved from https://​www​.euractiv​.com​/section​/energy​/interview​/foratom​-balance​-of​-power​-in​-the​-eu​-is​
-shifting​-against​-nuclear/
Ševeček, M. (2015). Jaký je aktuální vývoj a trendy v české jaderné energetice? OEnergetice.cz, 7.10.2015.
Retrieved from https://​oenergetice​.cz​/elektrina​/jaky​-je​-aktualni​-vyvoj​-a-trendy​-v-ceske​-jaderne​-energetice/
The European Nuclear Safety Regulators Group. (n.d.) Retrieved from http://​www​.ensreg​.org/
ÚJV Řež (2014). Vhodnost SMR pro ČR (zpráva ÚJV Řež, a. s. pro MPO 2012-2014).
Úřad vlády ČR & Nezávislá energetická komise. (2008, September 30). Zpráva Nezávislé odborné komise pro
posouzení energetických potřeb České republiky v dlouhodobém časovém horizontu. Retrieved from
http://​www​.vlada​.cz​/assets​/ppov​/nezavisla​-energeticka​-komise​/aktuality​/zpravanek081122​.pdf
Vláda České republiky. (2010a, August 4). Programové prohlášení vlády. Retrieved from http://​www​.vlada​.cz/
Vlček, T. (2016). Critical assessment of diversification of nuclear fuel for operating VVER reactors in the EU.
Energy Strategy Reviews, Amsterdam: Elsevier Ltd., vol. 13-14, NOV 2016, p. 77-85. ISSN 2211-467X.
https://​doi​.org​/10​.1016​/j.esr​.2016​.08​.006
Voříšek, M. (2015). Dostavba Dukovan by měla být před Temelínem. OEnergetice.cz, 25.4.2015. Retrieved from
https://​oenergetice​.cz​/elektrina​/dostavba​-dukovan​-by​-mela​-byt​-pred​-temelinem/.
WNA (2019). Finland: Waste management. Updated March 2019. Retrieved from http://​www​.world​-nuclear​.org​
/information​-library​/country​-profiles​/countries​-a-f​/finland​.aspx
WNA (2019a). Nuclear Power in Czech Republic. Updated April 2019. Retrieved from
http://​www​.world​-nuclear​.org​/information​-library​/country​-profiles​/countries​-a-f​/czech​-republic​.aspx
WNA (2019b). Nuclear Fuel Cycle. April 2019. Retrieved from http://​www​.world​-nuclear​.org​/information​-library​
/Nuclear​-Fuel​-Cycle​/Nuclear​-Power​-Reactors​/small​-nuclear​-power​-reactors​.aspx
WNFF (2018). World Nuclear Fuel Facilities: Uranium Hexafluoride Conversion Facilities. Updated October
2018. Retrieved from https://​www​.wise​-uranium​.org​/efac​.html
WNN (2018). Argentina reaches generator milestone for CAREM-25. 8.5.2018. Retrieved from
http://​www​.world​-nuclear​-news​.org​/NN​-Argentina​-reaches​-generator​-milestone​-for​-CAREM​-25​-08051801​.html
Zákon 458/2000 ze dne ze dne 28. listopadu 2000 o podmínkách podnikání a o výkonu státní správy
v energetických odvětvích a o změně některých zákonů (energetický zákon). Retrieved from
http://​portal​.gov​.cz​/wps​/WPS​_PA​_2001​/jsp​/download​.jsp​?s=​1​&​l​=​458​%2F2000
Zákon ze dne 24. ledna 1997 o mírovém využívání jaderné energie a ionizujícího záření (atomový zákon)
a o změně a doplnění některých zákonů. Retrieved from http://​www​.epravo​.cz​/top​/zakony​/sbirka​-zakonu​
/zakon​-o-mirovem​-vyuzivani​-jaderne​-energie​-a-ionizujiciho​-zareni​-atomovy​-zakon​-a-o​-zmene​-a-doplneni​
-nekterych​-zakonu​-13694​.html
Závěšický, J. (2005). Smlouva o nešíření jaderných zbraní (NPT). In Kuchyňková, P., & Suchý, P.( Eds.), Vývoj
a výsledky procesů kontroly zbrojení a odzbrojování - Marnost nad marnost? (pp. 131-162). Brno: MPÚ.
Žižka, J. (2017). Ján Štuller: Jednáme o sedmi typech reaktorů jak pro Dukovany, tak pro Temelín. OEnergetice.
cz, 20.2.2017. Retrieved from https://​oenergetice​.cz​/elektrarny​-cr​/jan​-stuller​-jedname​-sedmi​-typech​
-reaktoru​-dukovany​-temelin/
Renewables 129
Chapter 7: Renewables
Tomáš Vlček, Eliška Trmalová
7.1	 Introduction
“Renewable natural resources have the ability, when gradually consumed, to be restored partially or completely
by themselves or with man’s contribution. Non-renewable natural resources perish with consumption” (viz “Zákon
č. 17/1992 Sb.”). This is the definition of renewables as amended by the Czech environmental legal framework.
The renewable energy sector is by far the oldest in the world, with a history dating back to the Stone Age, when
people initially started to combust biomass to heat and light the space they lived in. On the other hand, except
for hydroelectric power plants, renewables represent a young, relatively new sector with perhaps the greatest
pace of development, reacting to the world trend of fighting climate change, protecting the environment, reducing
harmful greenhouse gas emissions and increasing energy self-sufficiency by limiting the import of energy
materials. Although the research, development and increasing use of renewables had been recorded throughout
the twentieth century, not before the 1990s did the renewables sector start to truly develop.
Activity related to climate change and environmental protection issues may be seen as the primary driver for
this massive development. Issues related to a lack of fossil fuels and projections that the hydrocarbon era would
come to a close by the 21st
century (coal, oil, and natural gas depletion) also played a role. The terms for renewables
development are de facto determined and to the greatest extent impacted by the United Nations and, eventually,
by the European Union. The basic terms set by these organizations are then addressed by single states,
energy sectors, and private entities.
In the renewable energy sector, one may generally distinguish two policies, namely a low carbon policy and
an environmental policy. A low carbon policy does not a priori reject different and fossil energy sources, but rather
tends to move toward adapting the present power industry so that it approximates the low carbon principle
as closely as possible, that is so that it achieves minimum production of CO2
as the main greenhouse gas. This
policy does not exclude (or even advocates) the use and development of nuclear energy as an emission-free
source.1
Renewable sources of energy may have different levels of perceived importance, but they are always
seen as more or less complementary alongside primary sources. A perfect example of this policy is that of France.
The country’s environmental policy highlights renewable energy and essentially removes fossil fuels from any further
consideration. A complete shift to renewables appears as an evident interest indicated by this policy, while
the existing obstacles emerge in the form of the permanent nature of human knowledge and technology, technical
aspects, and finances. The policy on renewables is demonstrated by transition in Norway and Germany.
The CzechRepublicpropagatesa lowcarbonpolicyinanunambiguousmanner,primarilyforeconomic reasons.
According to the definition in the Czech legal framework (in Act No. 165/2012 Coll. on Promoted Energy Sources
and on Amendment to Some Laws), “renewable sources are understood as renewable non-fossil natural sources
of energy, namely wind energy, solar energy, geothermal energy, water energy, soil energy, air energy, biomass
energy, landfill gas energy, sludge gas energy from wastewater treatment and biogas energy” (viz “Zákon
č. 165/2012 Sb.”). The further text of this chapter will convey the understanding and classification of renewables
as amended by the previously cited legal act.
1		 Meant in the field of evaluated types of emission, excluding water steam which is, naturally, the most extensive greenhouse gas.
Renewables130
7.2	 Renewables Use for Electricity and Heat Generation
Hydroelectric power plants (HEPP), pumped-storage hydropower plants (PSHPP), solar power plants and wind
power plants are renewable sources of energy in the Czech Republic used for power generation, while solar collectors,
biomass, biogas2
and geothermal power plants serve for the generation of heat.
The operation of hydroelectric power plants and pumped-storage hydropower plants is the most environmentally
friendly3
. We divide hydropower plants into hydroelectric power plants, small hydroelectric power plants4
,
pumped-storage hydropower plants and tidal power plants (not present in the Czech Republic). Power production
is a simple process based on a gradient water flow that spins a turbine sharing the shaft with an electrical
generator. The kinetic energy of the flowing water is converted into electrical energy and delivered to consumption
points (see Hydroelectric power Plants in the Czech Republic).
Pumped-storage hydropower plants have the advantage that they can store electricity. Pumped-storage hydropower
plants have two tanks, an upper and a lower. During a regular daily regime or at peaks of performance,
the plant produces a gradient water flow in which water from the upper tank falls through penstock to the tank
below and thereby spins the turbine5
. If there is a surplus of electrical power left in the electrical network (mainly
at night), water is drawn from the bottom tank towards the upper tank and is usable for further take-off during
daytime peaks. It is necessary to have a regular water supply for the lower tank due to evaporation and leaks.
In 2017, there were 1,090 MWe installed in hydroelectric power plants and 1,146 MWe in pumped-storage power
plants in the Czech Republic. Hydroelectric power plants have a 5 % share in the total installed capacity in
the country, with pumped-storage power plants having another 5 % (see ERÚ, 2018, p.25). Approximately 70 %
of these hydroelectric power plants and 100 % of the pumped-storage power plants belong to ČEZ. The largest
hydroelectric power plants are Orlík (364 MWe), Slapy (144 MWe), Lipno I (120 MWe), Kamýk (40 MWe), and
Štěchovice I (22.5 MWe), all owned by ČEZ. The largest hydroelectric power plants not belonging to the company
are MVE Střekov (19.5 MWe) and MVE Práčov (9.75 MWe), owned by its subsidiary ČEZ Obnovitelné zdroje, s. r. o.,
MVE Vranov nad Dyjí (18.9 MWe) and MVE Vír I (7.1 MWe) owned by E.ON Trend, s. r. o., MVE Nechranice (10 MWe)
belonging to the state company Povodí Ohře, MVE Štvanice (5.67 MWe) of the state company Povodí Vltavy, and
MVE Meziboří (7.6 MWe) owned by ENERGO - PRO Czech, s. r. o. (see ERÚ, 2010b, p. 90–91, in 2019 still correct).
There are only four pumped storage hydroelectric power plants in the Czech Republic and all of them belong
to the ČEZ Group. These are the Dlouhé Stráně power plant (650 MWe), the Dalešice power plant (450 MWe),
the Štěchovice II power plant (45 MWe) and the Černé Jezero I power plant (1.5 MWe). The first three belong to
ČEZ and the latter to ČEZ Obnovitelné zdroje, s. r. o.
Solar power plants6
have a 9 % (2,069.5 MWe) share of the entire installed capacity (see ERÚ, 2018, p. 25). Solar
power plants acquire energy as a result of the photovoltaic effect, the process which converts solar radiation
into electricity7
. The capacity of photovoltaic cells is expressed in kWp (kilowattpeak), designating the maximum
possible (peak) capacity of a photovoltaic power plant under laboratory solar conditions.
Generally, 1 kWp occupies 8–10 m2
of surface area and (under ideal conditions) produces approximately 1 MWh of
electricity per year (see “Fotovoltaika,” n.d.). A photovoltaic power plant runs even in the absence of direct sunlight,
for example, in shadow, however efficiency is in that case considerably lower. The intensity of solar radiation falling
2	 Biomass and Biogas are usually used for cogeneration of heat and electricity
3	 Of course we need to take into account construction work that impacts on the surrounding environment. However, in terms of operation,
it is a very environmentally friendly source.
4	 A hydroelectric power plant with less than 10 MW of installed capacity.
5	 For example, the Dlouhé Stráně power plant with 650 MWe of installed capacity has a 534.3 metre fall between the upper tank with
2,580,000 m3
of volume and the bottom tank with 3,405,000 m3
. A comparison with the Chinese hydroelectric power plant Three
Gorges Dam (San-sia Ta-pa) might be interesting here, having a 113 m fall and 26 × 852 MWe of installed capacity, which is all together
22,152 MWe, while active capacity amounts to 18,460 MWe (26 × 710 MWe). There are, moreover, another six 710 MWe units being built
at the site. Once they are online, active capacity will reach 22,720 MWe, which is more than the entire capacity installed in all power
plants in the Czech Republic.
6	 Solar power plants are basically split into photovoltaic power plants, using photons to produce power, and solar heating power plants,
which use solar thermal energy to heat a thermal transmitting medium for further use (heating water, power production, etc.).
7		 The particles of light, photons, fall on a cell and “boot” electrons out of it. The semiconductor structure of a cell then regulates
the movement of electrons as utilizable direct current (see Beranovský a kol., 2007).
Renewables 131
on 1 m2
at the height of the atmospheric boundary (800 km) is 1,360 W/m2
per second. This value is named the solar
constant and describes the limits of solar energy. While passing through the atmosphere, part of the energy is reflected,
and part is absorbed and scattered, striking the Earth’s surface both directly and as scattered (diffusive) and
radiation reflected from the clouds. When skies are clear, the capacity of solar radiation at the Earth’s surface does
not exceed 1 kW/m2
. When skies are cloudy, only scattered radiation is present, striking with a considerably lower
(approximately 10 times lower) intensity (see Murtinger, 2008). The following table, Table 7.1, and the map provide insight
into solar irradiance in the Czech Republic on a daily (angle of 40° south) and yearly basis (horizontal surface).
Tab. 7.1: The Amount of Solar Energy in the Czech Republic Striking a Square Metre of Surface Bent at an Angle of 40° South
(Wh/m2
/day)
I II III IV V VI VII VIII IX X XI XII Year
Praha 1,228 2,027 3,034 4,149 4,846 4,644 4,930 4,577 3,475 2,729 1,140 833 3,141
Brno 1,247 2,111 3,163 4,262 4,953 4,877 5,211 4,774 3,679 2,918 1,309 872 3,288
Plzeň 1,238 2,087 3,036 4,147 4,755 4,618 4,975 4,604 3,587 2,735 1,182 828 3,155
Ostrava 1,321 2,138 2,990 3,890 4,689 4,556 4,916 4,471 3,370 2,858 1,372 976 3,135
Břeclav 1,343 2,204 3,315 4,429 5,046 5,100 5,411 4,925 3,990 2,975 1,441 935 3,433
Aš 1,255 2,215 2,941 4,180 4,662 4,431 4,837 4,459 3,544 2,639 1,327 840 3,115
Ústí n. L. 1,231 2,080 2,956 4,063 4,788 4,507 4,751 4,405 3,365 2,677 1,207 841 3,078
Source: European Commission – Joint Research Centre, n.d.
Tab. 7.2: Yearly sum of global irradiation on horizontal surfaces in the Czech Republic
Source: European Commission – Joint Research Centre, n.d.
The average daily amount of solar energy, for example, in Brno is 3,288 Wh/m2
, which is 3.288 kWh/m2
. The other
limitation of solar panels is their efficiency which currently resides at values of around 15%. Therefore, a square
metre of solar panels can, under ideal conditions and a given efficiency, produce approximately 180 kWh yearly.
This low capacity is enhanced by adding a surface of solar panels; the massive production of power and its
transmission to the electrical network has given rise to solar parks, which are photovoltaic power plants with
higher capacities (above 500 kWp).
Renewables132
The bestknownsolarparksinthe CzechRepublicareOstrožskáLhota(0.702MWp)andBušanovice I (0.693 MWp).
In terms of the number of projects, the most successful company is Photon Energy8
, which as of July, 2016, owned
and ran projects in the range of 93.8 MWp, for example Brno-Tuřany 21.2 MWp (see “Photon Energy”). Energy 21
Group is another example of a successful company operating solar power plants in Divčice 2.9 MWp, Rozvadov
2.9 MWp, Držovice 3 MWp, Určice IV 3.4 MWp, Tasov 3.2 MWp, Bojkovice 4.1 MWp, Kojetín 4 MWp, etc. Czech and
foreign investment groups and banking institutions also participate in the realization of the projects (see Vinšová,
2009). ČEZ Obnovitelné zdroje, s. r. o. also owns several solar power plants, for example, Bežerovice (3.013 MWp),
Buštěhrad (2.396 MWp), Čekanice (4.48 MWp), Hrušovany (3.73 MWp), Žabčice (5.6 MWp) and Chýňov (2.009
MWp) (see ČEZ, a. s., “Provozované fotovoltaické elektrárny”). Hundreds of other firms and households build,
install and run solar power plants.
The very first solar power plant in the Czech Republic was the photovoltaic power plant Mravenečník in
Jeseníky, which was built in 1997 by ČEZ with 10 kWe of installed capacity. In 2003, it was moved to the site of
the Dukovany nuclear power plant, where it produces electricity to this day. The largest solar plant in the Czech
Republic is the photovoltaic power plant Ralsko Ra 1 with 38.3 MWp of installed capacity9
. Since 2010, the plant
has been in the ownership of ČEZ, which bought it from eEnergy Ralsko, a. s. (see “Největší solární elektrárny,”
2010, still valid in 2019). The second largest power plant is the Vepřek photovoltaic power plant with 35.1 MWp.
It was built by Decci, a. s., which in February 2010, by closing an agreement on in-kind contribution of business,
placed the operation of the Vepřek power plant and the Vraňany transmitting station into the main capital of FVE
CZECH NOVUM, s. r. o., owned by the companies Decci, a. s., (63 %) and Berlanga Uzbekistan B.V. (37 %). In 2014,
Berlanga Uzbekistan B.V. sold its share to a Dutch-based company, PH ENERGY B.V. Finally, the third largest power
plant is the Ševětín photovoltaic power plant, belonging to ČEZ.
Wind power plants are power plants which produce electricity by utilizing the flux of air. The air spins propeller
blades attached to an electrical power generator. Wind power plants require a region with an average wind speed
higher than 6 m/s, which is fairly rare in the Czech Republic (Tab 7.3 below shows the average wind speed in hundreds
of meters to better illustrate how few windy areas there are). The regions in the Czech Republic that qualify as adequate
sites for building wind power plants are Krušnohorsko, Jesenicko and Českomoravská vrchovina. Some locations
in these regions revertheless cannot be exploited since they qualify as protected areas (see Poncarová, 2008).
Tab. 7.3: Average wind speed in hundreds of meters in the Czech Republic
Source: Global Energy Network Institute (GENI), Wind Energy Potential in the Czech Republic, n.d.
8	 In 2016, Photon Energy took over 17 solar projects of Energy 21 Group of total installed capacity 28.5 MWp. Nevertheless, Energy 21 Group
is still operating.
9	 This is a group of four photovoltaic power plants kilometres distant from each other with an installed capacity of 14.269 MWp, 12.869 MWp,
6.614 MWp and 4.517 MWp.
Renewables 133
In order to increase operating efficiency, wind farms emerge (groups of up over ten wind power plants). In
the Czech Republic, wind power plants have a 2 % (308.2 MWe) share of installed capacity in the power system
(see ERÚ, 2018, p. 25). Wind energy is also an intermittent source (i.e. with oscillating production) which functions
only in the presence of wind. For this reason, there has to be an adequate reserve for each megawatt from wind
power plants, since their production is unpredictable and varies quickly10
. Wind power plants are coupled with
fast, stable, and cheap sources, i.e. most frequently with gas fired power plants and hydroelectric power plants.
The companies owning the largest wind power plants in the Czech Republic are Ecoenerg Windkraft GmbH
& Co. KG (42 MWe at Kryštofovy Hamry), Větrná energie HL, s.r.o. (18 MWe at Horní Loděnice), APB-PLZEN, a.
s., (19.15 MWe – Petrovice, Pavlov, Břežany and Žipotín), WIND FINANCE, a.s., (10 MWe), ČEZ Obnovitelné zdroje,
s.r.o. (8 MWe – Janov, Věznice), and Green Lines Rusová, s.r.o. (7.5 MWe) (see ERÚ, “Licence”). There are dozens
of wind power plants in the Czech Republic. The majority of installed turbines are made by the Danish technology
company Vestas (see Česká společnost pro větrnou energii, 2018).
Biomass is simply the most traditional source of energy, tied to the history of human kind. The initiation of
plant combustion for heating and light purposes reaches back into the past. Biomass has four main positives:
1. it is a renewable, theoretically inexhaustible source, if rationally used; 2. if rationally used, it is CO2
neutral; 3. it
can be transformed into different solid, gaseous, and liquid biofuels as well as stored and then used when needed;
4. its use contributes to the development of agricultural regions by exploiting manpower, mechanization and
by enhancing the local economy (see Weger, 2008, p. 9).
Biomass can be divided into two basic categories, residual and purposefully grown biomass. Residual biomass
consists of logging waste, straw and other harvesting residues, cowshed manure, and organic residues
from the manufacturing industry (paper and wood processing, sawmill, milk and food processing, etc.). First generation
energy crops (for example, oilseed rape, oil palm tree, wheat or corn), second generation energy crops
(poplar and willow trees, eucalyptus, sorrel, millet, etc.) and third generation energy crops (algae) are deliberately
grown biomass.
Biomass power plants are, in principle, the same as steam power plants (see the chapter addressing the coal
sector). The difference is that they combust (or combust in combination with fossil fuels) biomass, which is “the biodegradable
fraction of products, waste and residues from the operation of agriculture and forestry and related
industries, agricultural products grown for energy-production purposes, as well as the biodegradable fraction
of separated industrial and municipal waste” (see “Zákon č. 165/2012 Sb.”). In terms of energy use, the Czech
Republic uses mainly wood (or separated waste), straw, and other agricultural residues and livestock excrements,
and separated municipal waste possible to utilize for energy purposes or gas products arising during wastewater
cleaning treatment (see ČEZ, a.s., 2006, p. 37). Biomass intended for use in power or heating plants usually
goes through a process of modification (grinding, drying, pressing, pelletizing, gasification, etc.), while the calorific
value reaches 10–15 MJ/kg, depending upon the plant, with humidity levels maintained at 15–30 % (see ČEZ,
a.s., 2003, cited according to ČEZ, a.s., 2012, p. 39–40).
Biomass has great promise as a source of energy. The combustion of deliberately grown crops arouses controversy
when they happen to share a field with crops intended for the food industry. The result of state subsidies
for renewable energy is that farmers find the growing of energy crops more beneficial than the growing of classic
agricultural crops. Forest owners start selling wood and wood residues to heating and power plants, because
the profit is, with state support included, higher than if the same materials were sold to paper mills and other wood
processing sectors. So far, there is no need to be concerned about the security of food supplies in the Czech
Republic, because should the utilization of biomass be rational and should the plans of the Ministry of Industry
and Trade be executed, approximately 2/3 of arable land will remain for the production of food. The Ministry of
Agriculture has allocated 2.07 million of hectares out of a total 3.05 million hectares of arable land (or 4.26 million
hectares of all agricultural land) for security of food supplies purposes (see ÚVČR & NEK, 2008, p. 123).
From an environmental perspective, biomass combustion is based on the principle of a zero carbon cycle.
During combustion, CO2
is released in an amount equal to that a plant used for its growth. This design, unfortunately,
does not recognize the harmful emissions emerging during agricultural work, such as the planting, treatment,
and harvesting of crops, their modification for energy exploitation, or their transportation. For this reason,
the particular procedures require a thorough assessment (for example, local use) in order to get as close
as possible to the zero carbon cycle principle. The advantage of biomass combustion, if it is not combusted in
10	 It is the same with photovoltaic power plants.
Renewables134
combination with fossil fuels, is the use of ashes as a highly quality manure. Biomass combustion in most cases
also releases fewer sulphur fumes than fossil fuel combustion.
The largest power plants in the Czech Republic active in biomass combustion are Hodonín (105 MWe,
107 t/steam per hour), Poříčí (2 units of 55 MWe each), Teplárna Dvůr Králové (1 unit of 6.3 MWe and 1 unit of
12 MWe) and others such as Tisová I and Jindřichův Hradec, all in the hands of ČEZ (see ČEZ, “Biomasa”). These
were formerly brown coal fired power plants, and they are among the oldest power plants in the Czech Republic.
In the Czech Republic, biomass is however used for heat generation (or cogeneration) purposes–in 2018 it
saw the greatest use in the Vysočina, Plzeňský, and Ústecký regions (see Teplárenské sdružení České republiky,
2018). In recent years a major discussion has arisen on the use of waste combustion in the EU, as some environmental
groups believe it should not be recognized as a renewable source of energy.
Biogas produced in biogas stations has been a very popular product in the biomass economy recently. Biogas
stations are facilities that process a wide range of materials or waste of organic origins via anaerobic digestion11
in
the absence of air inside closed reactors (see Bačík, 2008, p. 27). This activity may split into three categories: agricultural
biogas stations, co-fermentation (industrial) biogas stations, and municipal biogas stations. Agricultural
biogas stations process dung or manure, co-fermentation biogas stations process slaughterhouse waste, sediments
from specific facilities, sediments from wastewater cleaning treatments, fats, fleshed bone meal, blood
from slaughterhouses, etc., while municipal biogas stations use biological waste from households, restaurants,
canteens, the maintenance of public green spaces, etc. (see Trnavský, 2008a, p. 24; Bačík, 2008, p. 28).
Biogas can be utilized in many different ways: direct combustion, power and heat generation, in internal combustion
engines, etc. Biomass processing can deliver various products, such as biogas, synthetic oil, ETBE12
and
MTBE13
, vegetable oil, biomethanol, engine oil and others.
Unlike the use of sun or wind (for power or heat production), biogas has one indisputable advantage – it is
possible to store and perfectly manageable and usable when necessary. When the intensity of solar radiation is
lower in winter and at night when the sun is absent–those times we need energy the most for heating and light–
stores of biogas or biomass may provide power without interruption. Moreover, by increasing methane content
above the 98 % level, biogas can be modified to acquire a natural gas-like quality, which enhances its value. Biogas
stations are constructed in keeping with the contemporary trend towards energy decentralization. With regard
to their size, they are utilized like local sources and, since they process waste materials, also count as very environmentally
friendly. Power production from biogas in 2017 reached 389 MW of installed capacity (2,639 GWh)
(see MPO, 2016 p. 90; ERÚ, 2018, p. 8, 23). Its potential in terms of environmental protection, renewables development,
and the production of power, heat and other products, is not insignificant. For instance, the biogas station
in Číčov operated by ČEZ has an installed capacity of 526 kWp and annually produces 3,372 GWh of electricity
and heat for over 1000 households (see ČEZ a.s., “Číčov”). According to the National Action Plan, development
should reach 403 MW of installed capacity (3,041 GWh) by 2020 (see MPO, 2015, p. 90). Since 2014 biogas has
been the number-one RES in electricity production in the Czech Republic (see the chart 7.4).
Solar collectors are another renewable source used in the Czech Republic to generate heat. A solar collector
is a device serving for the direct absorption of solar radiation and heating fluids for direct use or for heating another
fluid in a heat exchanger, which may then circulate through a central heating supply system. The solar collector
is composed in such a manner as to absorb solar radiation to maximum effect, then to convert it into heat
without reverse emission and deliver this heat to the heating fluid with a minimum loss of thermal energy during
the transmission and streaming processes (see Eckertová, 1996, p. 9). A solar collector is a closed, thermally
insulated case consisting of permeable glass, an absorber placed underneath the glass (usually a black plank
which warms up to 120°C), a system of tubes with a thermal transmission medium (water, oil, air, or gas), thermal
insulation and an adequate exchanger (see ČEZ, a.s., 2006, p. 12). There is no larger solar collector in the country
and, because of weather conditions, it is unlikely there will ever be one. Solar collectors are therefore used on
local bases by single households, mainly to heat water and rooms, but this can bring significant savings in total
energy consumption.
11	 Anaerobic digestion is the biological degradation of organic materials in the absence of air. The result of this process is a biologically
stabilized substrate with a highly fertilizing effect, and biogas with a 55–70% share of methane and a calorific value around 18–26 MJ/m3
(see Mužík & Kára, 2008, p. 22).
12	 Ethyl Tertiary Butyl Ether
13	 Methyl tertiary butyl ether
Renewables 135
Geothermal energy is simply power derived from the Earth’s internal heat, often used for heating or cooling.
Geothermal power plants use steam turbines to generate electricity. This approach is very similar to other thermal
power plants that use sources of energy other than geothermal. Water is either heated or used directly in case of
geothermal dry steam power plants. Very deep wells (sometimes exceeding 1.5 km) are drilled into underground
reservoirs to tap steam and very hot water. This then drives a steam turbine which converts the thermal energy
to electricity with a generator through an electromagnetic induction. The next step in the cycle is to cool the fluid
and send it back to the heat source (see Energy Informative, n.d.). So far, there is one geothermal power plant
in Děčín (owned by Termo Děčín a.s.) with a well 545 meters deep which supplies heat to half the city´s households.
Three other plants are planned within the Czech Republic (at Litoměřice, Tanvald, Dětřichov) and should
be operational by 2021 (see MPO, 2019a, p.65).
Table 7.4 shows the distribution of renewable energy sources over gross electricity production and its share
in total gross national consumption (see ERÚ, 2018, p. 8). As we can see, most of the electricity from renewables
in the Czech Republic was produced by biogas followed by solar power plants and biomass.
Tab. 7.4: Evolution of gross electricity production from RES and its share of gross national consumption (TWh)
5,19%
6,81%
8,30%
10,28%
11,43%
13,17% 13,17% 13,27%
12,97% 13,03%
0%
2%
4%
6%
8%
10%
12%
14%
0
2
4
6
8
10
12
14
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Malé vodní elektrárny do 10 MW Vodní elektrárny nad 10 MW Větrné elektrárny Fotovoltaika Bioplyn Biomasa BRKO Podíl OZE [%]
Source: ERÚ, 2018, p. 24
Renewable energy in the transportation sector is also gaining importance, with biodiesel in the lead. Other
important sources of final consumption in RES in transport in the Czech Republic are bioethanol and electricity
from RES. The recast of the Directive on the promotion of the use of energy from renewable sources obliges
the EU member states to a uniform goal of 14% in the transportation sector. In 2016, the Czech Republic had
a share of RES in final consumption of 7.4%. (see MPO, 2019a, p. 71)
7.3	 The Regulatory and Safety Framework of the Renewables Industry
The local legal framework for renewable sources of energy is formulated in four legal acts. These are Act No.
180/2005 Coll., on the Promotion of Electricity Production from Renewable Energy Sources and Amending
Certain Acts (and its Executive Regulations), Act No. 406/2000 Coll., on Energy Management (and its Executive
Regulations), Act No. 458/2000 Coll. on Business Conditions and Public Administration in the Energy Sector and
on Amendments to other laws (and its Executive Regulations) and Act No. 165/2012 Coll. on Supported Energy
Sources and on Amendments to Other Laws.
Under Act No. 180/2005 Coll., the level of subsidy (green bonus; feed-in tariff) is determined by the Energy
Regulatory Office, which by virtue of its ordinance-making power and, primarily, cost regulation, constitutes
the main regulatory body overseeing renewable energy sources (together with the Ministry of Industry and Trade).
The Office is, among other things, engaged in support of the exploitation of renewable and secondary sources of
energy, the combined production of power and heat, and protection of consumer interests in these energy sectors,
in which competition is not possible.
Renewables136
Aside from state aid supporting the utilization of renewables, Act No. 180/2005 Coll. also obliges the operators
of regional distribution systems and the transmission system “to purchase all electricity from renewable sources
eligible for promotion and to conclude a supply contract, if a producer has offered electricity from renewable
sources… Assumption of responsibility for deviation pursuant to special regulation” is of extreme importance, as
well (see “Zákon č. 180/2005 Sb.”). Act No. 180/2005 Coll. Spells out the obligation for preferential purchases of
electricity from renewables for all licensed third parties with a license approved by the Energy Regulatory Office
and, accordingly, the responsibility of CEPS to maintain network stability in the event of unstable production of
electricity from renewables. But Act No. 180/2005 was rescinded by Act No. 165/2012, which is currently in force
(the above terms were transferred to this new Act). This meant the end of support for newly installed renewable
sources with a few exceptions–small hydroelectric power plants with an installed capacity of <10 MW and transitional
provisions for wind, geothermal, and biomass power plants (established by amending Act No. 165/2012
1 January 2014). Also, the 2012 Act revoked the previously established obligation for operators of the transmission
system to purchase all electricity from renewable sources eligible for promotion. Lots have changed due
to the so‑called “solar boom” described below, yet Act No. 180/2005 remains a milestone in the promotion of
renewable energy sources. The amendment of Act No. 165/2012 is expected to come into force during 2019. It
concentrates mainly on prosumers, the transportation sector, heating and cooling, the combined production of
electric power and heat, the accumulation of energy, overcompensation, and RES auctions as a way to attain RES
targets for 2030. (see Denková, 2018; Ministry of Industry and Trade, 2018).
At the supranational level, there is the Directive of the European Parliament and of the Council 2009/28/EC of
April 23, 2009, on the Promotion of the Use of Energy from Renewable Sources and Amending and Subsequently
Repealing Directives 2001/77/EC and 2003/30/EC (see “Directive 2009/28/EC”), also called “RED”. This directive
was fully implemented in the National Renewable Energy Action Plan starting July 2010 (see MPO, 2010c),
a document which, as amended by the Directive, sets the national goals of member states regarding the share of
energy from renewables in the transportation, power, and heat generation and air conditioning sectors by 2020.
In December 2018, “RED II” came into force as part of the EU´s Winter Package, which aims to provide clean energy
for all Europeans. It establishes a binding EU target of at least 32% RES for 2030 with a review in 2023 to
assess whether this figure should be increased (while the Proposal for a Directive of the European Parliament
and of the Council on the Promotion of the Use of Energy from Renewable Sources from 2016 saw a 27% share
of RES as the most efficient solution). It and the Energy Efficiency Directive, the Energy Performance of Building
Directive, and the Governance Regulation, make four out of eight legislative acts in the Winter Package approved
by 2018 (see EC, 2018). The four remaining directives were approved in mid-20191
.
The climate and energy framework for 2030 was set mainly by the Winter Package. The 2030 target of 32% is
officially binding only at the EU level. This is in contrast to the 2020 targets that were legally embedded in the mandatory
National Action Plans. The realization of 2030 targets will be met through the Energy Union Governance
Regulation, which imposes an obligation to draw up a National Climate and Energy Plan and national long-term
strategies for individual Member States from 2021 to 2030 outlining how to achieve the targets. The European
Commission will then observe whether the national targets accommodate the overall goal of 32%.
Due to dynamic changes in the RES sector and in keeping with Czech Act No. 165/2012, it was decided to periodically
update the National Renewable Energy Action Plan. The latest Action Plan is from February 2016 and
anticipates a 15.3% share for RES in total gross energy consumption and a 10% RES share in total gross consumption
in the transport sector (see MPO, 2016). After 2021, this document will be replaced by the Intrastate
Energy and Climate Plan.
In terms of obligations deriving from membership in international organizations, the Czech Republic has
become subject to seven significant legal obligations (see Table 7.5). The first and third may be considered to
have been satisfied, while the second has actually been exceeded by 0.3%. The fourth obligation seems at this
point hardly to be achievable. The fifth obligation, although very ambitious, should be achievable (according to
Zámyslický, 2009). The sixth and seventh obligations may be seen as new challenges for the Czech Republic,
the EU, and the whole world struggling against climate change.
1	Namely: Electricity Directive, Electricity Regulation, Risk-Preparedness Regulation, Regulation for ACER.
Renewables 137
Tab. 7.5: Obligations Resulting from Membership in International Organizations
Obligation Obligation as Amended by
1. Reduction in greenhouse gas emissions by 8% by 2012. Kyoto Protocol (1997) 2005
2. A greater renewable energy share in gross final consumption,
reaching a level of 8% by 2010 and a level of 15% by 2030.
EU Accession Agreement (Athens, April 16, 2003)
3. A greater renewable energy share in gross final consumption,
reaching a level of 13% by 2020.
Directive of the European Parliament and of the Council
2009/28/EC
4. Reaching a renewable energy share of 10% in all sorts of
transportation displayed in gross final energy consumption in
transportation in the Czech Republic by 2020.
Directive of the European Parliament and of the Council
2009/28/EC
5. Emissions from sectors not covered by the EU ETS will not
exceed 2005 levels + 9% by 2020.
EU Climate and Energy Package 2009
6. The main aim is to hold the increase in the global average
temperature to well below 2°C ideally to 1.5 °C) above preindustrial
levels.
The Paris Agreement (UNFCCC2
) 2016
7. A greater renewable energy share in gross final consumption,
reaching an overall target of 32% by 2030 for the EU as
a whole (20.8% for the Czech Republic, see below).
The EU Winter Package3
– Directive (EU) 2018/2001 on
the Promotion of the Use of Energy from Renewable Sources
& The Regulation on the Governance of the Energy Union and
Climate Action
Source: T. Vlček and E. Trmalová from publicly available sources
7.4	 Demand Forecast
In comparison with the objective declared in Directive 2009/28/EC, the National Renewable Energy Action Plan of
the Czech Republic of 2016 foresees a renewable energy share in gross final energy consumption of 15.3% and a renewable
energy share in gross final consumption in transportation of 10% by 2020 (see MPO, 2015, p. 4). The plan
for the following years under the proposed Intrastate Energy and Climate Plan is presented in the following tables.
Tab. 7.6: Scenario of renewable energy share in final energy consumption by sector (%)
Year 2016 2020 2023 2025 2027 2030
Electricity 13.6% 14.0 % 14.3 % 14.5 % 14.3 % 14.2 %
Transportation 6.4% 8.8 % 8.6 % 9.5 % 11.3 % 14.0 %
Heating & Cooling 19.9% 22.0 % 24.6 % 26.0 % 27.5 % 30.0 %
Total 14.9% 16.3 % 17.9 % 18.6 % 19.4 % 20.8 %
Source: The Ministry of Industry and Trade, 2019b, p. 25
Tab. 7.7: Anticipated development of renewable energy sources in electricity sector (TJ)
Year 2016 2020 2023 2025 2027 2030
Biomass4
7,443.9 8,431.2 8,525.1 8,607.8 8,635.3 8,988.4
Hydroelectric power plants 8,205.5 7,944.5 7,664.7 7,299.8 7,236.9 7,106.7
Biowaste5
354.8 432.8 1,241.0 1,354.4 1,354.4 1,479.1
Biogas stations 9,320.5 9,469.5 9,109.6 8,970.0 7,831.2 5,683.0
Geothermal energy 0.0 152.1 152.1 152.1 309.6 404.1
Wind power plants 1,867.1 2,424.8 3,041.8 3,572.3 4,119.8 5,115.7
Solar power plants 7,673.2 8,050.8 8,169.6 8,374.8 8,713.2 9,490.8
Total 34,865.0 36,905.7 37,903.9 38,331.2 38,200.4 38,267.8
Source: The Ministry of Industry and Trade, 2019b, p. 24
2	 The United Nations Framework Convention on Climate Change
3	 Clean Energy for All Europeans
4	 not used by households
5	 The biodegradable portion of municipal solid waste
Renewables138
Tab. 7.8: Scenario of renewable energy share in final energy consumption according to the Ministry of Industry and Trade of
the Czech Republic for the purposes of the Intrastate Plan (TJ)
Year 2016 2020 2023 2025 2027 2030
Electricity 33,247.7 36,905.7 37,903.9 38,331.2 38,200.4 38,267.8
Transportation 14,197.3 18,557.9 21,021.7 22,491.6 25,048.8 29,421.2
Heating & Cooling 117,220.8 127,351.1 140,697.1 146,854.9 153,579.2 164,483.4
Total 164,665.8 182,814.7 199,622.7 207,677.7 216,828.4 232,172.4
Source: The Ministry of Industry and Trade, 2019b, p. 23
Based on obligations resulting from the  EU Winter Package, namely the  Directive (EU) 2018/2001 on
the Promotion of the Use of Energy from Renewable Sources and the Regulation on the Governance of the Energy
Union and Climate Action Setting Targets Until 2030, the Czech Republic has proposed the goal of a 20.8%
share for RES by 2030 as stated in the Development of the Supported Sources by 2030, which serves as background
material for the preparation of the Intrastate Energy and Climate Plan. This document also sets a target
for the transportation sector of 14%. (see MPO, 2019a, p. 3–4, 22)
The Ministry of Industry and Trade has determined that the share of renewable energy sources must be increased
to approximately 6% by 2030 (see MPO, 2019b, p. 67). But the document warns that for such a low percent
increase of new sources, it will be necessary to keep efficient plants in operation. Terminating support for
these plants might then leave them incapable of remaining in operation without aid. The major threat is to biomass
and biogas plants, without which it would be necessary to increase the RES share even above 12% in order
to meet the 20.8% target. Thus it is anticipated that efficient plants will be given support to continue electricity
production or to modernize (see MPO, 2019b, p. 26, 145). The DUHA movement, Zelený kruh association, Calla
z.s., Glopolis think-tank and Centre for Transport and Energy do not agree with official 2030 target of the Ministry
of Industry and Trade. They believe that the proposal should be at least 24%, as there is potential for RES to account
for 22–28% of expected energy consumption in 2030 even without advanced biofuels or other new technologies
in the transport sector. The proposal is to be discussed with the European Commission; thus it is possible
that the Czech Republic might be asked to set a higher goal. (see Euractiv.cz, 2019)
The Proposal of the Intrastate Plan of the Ministry of Industry and Trade sees development as shown in Table
7.9. The green dot at 13% shows the EU 2020 target; the yellow dot at 20.8% shows the 2030 target (see MPO,
2019b, p. 22):
Tab. 7.9: Development of the RES according to the Proposal of the Intrastate Plan of the Ministry of Industry and Trade
25%
20,80%
18,07%
16,35%
14,40%
13,00%
20%
15%
10%
5%
0%
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Source: MPO, 2019b, p. 24
Renewables 139
Under the amended Act No. 165/2012 Coll., the state intends to reach these levels mainly by using the auction
mechanism (described below) to install a new RES over 1 MW, while smaller sources will be able to apply for an
hourly green bonus. Many states already use RES auctions as a way to promote renewable energy for their market
base. It also helps to decrease the price of electricity by using a “price-only criterion”, which means the cheapest
projects succeed at auction. RES auctions should start in the Czech Republic in 2020. Investment support
is often spoken of as part of state programs of support. There are two main programmes aimed at investment
support, Nová zelená úsporám (“New green for savings” which is focused on housing, for example using thermal
insulation) and OP PIK (the Operational Program of the Ministry of Industry and Trade financed by the European
Regional Development Fund, focused on small- and medium-sized firms6
) (see Enviweb s.r.o., 2017). Other options
are investment support for research and development, structural funds drawing on EU financial resources,
changes to waste management policy and support for the waste-to-energy principle, suitable and adequate operational
support for power production, raising public awareness, simplifying and shortening the approval process
for building electrification facilities, and other means. (see MPO, 2010c, p. 89–97).
Forecasts for decades in advance are, however, always too broad to pinpoint events that could actually come
to pass. Any significant development of renewables is obstructed by a string of objective and subjective obstacles,
which will be discussed in the following section.
7.5	 Criticism and Development of Renewables
The Czech Republic was obligated to abide by a goal of deploying RES by 2020, and so Act No. 180/2005 established
a system of support. The state system to promote renewables was set up to be very generous and allowed only a 5%
annual decrease in the purchase price. This generosity is visible in the following example: while in 2005 the purchase
price of electricity from photovoltaic power plants was 6.04 CZK/kWh, the Energy Regulatory Office more than doubled
this value in 2006 to 13.2 CZK/kWh (which was about twelve times the market price of electricity) (see Zajíček,
2010, p. 62). This well-meant plan unfortunately did not foresee the events of 2008, when the price of PV technology
decreased radically due to the mass production of PV panels in China. This led to a “solar boom” in the Czech
Republic, which because of its limited suitability in terms of natural conditions had not anticipated strong development
of solar technology (see Vobořil, 2015). For example, the targetof1,695 MWe of installedcapacityin photovoltaic
power plants, which the Czech National Renewable Energy Action Plan set for 2020, was already surpassed in 2010.
The originally well-planned program was supposed to motivate citizens to accept renewables, to trust their potential,
and increase renewable energy’s share in the total production and consumption of electricity in the Czech
Republic, in order to meet the commitments required under international agreements. In reality, however, citizens
and the industrial sector identified the opportunity and prospect of easily obtainable and guaranteed state
money over the course of several years, and photovoltaic plants consequently experienced an incredible expansion.
Not even the Energy Regulatory Office was able to manage the situation, since the law allowed it to lower
the purchase price of electricity from renewables by at most 5% per year. An amended version of the law allowing
more substantial reductions did not come into force until 2011.
These events naturally led to growing risk from problems arising inside the transmission system and even
more so inside the distribution system. The progress predicted by the National Action Plan called for a notably
easier pace and would thus have allowed for the simultaneous development of infrastructure. Given that the installed
capacity of photovoltaic power plants preceded the National Action Plan, but the development of infrastructure
and facilities was running according to plan, it came to a collision between renewables development
and the potential of existing technical foundations. This discrepancy finally led to a situation Jan Zeman describes
as a “renewable energy crisis” (see Zeman, 2011, p. 44–48).
The discrepancy triggered the crisis, which erupted on February 16, 2010 when ČEZ Distribuce, a.s. and E.ON
Distribuce, a.s. acceded to the request of CEPS to stop approving applications for the installation of new photovoltaic
and wind power plants in the network (see Zeman, 2011, p. 44–45). If we observe Table 7.10, it is clear that
it was impossible to react to this unexpected and unanticipated development of photovoltaic (and wind) power
plans in a timely manner by developing the technical base of the electrification system.
6	 The program is focused on accumulation, biogas, biomass, rooftop PV installations, energy saving, smart grids, e-mobility, and small
hydroelectric power plants
Renewables140
Tab. 7.10: Installed Capacity of Photovoltaic Power Plants in the Czech Electrification System (MW)
Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Inst. capacity 0.13 0.13 0.74 3.4 39 465 1,959 1,971 2,086 2,132 2,067 2,075 2,068 2,069
Source: Energetický regulační úřad 2018, p. 25 (note: data for 2004–2007 are from the previous reports)
These figures are the basis for specific total expenditures intended for photovoltaic and wind power plants
inside the Czech electrification system, which are outlined in Table 7.11. Miroslav Zajíček argues that this figure
is approximately equal to the figure which would cover pension reform, or to two to three times the estimated
costs for completion of the Temelín nuclear power plant (see Zajíček, 2010, p. 63). Energy for industry in the Czech
Republic became the most expensive in Europe, which negatively impacted the competitiveness of Czech firms
(see Vobořil, 2015).
Tab. 7.11: Total Expenditures for Photovoltaic and Wind Power Plants in the Czech Electrification System, 2010 – 2030
Gross Costs Total 2010 – 2030 (mil. of CZK) Share of Total (%)
Direct costs of electricity purchased in photovoltaic power plant 509,916 72.6
Direct costs of electricity purchased in wind power plant 44,836 6.4
Costs of the provision of sufficient PpS 48,948 7.0
Costs of induced investments 18,035 2.6
Costs of additional regulatory energy 80,380 11.4
In Total 702,116 100
Source: Zajíček, 2010, p. 66; modified by T. Vlček.
The state was, of course, aware of the situation and fighting it in its typical manner. In November 2010,
Amendment No. 330/2010 Coll. and, in December 2010, Amendment No. 402/2010 Coll. to Act No. 180/2005
Coll., on the Promotion of Electricity Production from Renewable Energy Sources and Amending Certain Acts,
were passed and entered into force on March 1, 2011. The amendments introduced several changes, among them
that from now on the state would support only those photovoltaic power plants connected to the distribution network,
i.e. photovoltaic systems producing electricity or heat only for household purposes would not be supported.
Solar farms were also to be cut off from support, and state support will go only to photovoltaic power plants
placed on roofs and buildings with installed capacity of no more than 30 kWp. A retroactive solar tax of 26% was
introduced for all photovoltaic facilities launched in 2009 and 2010 and 10% for photovoltaic facilities launched
after 2010. An exemption was approved only for devices on house rooftops with a capacity reaching less than 30
kWp. The changes also affect the regulation of purchase prices performed by the Energy Regulatory Office. For
example, should renewables in the year the new regulations affecting purchase prices apply reach a return on
investments of less than 11 years, they are subject to not more than 5% of the yearly reduction in purchase prices.
In 2011, the purchase price of electricity from renewables was set at 7.5 CZK/kWh.
These amendments were understood as a temporary solution, while the conceptual solution found its expression
in a bill on supported sources of electricity which replaced Act No. 180/2005 Coll. It entered into force on
January 1, 2013, as Act No. 165/2012 Coll. on Supported Energy Sources and on Amendments to other laws, and
simultaneously annulled Act No. 180/2005 Coll. Following its approval by the Chamber of Deputies and the Senate
on January 31, 2012, the president, Vaclav Klaus, vetoed it in March of the same year. The arguments for his position
were the widening of the scope of supported sources of energy to include biomethane and low legislative quality
requiring “a string of regulations implemented through the means of the relevant legislature”, where “such regulations
would represent a violation of the Constitution and of the Charter of Fundamental Rights and Freedoms,
since the law permits the setting only of technical details of enforcement via ordinances and regulations and
not citizens’ own rights and obligations” (see “Stanovisko prezidenta”). Act No. 165/2012 Coll. was nonetheless
passed on May 9, 2012, when the Chamber of Deputies overrode the president’s veto with an overall majority.
The Act in reality adds some new promoted sources, namely support for heat generation from renewables, biomass,
and geothermal with a capacity of more than 200 kW connected to the system of central heating. The Act
was closely tied to Directive 2009/28/EC. Under the National Renewable Energy Action Plan, the connection of
renewables to the network was to be, from that point forward, capped with a yearly capacity. Though Directive
Renewables 141
2009/28/EC understands the levels of the National Action Plan to be the minimum, the new Act No. 165/2012 Coll.
takes them as the maximum. These caps, in keeping with the National Action Plan, are calculated every year not
only for the entire Czech Republic, but for individual regions, as well. Should they reach the upper limit, no further
connection approvals will be granted until the following year. It must be added that the National Renewable
Energy Action Plan by 2020 was already fulfilled in 2010 due to the solar boom. In reality, this meant the end of
newly installed capacity (see table 7.10). Support for photovoltaic power plants has recently been limited to a production
capacity of less than 30 kWp located on the roof or perimeter wall of a building attached to the ground
via firm foundations registered in the real property registry (see “Zákon ze dne 31. ledna 2012”).
From September 2013, the amended act stopped support for all RES put into operation after 2014. This meant
the end of support also for more efficient sources such as small hydroelectric power plants of less than 10 MWe
and biomass plants that could have been used instead of PV (see Svoboda, 2017). The amendments and the new
act contributed to the stabilization of the renewables sector that used to be beneficial mainly for photovoltaic
power plants. The price to be paid is, naturally, high. The subsidy for RES costs approximately CZK 40 billion
yearly (roughly €1.6 billion). The state budget pays approximately CZK 26 billion annually of the total sum; another
portion is paid out of the solar tax; and the rest is paid by customers through the contribution to renewable
energy. This contribution amounted to CZK 28 /MWh in 2006 but in 2013 it was already CZK 583/MWh. Due to
this increase, it was capped in 2014, mainly due to the pressure of industry representatives who were afraid they
would not be competitive on the international level. The contribution cannot grow beyond CZK 495/MWh. This
means the Czech Republic pays the highest subsidy per MWh versus other European states. The precise figure
is € 198.29/MWh (see Oenergetice, 2019a, 2019 b). The abrupt suspension of the sector and a significant change
in terms led to the bankruptcy of about ten companies trading in photovoltaic technologies, while the state will
be financially burdened with support for decentralized production and renewables for decades (see below).
Renewables have been discredited in the public eye to a great extent. In 2004, the production of electricity from
renewables reached a figure of 2.61 TWh and a 3.80% share in consumption. In 2012, production of electricity
from renewables amounted to 8.06 TWh, while the share in consumption was 11.43% (see Energetický regulační
úřad, 2013). In this context, it depends upon whether we are really speaking of positives figures. It is also worth
saying that after the “renewable energy crisis” there has been visible stagnation in efforts to install new capacity.
Now there are efforts to change this, besides other things to meet the 2030 EU targets. The amended Act No.
165/2012 Coll., in force from 2019, aims to support new installations of RES above 1 MW via auctions (starting in
2020) and smaller installations will be supported through the green bonus in an hourly regime. It also calls for
compensating existing efficient RES power plants for their increased expenses. The National Renewable Energy
Action Plan also deals with the share of RES and the Intrastate Energy and Climate Plan concentrates, aside from
RES, on GHG emissions, energy efficiency and the interconnectivity of transmission systems.
7.6	 Current State of Renewables
Currently under Act No. 165/2012, there are two types of support for RES plants installed before 2013: the feed‑in
tariff and the green bonus. The two subsidies cannot be combined. The feed-in tariff is a regime in which a producer
of energy from RES gets a fixed amount per MWh from the state. A producer who decides instead for
the green bonus consumes his energy and sells his surplus to the electricity trader of his own choice and receives
a bonus, that is the financial amount increasing the market price of electricity. The level of the green bonus
is stated by the Energy regulatory office and works in hourly or yearly regime (Amended Act 165/2012 will
allow only the hourly regime as a more market-oriented choice).
Establishing support for RES and changing support levels are the riskiest factors affecting investments in
RES in the Czech Republic and influence installation costs versus other countries (see Kučera, 2016). This has
resulted in a lack of new RES installations, making the situation unsustainable in the long-term. Although feed‑in
tariffs once had a dominant position as the chief subsidy tool for RES, in 2017 auctions gained the upper hand.
Table 7.12 helps to better understand the difference between the feed-in tariff and the auction mechanism. With
a feed-in tariff (FIT7
), the government sets the price and markets set the quantity, which makes the newly installed
capacity hardly predictable. This was the stumbling block for the Czech Republic. With an auction, by contrast,
7	Or its mutation – Feed-in premium (FIP)
Renewables142
the government sets the volume and the market then determines the price, which is usually lower, reflecting real
investment costs. Winners then get a guarantee on the price of electricity for a certain number of years, equal
to the price they bid at auction (pay-as-bid pricing). With uniform pricing, usually the final successful bidder determines
the price for all selected projects. However, this description is highly simplified. There are many design
elements that determine the course of the auction.
Tab. 7.12: The difference between FIT and Auction mechanism
Remuneration Remuneration
Source: IRENA, 2017, p.4
RES auctions, when properly set, can solve the problem of supporting RES on the market principle (since
2017, the EU has required competitive tender procedures as the sole means of new RES subsidy mechanisms8
)
and not excessively burden the state budget. Also, well designed auctions can support higher deployment of
community and municipal projects. Directly involving people may increase public support for RES once again.
The Czech Republic aims to gradually decarbonize its economy, have sustainable growth, protect the environment,
moderate the impact of climate change, increase energy independence and energy security, and fulfil its
international commitments. Taking into account the uncertain future of nuclear power plants and the decline of
many major coal power plants is another reason to boost the share of RES, and legislators are aware of the changes
that must be made. It is still not likely that RES will be cheap enough to survive without support, which opens
the door for auctions in the Updated State Energy Concept from 2015 as a way of supporting RES. Czech legislators
are readying the first auction round(s) for 2020. The major inspiration was found in German auction design
(pay‑as‑bid pricing formula, price-only winners selection criterion; see IEA, 2018). The auction mechanism will be
put to the Czech legislature as a minor amendment to the Energy Act and Act No. 165/2012 Coll. on Supported
Energy Sources. The draft of this Act excluded large solar power plants from the auctions. It is also probable that
future auctions will take place at the cross-border level, as well–another reason to start with auctions soon in order
to get used to the mechanism.
In addition to the uncertain business environment with regard to RES, there is another pressing current issue.
According to a Notification Decision of the European Commission, Member States must examine the issue of possible
overcompensation. States will be monitored as to whether public support for RES has been accumulated.
Not to do so would disproportionately increase the profit of producers instead of making for level conditions. This
together with the stigma of RES within Czech society has resulted in the process of RES installation stagnating.
The Czech Republic accepted an obligation to increase the share of renewable energy in gross final energy
consumption to 13% by 2020 and to at least 20.8% by 2030. It should be noted that with respect to unstable production
of electricity from renewables, information about installed capacity does not provide many insights, because
gross final energy consumption is what counts. The unknown quantity is clarified by the capacity factor,
which provides information on real electricity production compared to the installed maximum. It detects what
8	 Communication from the Commission – Guidelines on State aid for environmental protection and energy 2014–2020
Renewables 143
percentage of the installed capacity can be utilized, e.g. when there is a good wind or sunny conditions, etc. In
the Czech Republic, solar power plants´ capacity factor is around 12%. Wind power plants can reach up to 20%,
but the numbers fluctuating significantly throughout the year. Small hydroelectric power plants reach around
50% or greater, depending on annual rainfall. Biomass and biogas may reach around 80–90% (see Bechník, 2014;
averages from publicly available sources).
“Its geographical location and geological and climate conditions give the Czech Republic a perpetual but significantly
limited potential for the development of renewable sources. The Czech Republic does not have sufficient
potential at its disposal to develop the wind, solar, or geothermal power. The environmental contribution
of the developing combustion of emission biomass is questionable, since the theory of the zero CO2
balance is,
in the case of biomass, only a play on words. The only relevant renewable sources in the Czech Republic are hydroelectric
power plants, although a great measure of their potential has been already exploited” (see Kavina,
2009, p. 321, still valid in 2019). This is how Pavel Kavina, Director of the Raw Materials and Energy Security
Department of the Ministry of Industry and Trade, assesses the state of renewables in the Czech Republic.
The Paces Commission (see the chapter on history for more details) is notably more positive, claiming that
the Czech Republic, at the current level of knowledge, possesses the potential to increase power production
from the 0.15 TWh per year recorded in 2010 to 5.67 TWh per year by 2030 and as much as 18.24 TWh per year by
2050 in the photovoltaic sector (see ÚVČR & NEK, 2008, p. 123). According to the analysis of the RES Chamber,
wind power has big potential that could cover over one-third of electricity consumption. Currently it amounts to
around 0.7 %. The limitation on this potential might be the high installed capacity in neighbouring Germany, which
pushes prices down would thus make Czech wind farms uncompetitive. Also, photovoltaics have the potential to
reach 5,500 MW of installed capacity in 2030. With the decreasing price of solar panels and the growth of electricity
storage options, expectations for their share in the energy mix are high. It is also worth mentioning that
biogas, which accounted for 332 MW in 2018, has the potential to reach 485 MW of installed capacity in 2030.
(see Europeum think-tank, 2018, p. 2–4)
Within Czech society, the opinion is often expressed that renewable energy is too expensive and should not
be promoted. Of course, after the renewable crisis, it is unsurprising that people tend to see only the negatives of
renewable energy. But it must be realized that every industry sector has gone through birth pangs and required
subsidies to become competitive. Every industry sector has gone and must go through its own development.
Should support reach the levels enjoyed by the nuclear power industry, we may expect a considerable increase
in stability, operational security, efficiency, and other features of renewables (see Šafařík, 2000, p. 59). The problem
the renewable sector presently faces is that subsidies push it onto the market artificially to speed up the process
without first letting it go through its own developmental period.
Renewables are not essentially bad–quite the contrary. It is, however, always necessary to take the security
of entire energy sector and a balanced energy mix into consideration. The objective limits for the development
of renewables may be found in the inadequate natural conditions, climate and geography of the Czech Republic
and the still low efficiency and stability of energy production from renewables, as well. There is moreover always
a shortage of renewables for completing the binding goals set by the EU, and therefore massive development is
required. This will, however, mean a consequent rise in the massive risk induced by implementing renewables
into the operating process of the entire electric power industry and the power industry in the Czech Republic.
With growing flexibility in the network (smart grids, aggregator of flexibility, demand side response) and with
higher implementation of less fluctuating RES such as biogas, biomass or waste, it will be possible to work with
decentralized sources such as RES much better and use them to cover peak loads.
Power should be produced in large amounts in a stable manner over the smallest surface area possible, all
of which renewables are incapable of providing. Vladimír Vlk, Director of the Department of Sustainable Energy
and Transport at the Ministry of Environment argues that “we anticipate the exploitation of alternative and renewable
sources of energy will first take place in the municipal power industry and only then in smaller locales
and municipalities. (…) We should aim at (…) setting up less centralized sources inside municipalities–for example,
a facility for wood cut-offs and pellet production or a biogas station” (see “Podporuji využívání,” 2008, p. 8).
It is exactly here that we should recognize by far the most appropriate utilization of renewables as well as by far
the greatest contribution of renewables to the entire state power industry.
Renewables will remain complementary sources for a long time. This should not be taken negatively; the sharply
dialectical character of present energy sector is directed towards the increasing use of renewables anyway.
Attention should, however, be paid to recklessness and imprudent support. The focus should be on supporting
Renewables144
the field, which would impose almost zero costs. Even a relatively profitable biomass economy appears uneconomic
compared to waste-to-energy, that is, the exploitation of waste which is “made by itself”. Support and conceptual
and rational development should go to projects implementing geographical and national particularities,
adequate conditions, and with prospects for the future. Comparing waste-to-energy, for example, with a project
for geothermal energy utilization in terms of their potential on our soil, it is entirely clear which of the projects
would have an advantage.
7.7	 Sources
Bačík, O. (2008). Bioplynové stanice: technologie pro 21. století. Energie 21, 2008 (2), pp. 27–29.
Bechník, B. (2014). Roční využití výkonu větrných elektráren v České republice. Tzb-info. Retrieved from
https://​oze​.tzb​-info​.cz​/vetrna​-energie​/11077​-rocni​-vyuziti​-vykonu​-vetrnych​-elektraren​-v-ceske​-republice
Česká společnost pro větrnou energii (ČSVE). (2018). Aktuální instalace. Retrieved from http://​www​.csve​.cz​
/clanky​/aktualni​-instalace​-vte​-cr​/120
ČEZ a.s. (2012). Obnovitelné zdroje energie a skupina ČEZ. Retrieved from https://​www​.ČEZ​.cz​/edee​/content​
/file​/pro​-media​-2012​/03​-brezen​/obnovitelne​-zdroje​-energie​-a-skupina​-ČEZ​.pdf
ČEZ a.s. (n.d.) Bioplynová stanice Číčov. Retrieved from https://​www​.ČEZ​.cz​/cs​/vyroba​-elektriny​/obnovitelne​
-zdroje​/bioplyn​/bioplynova​-stanice​-cicov​.html
ČEZ a.s. (n.d.). Elektrárny ČEZ spalující biomasu. Retrieved from https://​www​.ČEZ​.cz​/cs​/vyroba​-elektriny​
/obnovitelne​-zdroje​/biomasa​/elektrarny​-ČEZ​-spalujici​-biomasu​.html
ČEZ a.s. (n.d.). Provozované fotovoltaické elektrárny. Retrieved from https://​www​.ČEZ​.cz​/cs​/vyroba​-elektriny​
/obnovitelne​-zdroje​/slunce​/provozovane​-fotovoltaicke​-elektrarny​.html
ČEZ, a.s. (2006). Obnovitelné zdroje energie a skupina ČEZ. Praha: ČEZ, a.s.
Denková, A. (2018). Česko bude mít zcela nový energetický zákon. Vzniknout by mohl do tří let. Euractiv.cz.
Retrieved from https://​euractiv​.cz​/section​/energetika​/news​/cesko​-bude​-mit​-zcela​-novy​-energeticky​-zakon​
-vzniknout​-by​-mohl​-do​-tri​-let/
Directive (EU) 2018/2001 on the promotion of the use of energy from renewable sources. Retrieved from
https://​www​.europeansources​.info​/record​/directive​-eu​-2018​-2001​-on​-the​-promotion​-of​-the​-use​-of​-energy​
-from​-renewable​-sources/
Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of
the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/
EC and 2003/30/EC. Retrieved from http://​eur​-lex​.europa​.eu​/LexUriServ​/LexUriServ​.do​?uri​=​OJ:​L:​2009:​140:​
0016:​01:​EN:​HTML
Eckertová, L. (1996). Získávání sluneční energie. Doprovodný metodický text k videokazetě v rámci
vzdělávacího programu Energie pro každého. Praha: ČEZ, a.s.
Energetický regulační úřad. (2010b). Roční zpráva o provozu ES ČR 2009 – ERÚ. Retrieved from http://​www​.eru​
.cz​/user​_data​/files​/statistika​_elektro​/rocni​_zprava​/2009​/index​.htm
Energetický regulační úřad. (2013). Roční zpráva o provozu ES ČR 2012. Praha: Oddělení statistik ERÚ. Retrieved
from http://​www​.eru​.cz​/user​_data​/files​/statistika​_elektro​/rocni​_zprava​/2012​/RZ​_elektro​_2012​_v1​.pdf
Energetický regulační úřad. (2018). Roční zpráva o provozu ES ČR 2017. Praha: Oddělení statistik ERÚ. Retrieved
from http://​www​.eru​.cz​/documents​/10540​/462820​/Rocni​_zprava​_provoz​_ES​_2017​.pdf​/521bff99​-fdcf​-4c86​
-8922​-3a346af0bb88
Energetický regulační úřad. (n.d.) Licence – databáze. Retrieved from http://​licence​.eru​.cz/
Energy Informative. (n.d.). How a Geothermal Power Plant Generates Electricity. Retrieved from
https://​energyinformative​.org​/how​-a-geothermal​-power​-plant​-generates​-electricity/
Enviweb.cz. (2017). Nová legislativa: Stát chystá aukce pro OZE a podpoří akumulaci energie. Retrieved from
http://​www​.enviweb​.cz​/rss​/149848
Euractiv.cz. (2019). Český plán nevyužívá potenciál obnovitelných zdrojů, tvrdí ekologové. Retrieved from
https://​euractiv​.cz​/section​/energetika​/news​/cesky​-plan​-nevyuziva​-potencial​-obnovitelnych​-zdroju​-tvrdi​
-ekologove/
European Commission, & Joint Research Centre. (n.d.). PVGIS Solar Irradiation Data. Retrieved from
http://​re​.jrc​.ec​.europa​.eu​/pvgis​/apps​/radmonth​.php​?en​=&​europe
Renewables 145
European Commission. (2018). Clean Energy for all Europeans. Retrieved from https://​ec​.europa​.eu​/energy​/en​
/topics​/energy​-strategy​-and​-energy​-union​/clean​-energy​-all​-europeans
Global Energy Network Institute (GENI). Wind Energy Potential in the Czech Republic. Retrieved from
http://​www​.geni​.org​/globalenergy​/library​/renewable​-energy​-resources​/europe​/Wind​/wind​-czech​.gif
Hnutí DUHA. (2010). Státní energetická koncepce: uhlí versus hi-tech. Retrieved from
http://​www​.hnutiduha​.cz​/publikace​/SEK​_uhli​_versus​_hi​-tech​.pdf
IEA. (2018)., Renewable energy policies. Retrieved from https://​www​.iea​.org​/topics​/renewables​/policies/
IRENA. (2017). PPT: Wigand, F., ECOFYS, RES auctions – Insights for the Energy Community. Retrieved from
https://​www​.energy​-community​.org​/dam​/jcr:​6dcf3b31​-9109​-4c9f​-98ae​-83b26f15e285​/WSRES032017​
_Ecofys​.pdf.
Kučera, J. (2016). Jak udělat Evropu zelenější. Česká pozice.cz. Retrieved from http://​ceskapozice​.lidovky​.cz​/jak​
-udelat​-evropu​-zelenejsi​-dp9​-/tema​.aspx​?c=​A160525​_171703​_pozice​-tema​_lube
Ministerstvo průmyslu a obchodu. (2015a). Aktualizovaná státní energetická koncepce. Retrieved from
https://​www​.mpo​.cz​/dokument158012​.html
Ministerstvo průmyslu a obchodu. (2016). Národní akční plán pro obnovitelné zdroje. Retrieved from https://​
www​.mpo​.cz​/cz​/energetika​/elektroenergetika​/obnovitelne​-zdroje​/narodni​-akcni​-plan​-pro​-obnovitelne​
-zdroje​-energie​--169894/
Ministerstvo průmyslu a obchodu. (2018) MPO připravilo novelu zákona o podporovaných zdrojích energie.
Retrieved from https://​www​.mpo​.cz​/cz​/rozcestnik​/pro​-media​/tiskove​-zpravy​/mpo​-pripravilo​-novelu​-zakona​
-o-podporovanych​-zdrojich​-energie​--241328/
Ministerstvo průmyslu a obchodu. (2019a). Rozvoj podporovaných zdrojů energie do roku 2030 (podkladový
dokument NKEP). Retrieved from https://​www​.mpo​.cz​/cz​/energetika​/elektroenergetika​/obnovitelne​-zdroje​
/rozvoj​-podporovanych​-zdroju​-energie​-do​-roku​-2030​-podkladovy​-dokument​-nkep​--244303/
Ministerstvo průmyslu a obchodu. (2019b). Návrh vnitrostátního plánu v oblasti energetiky a klimatu České
republiky. Retrieved from https://​www​.mpo​.cz​/cz​/energetika​/strategicke​-a-koncepcni​-dokumenty​/navrh​
-vnitrostatniho​-planu​-v-oblasti​-energetiky​-a-klimatu​-ceske​-republiky​--242761/
Murtinger, K. (2008, July 17). Solární energie – kolik kWh lze získat? Výhody a nevýhody. Nazeleno.cz Retrieved
from http://​www​.nazeleno​.cz/
Nazeleno.cz (n.d.). Fotovoltaika. Retrieved from http://​www​.nazeleno​.cz/
Oenergetice.cz. (2018). Velké solární elektrárny nebudou zařazeny do aukcí, MPO nepočítá s jejich podporou.
Retrieved from https://​oenergetice​.cz​/elektrarny​-cr​/velke​-solarni​-elektrarny​-nebudou​-zarazeny​-do​-aukci​
-mpo​-nepocita​-s-jejich​-podporou/
Oenergetice.cz. (2019a). ERÚ a SEI budou koordinovat cenové kontroly podpory zdrojům. Retrieved from
https://​oenergetice​.cz​/urady​-instituce​/eru​-a-sei​-budou​-koordinovat​-cenove​-kontroly​-podpory​-zdrojum/
Oenergetice.cz. (2019b). Česko platí v průměru na 1 MWh nejvyšší dotace na obnovitelné zdroje v Evropě.
Retrieved from https://​oenergetice​.cz​/obnovitelne​-zdroje​/srovnani​-dotaci​-pro​-oze​-v-evrope/
Photon Energy. (n.d.). Retrieved from http://​cz​.photonenergy​.com​/nase​-projekty
Podporuji využívání alternativních zdrojů. (2008). Energie 21. 2008 (2), pp. 8-9.
Pokorná, V. (2018). Renewable energy potential in the Czech Republic: Obstacles to achieve it. Europeum.
Retrieved from http://​www​.europeum​.org​/data​/articles​/pct5​.pdf
Poncarová, J. (2008, November 24). Větrná energie a její využití v České republice. Nazeleno.cz. Retrieved from
http://​www​.nazeleno​.cz/
Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on
the Governance of the Energy Union and Climate Action, amending Regulations (EC) No 663/2009
and (EC) No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC,
2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of
the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013
of the European Parliament and of the Council (Text with EEA relevance.) Retrieved from https://​eur​-lex​
.europa​.eu​/legal content/EN/TXT/?uri=uriserv:​OJ​.L_.2018​.328​.01​.0001​.01​.ENG​&​toc​=​OJ:​L:​2018:​328:TOC
Šafařík, M. (2000). Konkurenceschopnost obnovitelných přírodních zdrojů v nedohlednu? – I. část. Magazín
Energie, 2000(5), pp. 62-65.
Šafařík, M. (2000). Konkurenceschopnost obnovitelných přírodních zdrojů v nedohlednu? – II. část. Magazín
Energie, 2000(6), pp. 58-61.
Renewables146
Stanovisko prezidenta, jímž vrátil Poslanecké sněmovně zákon o podporovaných zdrojích energie a o změně
některých zákonů. Retrieved from http://​www​.platforma​-oze​.cz​/media​/188​.pdf
Svoboda, J. (2017). Zásadní problém podpory obnovitelných zdrojů nespočívá ve znění zákona, nýbrž v jeho
nedodržování. Ekolist.cz. Retrieved from https://​ekolist​.cz​/cz​/ekolist​/mesicni​-souhrn​/jiri​-svoboda​-zasadni​
-problem​-podpory​-obnovitelnych​-zdroju​-nespociva​-ve​-zneni​-zakona​-nybrz​-v-jeho​-nedodrzovani
Teplárenské sdružení České republiky. (2018). Special Report. Retrieved from https://​www​.csas​.cz​/content​
/dam​/cz​/csas​/www​_csas​_cz​/dokumenty​/analyzy​/Tepl​%C3​%A1renstv​%C3​%AD​%20v​%20​%C4​%8CR​_2018​
_10​_public​.pdf
Trnavský, J. (2008a). Nedostatek potravin nelze svádět jen na biopaliva. Energie 21, 2008(3), pp. 24-25.
Trnavský, J. (2008b). Teplo z obnovitelných zdrojů. Energie 21, 2008 (6), pp. 42-43.
Trnavský, J. (2010). Hlavní rozdíly mezi zemědělskou a komunální bioplynovou stanicí. Energie 21, 2010 (3), pp. 14-15
Úřad vlády ČR, & Nezávislá energetická komise (ÚVČR; NEK) (2008, September 30). Zpráva Nezávislé odborné
komise pro posouzení energetických potřeb České republiky v dlouhodobém časovém horizontu. Praha.
Usporim.cz (2010, October 10). Největší solární elektrárny v ČR. Retrieved from http://​www​.usporim​.cz/
Vinšová, H. (2009, July 21). Solární park Velká nad Veličkou už dodává do sítě. Hospodářské noviny. Retrieved
from http://​stavitel​.ihned​.cz/
Vobořil, D. (2015). Příčiny solárního boomu v České republice. Oenergetice.cz. Retrieved from https://​
oenergetice​.cz​/obnovitelne​-zdroje​/priciny​-solarniho​-boomu/
Vodní elektrárny v ČR (Hydroelecgric power plants). Retrieved from http://​www​.vodni​-tepelne​-elektrarny​.cz​
/vodni​-elektrarny​-cr​.htm
Weger, J. (2008). Biomasa jako zdroj energie. Energie 21, 2008(1), pp. 9-11.
Zajíček, M. (2010). Účet za 700 miliard korun - Ekonomické dopady současného systému podpory
fotovoltaických elektráren. Pro-Energy magazín, 2010(3), pp. 62-68.
Zákon 406/2000 ze dne 25. října 2000 o hospodaření energií. Retrieved from http://​portal​.gov​.cz​/wps​/WPS​
_PA​_2001​/jsp​/download​.jsp​?s=​1​&​l​=​406​%2F2000
Zákon 458/2000 ze dne ze dne 28. listopadu 2000 o podmínkách podnikání a o výkonu státní správy
v energetických odvětvích a o změně některých zákonů (energetický zákon). Retrieved from
http://​portal​.gov​.cz​/wps​/WPS​_PA​_2001​/jsp​/download​.jsp​?s=​1​&​l​=​458​%2F2000
Zákon č. 17/1992 Sb., o životním prostředí, ve znění pozdějších předpisů. Retrieved from http://​www​.mzp​.cz​
/www​/platnalegislativa​.nsf​/d79c09c54250df0dc1256e8900296e32​/5b17dd457274213ec12572f3002827de​
?OpenDocument
Zákon č. 180/2005 Sb., o podpoře výroby elektřiny z obnovitelných zdrojů energie a o změně některých zákonů
(zákon o podpoře využívání obnovitelných zdrojů). Retrieved from http://​www​.tzb​-info​.cz​/pravni​-predpisy​
/zakon​-c-180​-2005​-sb​-o-podpore​-vyroby​-elektriny​-z-obnovitelnych​-zdroju​-energie​-a-o​-zmene​-nekterych​
-zakonu​-zakon​-o-podpore​-vyuzivani​-obnovitelnych​-zdroju
Zákon ze dne 31. ledna 2012 o podporovaných zdrojích energie a o změně některých zákonů. Retrieved from
http://​ftp​.aspi​.cz​/opispdf​/2012​/059​-2012​.pdf
Zámyslický, P. (2009). Politika ochrany klimatu v České republice. Časopis Ochrana přírody, 2009(zvláštní číslo).
Retrieved from http://​www​.casopis​.ochranaprirody​.cz/
The Electric Power Industry 147
Chapter 8: The Electric Power Industry
Tomáš Vlček, Patrícia Brhlíková
8.1	 The Electricity Grid of the Czech Republic
According to the Grid Code of the transmission system operator, the power system (distribution, transmission)
is “interconnected equipment for the generation, transmission, transformation, and distribution of electricity including
electrical connection and direct lines, measurement systems, protection, control, safety, information, and
telecommunications” (see ČEPS, 2018b, p. 5). The power system consists of several parts, specifically electricity
generating facilities, electricity stations, electricity grids, and electricity supply lines. Electricity generating facilities
are power plants, meaning the industrial stations serving for the transformation of any kind of energy into
electricity. Electrical stations are a set of buildings and equipment at the nodes of the power system. They enable
transformation or distribution of the same voltage levels in several directions, transformation of alternating
current to direct or vice versa, occasionally also providing the transformation of alternating current into current
of different frequency or compensation of a blind current. Electricity grids are sets of interconnected electricity
stations and electricity supply lines aimed at transmitting and distributing electricity. They are divided into transmission
grids (transmission systems) for remote distribution at the levels of 220 kV and 400 kV and distribution
grids (distribution systems) for distribution from the transmission system to end users carrying 110 kV, 35 kV and
22 kV of voltage. 110 kV grids are sometimes marked as primary, because they can sometimes serve for transmitting
capacity into the system from power plants with less capacity (for example, hydropower). Industrial grids
also belong in this category, with voltage levels of 22 kV, 10 kV, 6 kV and 0.4 kV. Grids transmitting power directly
to the consumption site are marked as local, ranging around the voltage level of 0.4 kV. Electricity supply lines are
the basic items of the grid, connecting two points, made of a set of conductors, insulation, and structures for mechanical
reinforcement. The basic division differentiates exterior supply lines, i.e. uncovered lines on pylons with
insulators, from cable supply lines, placed in the ground, in passages, or on pylons (see Elektroenergetika I, p. 2).
There are several types of power plants in the Czech Republic. These vary from steam, water, nuclear, combined
cycle, gas, solar, wind and geothermal. Table 8.1 displays installed capacity across these power plants in
the Czech Republic as of December 31, 2018.
Tab. 8.1: Installed Capacity in the Czech Electricity Grid on December 31, 2018
Type of Power Station Installed Capacity (MWe) Percentage (%)
Thermal 11,075.4 49.7
Gas Combined Cycle 1,363.5 6.1
Gas Fired 909.7 4.1
Hydropower 1,088.7 4.9
Pumped-storage Hydropower 1,171.5 5.3
Nuclear 4,290.0 19.3
Wind 316.2 1.4
Solar 2,048.9 9.2
Geothermal Power 0 0
Total 22,263.9 100
Source: (Energetický regulační úřad, 2018a, p. 12)
The Electric Power Industry148
Installed capacity provides limited information about the consumption of electric power. Table 8.2 displays
the gross electricity consumption in the Czech Republic recorded in 2018. In terms of electricity production, power
plants are divided into base load and peak load. Base load, i.e. the stable minimum load of the power system,
is the provision of uninterrupted daily electricity for consumption. Based on the nature of operational processes,
base load is predominately covered by nuclear and thermal power plants whose regulation of operation is limited
(mainly nuclear power plants, see below). Peak load, by contrast, is the load of the power system that exceeds
the standard minimum level, supported by power plants that can quickly respond to changes on the demand
side, connect to the grid and ramp-up their production–mainly pumped-storage hydroelectricity, gas, combined
cycle, and some steam power plants. There are a vast number of peaks in the course of a single year, mainly depending
on weather, season, and time of day. For example, two peaks occur every day (mainly working days),
specifically, one between 5 AM and 8 AM, when people get up and turn on electric appliances, causing a rapid
rise in electricity consumption, and a significantly more moderate one between 4 PM and 6 PM, when people
return to their homes.
Tab. 8.2: Gross Electricity Production in 2018
Type of Power Station Electricity Production (GWh) Percentage (%)
Thermal 45,070.8 51.2
Gas-fired and Gas Combined Cycle 7,378.7 8.4
Nuclear 29,921.3 34.0
Hydropower (incl. Pumped-storage Hydroelectricity) 2,677.8 3.0
Wind 609.3 0.7
Solar 2,338.6 2.7
Total gross production 87,996.4 100
Total net production 81,896.4 93.1% of gross production
Source: Energetický regulační úřad, 2018a, percentages by P. Brhlíková
An electrical station is “a complex of buildings and equipment of the grid serving for the transformation, compensation,
conversion or transmission and distribution of electricity, including facilities needed to secure the operation
thereof” (see ČEPS, 2018b, p. 43). Electrical stations are functional facilities at the distribution electrical
nodes. They are the centre of the majority of distribution system functions, including switching, securing, measuring
and control. Substations with transformer function “serve to change electrical voltage at the same frequency
and distribution of electricity or to execute galvanic separation of one part of the network from another”; switching
stations serve to “distribute electricity at the same voltage without transformation and converting”; converter stations
serve to “convert the type of voltage or its frequency”; and compensation stations serve to “counterbalance
reactive segments in the alternating current or line parameters” (see Elektroenergetika I, p. 5). Electrical stations
may be divided into those stations with less than 1 kV AC (alternating current) and those with more than 1 kV AC.
Electricity supply lines represent “the important component of every power system, enabling remote transmission
of electric energy and signals. Electrical supply lines are made of conductors, which serve to pipe electrical
current, and insulation separating the live parts from their surroundings (excluding naked lines)” (see Vrána
& Kolář, 2000, p. 2). We differentiate between four types of electrical line: naked wire lines (predominantly installed
outdoors rather than indoors, such as, for example, trolley lines), tube and bar lines, wire-bridge lines, and cable
lines (see Vrána & Kolář, 2000, p. 2).
As previously indicated, electricity grids are divided into transmission systems and distribution systems.
A transmission system is “[a] mutually interconnected system of 400 kV and 220 kV lines and equipment and
selected 110 kV lines and equipment (see appendix in Part VII of the Grid Code) serving for the transmission of
electricity throughout the Czech Republic and interconnected with the power systems of neighbouring countries
and including protection, measurement, monitoring, safety, information, and telecommunications systems” (see
ČEPS, 2018b, p. 41). A Distribution system is a “mutually connected set of lines and equipment with voltage levels
of 0.4 to 110 kV (with the exception of selected 110 kV lines which are part of the transmission system), providing
the distribution of electricity in a specified area of the Czech Republic; responsible for measurement systems,
protection, monitoring, safety, information, and telecommunications” (see ČEPS, 2018b, p. 36). Transmission and
distribution systems are organized and operated in the public interest in line with the Energy Act.
The Electric Power Industry 149
The transmission system in the Czech Republic is operated by ČEPSF, a. s., established in 1998 by splitting
off the Transmission System Department from ČEZ (and merger with the dissolving company ENIT, a. s.). ČEPS,
in the role of a natural monopoly, is the holder of an exclusive license for the operation of the transmission system
in the Czech Republic. Since September 29, 2009, the Ministry of Industry and Trade was majority shareholder
in the company with an 85% stake. The holder of the remaining 15% of stock was the Ministry of Labour
and Social Affairs. The exercise of shareholder rights was state-commissioned to the Ministry of Industry and
Trade (see ČEPS, 2010, pp. 18–19). Since 2012, the Ministry of Industry and Trade has acted as the sole shareholder.
(see ČEPS, 2018a)
The transmission system with voltage levels of 400 kV, 220 kV and a limited number of 110 kV lines owned by
ČEPS serves for the transmission of electricity both within the Czech Republic to the broader European electricity
market. The Czech Republic is interconnected with the transmissions systems of all neighbouring countries
by means of 17 cross-border lines, thereby cooperating with the whole electric power system of continental
Europe in a synchronized manner. This high level of interconnectedness brings reliable operation and extensive
cross-border trading on the one hand, but it also exposes the Czech grid to unscheduled transit overflows or
operational failures in neighbouring grids. (see ČEPS, 2018a, p. 39). The ČEPS transmission system is a set of 43
substations with voltage levels of 400 kV and 220 kV, four 400/220 kV transformers, 49 400/110 kV transformers
and 21 220/110 kV transformers. Moreover, there are currently four phase-shifting transformers (PST) installed
on interconnectors with German transmission system operated at 50 Hertz. Furthermore, the transmission grid
of the Czech Republic consists of 3,735 km of 400 kV lines, 1,909 km of 220 kV lines, and 84 km of 110 kV lines
(see ČEPS, 2018a).
Distribution systems serve to distribute electric power from a source (the superordinate system or the local
power plant) to appliances. The voltage of distributed electricity at the public distribution point may be 110 kV,
22 kV, 0.4 kV, with the different voltage networks separated from each other via substations where the voltage is
transformed (see Elektroenergetika I, p. 3). If electricity is distributed at the same voltage, transformation is not
necessary and the distribution proceeds by means of switching stations.
There are four companies operating distribution systems in the Czech Republic: ČEZ Distribuce, a subsidiary
of ČEZ; E.ON Distribuce, a subsidiary of E.ON Czech Holding AG; PREdistribuce, a. s., a subsidiary of Pražská energetika,
a. s.; and LDS Sever, in the Unicapital portfolio. The companies are designated as regional operators of
distribution systems (RPDS) and are subject to regulatory oversight by the Energy Regulatory Office (ERÚ) (see
ERÚ 2018).
In addition to the regional distribution systems (RDS), the Czech Republic has local distribution systems (LDS),
even though the term itself is not embodied in any legal act. Local distribution systems are subordinate to regional
systems, providing that the regional operators deliver electricity supplies to local operators. Local distribution
systems are not directly connected to the transmission system. They are connected to the particular regional
system and run based on license provisions. There are rather large local distribution systems both in terms of
geographical scope and consumption or production of electricity, usually located at the sites of former industrial
agglomerations, such as mines, steel mills, or large industrial facilities. There are, naturally, also very small local
distribution systems (see Chemišinec, Marvan , Nečesaný , Sýkora , & Tůma, 2010, p. 30).
8.2	 The Regulatory and Safety Framework of the Electric Power
Industry
8.2.1 State Regulatory Framework
According to The Energy Act, the exercise of public administration in the energy sectors and therefore in the electric
power industry falls under the purview of the Ministry of Industry and Trade, Energy Regulatory Office, and
State Energy Inspection Board. Besides these primary regulatory bodies, there are the Czech electricity and gas
market operator (OTE), and from a technical standpoint, ČEPS and the Czech Office for Standards, Metrology
and Testing (UNMZ).
The Electric Power Industry150
Tab. 8.3: Regulatory Organs in the Electric Power Sector and Their Role
Organ The Ministry of Industry and Trade (MPO)
Headquarters Prague, Na Františku 32
Web www.mpo.cz
Role The MPO issues state approval to build selected gas facilities and gives its opinion on the building of new sources and direct lines in
the electric power sector in accordance with the conditions specified in a special section of the Energy Act, develops the energy policy
of the state, ensures adherence to obligations arising from international agreements binding on the Czech Republic or obligations arising
from membership in international organizations, provides information to the European Commission, arranges tenders for new generating
capacities, is for supply safety reasons entitled to decide whether to give preference to the connection of those electricity and gas
plants that employ domestic primary energy fuel sources to an extent not exceeding 15% of the aggregate primary energy necessary for
the generation of electricity and gas in a given calendar year, has the right to give opinions on landscape development policy, and submits
the national report to the Commission on the Situation in the Electricity and Gas Sectors.
Organ Energy Regulatory Office (ERU)
Headquarters Jihlava, Masarykovo náměstí 5
Web www.eru.cz
Role The main tasks of the Energy Regulatory Office are to support economic competition, to support the use of renewable and secondary
energy sources, to protect the combined production of electric and thermal energy as well as the protection of consumers’ interests in
those areas of the energy sector where competition is impossible. The Energy Regulatory Office exercises the authority of a regulatory
institution pursuant to the regulation on conditions for access to the network applicable to the cross-border exchange of electricity and
regulation on conditions for access to gas purchasing systems. The Office sets the grounds for granting, amending, and suspending licenses,
imposes a supply obligation beyond the scope of the license as well as the obligation to let another license holder use energy
facilities in cases of emergency to exercise the supply obligation beyond the scope of the license, regulates prices based on special legal
regulations, and may temporarily suspend the obligation to enable third party access. The Office also decides on disputes, monitors
compliance with the obligations of license holders, imposes fines based on the special act, approves or establishes the Transmission
System Operating Rules and the Distribution System Operating Rules for the electricity sector, as well as business conditions for electricity
market operators, the Transmission System Operator Code and the Distribution System Operator Code for the gas sector.
Organ State Energy Inspection (SEI)
Headquarters Prague, Gorazdova 24
Web www.cr-sei.cz
Role The State Energy Inspection, upon the impetus of the Ministry of Industry and Trade of the Czech Republic, Energy Regulatory Office or
under its own initiative, oversees compliance with Acts Nos. 458/2000 Coll., 406/2000 Coll., 526/1990 Coll., 180/2005 Coll. and Regulation
No. ES/1228/2003 of the European Parliament and the Council. Based on its own findings, it imposes fines for breaches of legal regulations.
SEI’s expertise takes in the entire energy sector (electric power industry, heating supply, and gas sectors), and is well-established
as an authority among both energy suppliers and users. SEI also performs a vast number of specific professional activities for the Ministry
for Industry and Trade as well as for other predominantly state institutions.
Organ The Czech Electricity and Gas Market Operator (OTE)
Headquarters Prague, Sokolovská 192/79
Web www.ote-cr.cz
Role Among its other responsibilities, OTE organizes the short-term electricity and gas markets in cooperation with the transmission system
operator, as well as organizing the regulating energy balancing market, evaluating and settling imbalances throughout the Czech
Republic and doing the accounting. It prepares documents for draft Electricity Market Rules and Gas Market Rules, drafts and, following
the approval of the Energy Regulatory Office, releases the market operator’s business terms for the power and gas sectors with remote
access and administers the National Register of Greenhouse Gas Emissions.
Organ ČEPS, a. s.
Headquarters Prague, Elektrárenská 774/2
Web www.ČEPS.cz
Role ČEPS, a. s. has an inherent monopoly over electricity transmission. It is regulated by the above-mentioned bodies and accordingly, on
the basis of the Energy Act, regulates the technical aspects of the power system by means of the Grid Code. The company’s scope as
a transmissien system operator is embedded in this document.
Organ Czech Office for Standards, Metrology and Testing (UNMZ)
Headquarters Prague, Gorazdova 24
Web www.unmz.cz
Role The main mission of the Office is to perform tasks arising from Czech legislation on technical standardization, metrology and testing, and
tasks related to the harmonization of Czech technical regulations and standards with the technical regulations of the European Union.
Since 2009, the Office has provided for the development and publication of Czech standards.
Source: Zákon 458/2000; Česká republika – Státní energetická inspekce; Energetický regulační úřad; ČEPS, a. s.; OTE, a. s.; Úřad pro
technickou normalizaci, metrologii a státní zkušebnictví; composed by T. Vlček.
The Electric Power Industry 151
8.2.2 Supranational Regulatory Framework
The first EU Directive whose implementation was requested as part of the harmonization of the Czech legal framework
with the legal framework of the European Community was Directive 96/92/EC (see “Directive 96/92/EC,”
1997, p. 0020–0029) of December 19, 1996, on electricity market liberalization. The directive became part of
the Czech legal system when it was implemented in Act No. 458/2000 Coll. This directive was the first to define
unbundling, i.e. separation of electricity trading from the trade in its transmission and distribution. Chapter VI
established the unbundling of accounts, i.e. keeping separate the production, transmission, and distribution accounts
in energy companies. However, Directive 96/92/EC allowed for alternative options regarding Third Party
Access (TPA) to be adopted within Member States, and hence diverse market conditions across Europe emerged.
This is despite the fact that the electricity and gas markets may appear open to some extent in all Member States.
(see Asociace energetických manažerů, 2016)
Directive 96/92/EC was replaced by Directive 2003/54/EC of the European Parliament and the Council
(Directive 2003/54/EC, 2003) from June 26, 2003, Concerning Common Rules for the Internal Market in Electricity
and Repealing Directive 96/92/EC, which had requested an even higher degree of market openness. The idea
behind this request was to hasten the liberalization process. This document required that energy related activities
be separated at the managerial level, and that electric companies be divided legally (so-called legal unbundling)
into two entities (transmission traders and electricity traders). The directive even shortened the deadlines
for market opening. On this basis, the member states were required to separate transmission networks from
the generation and sale of electricity, either by ownership unbundling (i.e. the creation of new companies trading
in electricity transmission) or as an independent system operator – ISO (meaning that the transmission network
would remain in a company’s ownership, but only after previous approval by the European Commission).
Directive 2009/72/ES of the European Parliament and the Council of July 13, 2009, Concerning Common
Rules for the Internal Market in Electricity and Repealing Directive 2003/54/EC entitles users to change electricity
suppliers free of charge within a three-week period or to receive reimbursement from their energy company.
The undertaking of operators of electricity markets was broadened so as to also include the gas sector
(see OTE, 2010a, s. 8–9).
Tab. 8.4: The Process of Electricity Market Liberalisation in the Czech Republic
Stage Eligible customers
From 1/1/2002 Customers whose yearly electricity use exceeds 40 GWh (eligible customers) are entitled to choose a supplier.
From 1/1/2005 Customers whose yearly electricity use exceeds 9 GWh are entitled to choose a supplier.
From 1/1/2005 Customers whose yearly electricity use exceeds 100 MWh are entitled to choose a supplier.
From 1/1/2006 All customers (end users) are entitled to choose a supplier.
Source: (Müller, 2002, pp. 53–55), (Energetický regulační úřad, 2011)
The formation of a single electricity market was generally criticized on the grounds that it was unnatural.
Generation, transmission and distribution systems did not emerge as independent units, but had simply undergone
interconnected joint development. The monopolistic position of the entire electricity sector was, therefore,
natural. Under the liberalised market concept, a natural monopoly1
applies only to grids (electricity transmission
and distribution systems) and system dispatchers (unbundled from generation). Miloslav Píha, however, for example,
thinks that production also falls under the category of a natural monopoly. In his mind it is absurd to have
“production, (whose integration gave the incentive for the emergence of the transmission system) and the system
dispatcher which gave birth to the monopoly, denied their natural monopoly character and instead to be recognized
for activities (of transmission and dispatching) caused by this integration as auxiliary mediums. For the producing
system to be competitive, it would have to be split into several independent producing entities, or find more
independent producers and suppliers of electricity and thereby create more production entities to compete in
supplies for the transmission system; this would, in turn, employ the competition through the system dispatcher”
(see Píha, 1994, p. 69). Based on this thinking, one might, for example, argue that the most frequently criticized
1		 A natural monopoly emerges if a company in a particular region produces and sells its products cheaper, i.e. with fewer costs, than
the competing company or group of companies, but never for power or institutional reasons (see Kubín, 2009, p. 238).
The Electric Power Industry152
position of ČEZ in the field of electricity production in the Czech Republic, which shows some monopolistic features,
is basically a reflection of the development the Czech electric power sector has seen through its history.
Kubín, by contrast, understands a natural monopoly (in the mid-term horizon) only in terms of the transmission
and distribution of electricity, because “within the chain production – transmission – distribution – consumption,
a combined cycle, pressurized fluid combustion or the new generation of nuclear reactors meeting safety and
environmental requirements represents a fiercely competitive setting for production, with competition also arising
also at the final consumption level” (see Kubín, 2009, p. 238).
20 years later, we may say that ČEZ still maintains a strong position (60.2% of installed capacity, 67.1% of gross
electricity production and 64.1% of electricity distribution (see Energetický regulační úřad, 2018a), but the opening
of the electricity market has led to an increase in the number of electricity producers and distributors, while other
companies on the market are expected to thrive because of the increasing interest in renewables. In the long
term, it therefore seems that competitiveness can be achieved even within a production system with a heavily
burdened history, though with certain restrictions.
If we are to at least marginally assess the current position of ČEZ in the electricity sector of the Czech Republic,
we should note that the majority stake in the company is held by the state2
, but it is still a trading company whose
chief objective is profit. The company always seeks to respond to the state energy papers in a flexible manner;
but the latter are changed and updated too frequently to have the company rely on them entirely. Václav Bartuška,
Ministry of Foreign Affairs of the Czech Republic’s Special Envoy for Energy Security, has very aptly warned about
this situation. “The state does not have a long-term strategy, it does not have its own long-term vision of what it
wants to do with CEZ, so the company, of course, alone looks for what to build or what to do business with” (see
“Otázky Václava Moravce,” 2009). Such a company, naturally, requires a strategic plan for decades ahead and
is incapable of functioning in an entirely flexible manner. Its dominant position together with an effort to seek
out a clear direction for the Czech energy sector, which cannot be found in state papers changed or updated
with every incoming government, is, in consequence, often the target of criticism. The company thus noted that
the conceptual documents included a rather steady approach to the issue of coal and nuclear use, which also
suited it in economic terms. Because the company was taking part in preparing these documents, it strove to
promote a steady path as well. This also furnished the incentive to open a discussion on environmental mining
limits, to make some foreign acquisitions, to retrofit coal power plants, prepare and call for a tender for the new
Temelín nuclear units, cooperate with Serbia and Slovenia in the future construction and operation of new nuclear
units, etc. Simply put, ČEZ does business where it sees long-term, consistent prospects. The demonization of
the company by the media has not always been justified (see Černoch, Vlček, & Zapletalová , 2010, p. 276–277).
In June 2009, during the Czech Presidency of the Council of the European Union and the European Council in
the firsthalfofthatyear,the ThirdEnergyLiberalizationPackagewasadopted(Directive714/2009/EC).The Package
harmonized the authorities and responsibilities of the regulatory agencies while requesting their complete independence
(i.e. the unbinding of the regulatory fund from other parts of the state budget). In the Czech Republic,
this body was the Energy Regulatory Office. Regulatory agencies are supposed to be overseen by the Agency
for the Cooperation on Energy Regulators (ACER).3
The main objective of ACER is to coordinate regional and
pan-European initiatives, and to give guidance and develop network codes with ENTSO-E. Moreover, the new
2019 regulatory package extends ACER´s powers to a degree. The transmission system operators are supposed
to harmonize their activities and coordinate at the EU level through the organization ENTSO-E (European Network
of Transmission System Operators for Electricity) (see Třetí liberalizační balíček v energetice, 2009). ENTSO-E
currently brings together 43 system operators (TSOs) from 36 countries. The previous associations of system
operators in Europe were dissolved upon the emergence of ENTSO-E (thus the previous CENTREL and UCTE
as well). ENTSO-E’s ambition is to become the focal point for all European technical, business, and political aspects
of operation and cooperation between transmission system operators. ENTSO-E, together with participating
transmission system operators, endeavours to build pan-European electricity trading based on cooperation,
security of supplies, safe integration of renewable energy sources, and the development of modern, reliable
networks (see ENTSO-E, 2019).
2	 The ownership structure as of June 30, 2018, is as follows: The Ministry of Finance of the Czech Republic – 69.78%, other legal persons
– 19.39%, natural persons – 10.16%, ČEZ, a.s. 0.67% (see ČEZ, 2019b)
3	 ACER was established in 2011 and is headquartered in Ljubljana, Slovenia.
The Electric Power Industry 153
Liberalization of the electricity market led to significant multiplication of new electricity traders. As of 2011,
there were 37 suppliers in the Czech Republic, with more than 100 consumption and connection sites and a total
of 64 entities taking part in the OTE platform. In 2019, there are 78 suppliers and a total of 117 entities taking part
in the OTE electricity trading platform. The market has truly experienced a massive response, since by January
2012 the Czech Republic numbered already 1,105,274 low and high energy users who had changed their electricity
suppliers. Change of electricity supplier is significant on yearly basis–570,511 consumption and connection
sites registered supplier changes in 2018 compared to 57,689 in 2008. Moreover, OTE reports that during the first
two months of 2019, a new maximum was reached, with as many as 160,984 cases in which users changed supplier.
(see OTE, 2019a)
Tab. 8.5: Total Consumption and Connection Sites That Have Changed Supplier
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
57,689 96,744 249,181 448,860 473,128 374,440 333,542 277,756 359, 536 357,847 570,511
Source: OTE, 2019a
The largest alternative electricity suppliers as of March 2019 were innogy Energie, s.r.o. (424,246 users)
Bohemia Energy Entity, s. r. o. (389,784 users); Centropol Energy, a. s., (227,985 users); COMFORT ENERGY s.r.o.
(84,795 users), X Energie, s.r.o. (74,016 users), MND a.s. (50,343 users), and LAMA energy a.s. (42,740 users) (see
OTE, 2019a).
What these sorts of companies have in common is a similar strategy for reaching potential users. They employ
door-to-door salespeople and call centres that offer products and services directly to users. In general, growing
competition is the main driver for a more aggressive and often deceitful strategy to persuade customers to
change suppliers. In this highly competitive environment, with electricity prices relatively higher than in previous
years, unsuccessful suppliers are being forced out of the market. Losing the licence is often caused by the fact
that a strategy based on yesterday’s low spot-prices leads today to an inability to secure supplies at the new
higher price. From the customer’s point of view, security of supply in the case of bankruptcy is then ensured by
the supplier of last resort according to the Energy Act for a maximum period of 6 months4
. (see Energetický regulační
úřad, 2017)
We should recognise this as a contemporary trend triggered by the liberalization of the electricity market. It hits
a centralized electricity sector that has been settled for decades, one founded on the principle of large centralized
power plants and complex distribution grids. We may therefore expect that the transition to a modern decentralized
system that embraces small production units, numerous electricity traders, and suppliers to end users–and
with a large share of electricity from renewable sources, directed to the system more by consumption than production–
will for these reasons proceed at a notably slower pace than was the case in neighbouring Germany.
8.3	 The Transmission and Regulation of Electricity
Due to the specific characteristics of electricity, the power system is a dynamic, permanently active system,
changing every second. Most production facilities and appliances are currently optimised at a frequency of 50
Hz. “This frequency in the grid means that the active power produced (equal to the total of all active power from
each producing generator in the system) equals the power consumed (the total inputs of all appliances and losses
in grids)” (see Šolc, 2008, p. 50). A state of balanced electricity supply and its off-take is the optimum condition
in the grid, and is mandatory if the power system is to remain stable.
A change in both demand and supply is the logical order of events when these changes must be reflected immediately
on either the supply or demand sides; else there is a risk of initial frequency deviation followed by overvoltage
or undervoltage, and this may shortly thereafter lead to the collapse of the power system and brownouts5
,
4	 Supplier of last resort is defined as the distribution system operator in the respective area – hence for majority of czech consumers it
is CEZ. The tranfer in case the original supplier is not able to secure the supply is performed automatically via the market operatot. (see
Energetický regulační úřad, 2017)
5	 A brownout is a partial outage or larger forced interruption or limited electricity supply within a larger area.
The Electric Power Industry154
blackouts6
, or island operation7
. At the point when consumption (or demand) rises, there is a shortage at the production
level (i.e. supply), resulting in an immediate drop in frequency and a consequent drop in voltage. In order
to maintain frequency, the production side must react forthwith to increase the volume of power produced and
stabilise the frequency at the desired 50 Hz level. Likewise, if consumption drops and production does not respond
to the situation, or rises without taking into actual consumption, the result will be an increase in frequency
and, consequently, overvoltage of the grid. Such a situation must be rapidly regulated through attenuation or
disconnection of the production of certain power plants. Balancing energy is not used for regulation of electricity
from renewables only, although its use has significantly increased with respect to Act No. 180/2005 Coll., on
the Promotion of Electricity Production from Renewable Energy Sources and Amending Certain Acts, which adds
to the previous obligation of electricity purchase to all licensed third parties within the meaning of the Energy
Act No. 458/2000 Coll. an obligation for preferential purchase of electricity from renewables to all licensed third
parties (TPA), provided that they have a license issued by the Energy Regulatory Office.
The reasons behind the above-mentioned situations vary, starting with planned and unplanned maintenance
and the decommissioning of production blocks, unexpected damage to transformers, networks, or distribution
lines, weather impacts (for example, snowdrifts, sharp drops in outdoor temperatures, etc.) through to really
drastic changes in electricity production from renewables (i.e. from wind and solar power plants). The cross-border
interconnection of systems contributes to the safety of the power system because the larger the system is,
the harder it is to significantly affect its frequency by increasing or decreasing consumption or production in some
of its components. On the other hand, considerable interconnectedness of transmission systems is accompanied
by the risk of “import/export” of these operational situations to the adjacent control areas, which may lead
to grid destabilisation of a larger area.
Different types of power plants have different capabilities for swift reductions or increases in production capacity.
For example, Czech nuclear power plants can change capacity in a relatively flexible manner by up to approximately
10% of installed capacity.8
Regulation above 10% would require a major intervention in production,
which would become apparent at the point where it is necessary to return to the previous capacity level, depending
upon the demanded regular interruption for tens of hours, days or even weeks. Power plants powered by water
(pumped-storage hydroelectricity, hydropower plants) are, in turn, capable of connection or disconnection
in just a few seconds up to tens of seconds9
, while power plants powered by gas (combined cycle, gas and fuel-fired)
take several minutes to reach this efficiency. Following the power balance, the Czech Republic reserve
and balancing resources provide so-called ancillary services. These are an inherent tool to make sure system
services are provided by the transmission system operator. In this respect, the transmission system operator is
obliged to secure the power balance, a reliable supply, and operational security via the availability of necessary
ancillary services and the interoperability of interconnected transmission systems. In other words, ancillary services
predominantly ensure frequency stability, adequate voltage levels, restoration from a total or partial system
blackout (black start), and island operation10
.
In the Czech Republic, ČEPS is entirely responsible by law for power balance, and the only provider of the aforementioned
system services on the transmission level. For this purpose, ČEPS procures ancillary services which
cover three main types of reserves (these are in more details displayed in table 8.6):
•	 primary control – represented by units which are able to detect frequency deviation automatically within seconds.
Primary control activation in Europe is governed by the solidarity principle of all synchronously interconnected
transmission system operators. The primary reserve in Continental Europe is estimated at approximately
3,000 MW11
. Therefore, respective TSOs contribute to this reserve by means of domestic sources on
6	 A blackout is a total or larger outage of electricity as a result of grid failure.
7		 Island operation is a disconnection of a part of the grid and its operation as an independent system. The quality of supplies is usually
significantly worse and unstable.
8	 The Temelín nuclear power plant, therefore, up to 100 MWe per block, i.e. 200 MWe, Dukovany NPP up to 80 MWe per block, i.e. 320
MWe (see ČEPS, a. s., 2010d, p. 20). The Temelín nuclear power plant is in reality, however, as a result of technical limitations, capable
of regulation at the level of +/- 5%, while the Dukovany NPP undergoes regulation only exceptionally.
9	 For example, the Dlouhé Stráně pumped-storage power plant is capable of moving from sleep mode to full capacity in 100 seconds.
10	 It is capable of running the blocks without the support of an external voltage source, of reaching the given voltage, connecting to the network,
and running in island operation mode.
11	 This reserve must cover an outage of two major generation units within the synchronous area.
The Electric Power Industry 155
a pro rata basis. The main aim of the primary reserve is to automatically adjust production in case of frequency
fluctuation. (see Asociace energetických manažerů, 2016)
•	 secondary control – serves for upward/downward regulation with an activation time of between 30 seconds
and 15 minutes provided by secondary reserves directly activated by the TSO, all of which must fulfil certain
technical requirements and certification criteria.
•	 replacement reserve – which allows exhausted secondary reserves to be restored. Tertiary reserves are usually
manually activated based on the specific request of the TSO, with a ramping-up time of up to 30 minutes.
Tab. 8.6: A Simplified Division of Regulation Reserves as part of ČEPS System Services
System Service Mark Time Framework Description
Frequency Containment
Process (Regulation Reserve
Seconds)
RZV 30 seconds Serves for automated primary frequency control (PR)
Minute Reserve available within
5 minutes (positive)
mFRR5 5 minutes Minute reserve available within 5 minutes (manual
Frequency Restoration Reserve, mFRR5)
Regulation Reserve available
within 10 minutes (positive)
aFRR+ 10 minutes Serves for secondary regulation; it consists of sources
available within 10 minutes (automatic Frequency
Restoration Reserve positive, aFRR+)
Regulation Reserve available
within 10 minutes (negative)
aFRR- 10 minutes Serves for secondary regulation; it consists of sources
available within 10 minutes (automatic Frequency
Restoration Reserve aFRR-)
Minute Reserve available within
15 minutes (positive)
mFRR15+ 15 minutes Minute reserve available within 15 minutes (manual
Frequency Restoration Reserve, mFRR5)
Minute Reserve available within
15 minutes (negative)
mFRR15- 15 minutes Minute reserve available within 15 minutes (manual
Frequency Restoration Reserve, mFRR5)
Regulation Reserve available
within 30 minutes (negative)
RZ30 30 minutes Serves for tertiary regulation; it consists of regulation
reserve for power reduction within 30 minutes
Regulation Reserve available in
over 30 minutes
RZN>30 Over 30 minutes Consists of dispatch reserve, regulation energy, and
regulation energy from abroad, all available in over
30 minutes EregZ>30+, EregZ>30-)
Note: a positive reserve means an increase in capacity, while a negative reserve means an increase in consumption.
Source: ČEPS, a. s., 2018, p. 117; modified by P. Brhlíková
Table 8.7 shows the maximum necessary balancing reserves recorded for 2019. If the installed capacity of
the Czech power system as of December 31, 2018 was at a level of 22,263.9 MW (see table No. 8.1) and total daily
regulation during the working days was at a level of 1,835 MW (night regulation 1,675 MW), the potential of the regulation
capacities would be 7.72% of installed capacity (excluding Frequency Containment Reserve). In the case
of the regulation of electricity from renewables (a total of 2,349 MW), then it is 67.48% of installed capacity. (For
more detail, see below).
Tab. 8.7: Maximum Regulation Reserves in the Czech Republic in 2019
aFRR mFRR
aFRR+ aFRR- mFRR5 mFRR15+ mFRR15Night
Day Night Day Night Day Night Day Night Day
Working days 335 365 335 365 505 505 280 330 220 270
Non-working days 330 345 330 345 505 505 275 315 215 255
Note: All data indicated in MW
Source: ČEPS, a. s., 2018, p. 118; Modified by P. Brhlíková
System services are predominantly provided by means of ancillary services contracted directly by ČEPS
via tenders, resulting in long-term contracts with eligible ancillary service providers at bilaterally agreed prices
(currently approximately 90% of FCR, aFRR and mFRR ancillary services is provided on this basis). The flexibility
of producers, i.e. their ability to change the output of the generating facility, can be also procured by ČEPS via
The Electric Power Industry156
the short-term market in the ancillary services it organises. Additionally, OTE and ČEPS organise a “balancing
market” in which necessary balancing electricity can be purchased by ČEPS as the only “customer” active on
this type of market. Balancing energy is offered at the marginal price given by the highest bid for the trading hour
in question. In 2018, 25.2 GWh of positive and 34.7 GWh of negative balancing energy was traded via the platform.
(see OTE, 2019)
With regard to the requisite swift activation time of reserve sources, pumped-storage hydroelectricity, gas
and combined cycle, and some steam power plants are key resources. ČEPS purchases roughly 30% of its ancillary
services from the ČEZ Group (for contracts for 2021, there has been a slight decrease to 20.41%). (see ČEPS,
2019) The cost of system services is paid by users of those services on the consumption side via tariff, i.e. by end
users. The price is regulated and is established by the decision of Energy Regulatory Office on a daily basis (see
ČEPS, 2019).
In likewise manner, ČEPS also covers the losses within the distribution system and, based on its own predictions,
purchases electricity to cover the losses at tenders for single products and on the special short-term electricity
market organized by OTE (see ČEPS, 2019).
8.4	 The Price of Electricity and the Trade in Electricity
The final price of electricity supplies on the liberalized retail market for eligible customers is composed of regulated
prices for activities that are of a natural monopolistic character, i.e. activities associated with the transmission
of electricity to a producer via transmission and distribution systems to an end user. This regulation is
performed by the Energy Regulatory Office, which on a regular basis issues a Price Decision. The provision of
a stable electric power system in technical and business terms has its own impact on the price. The second substantial
component of the final electricity price is the price of electrical energy itself, which is set by suppliers
(producers and traders) using single customer categories as a contractual matter. This portion of the price is not
regulated by the Energy Regulatory Office (see Energetický regulační úřad).
The final price of electricity supplies for all categories of end user is composed of five basic elements. The first
element of price is the unregulated price of the commodity, i.e. electrical energy, the price of which is set in line
with market principles and the trading strategies of single electricity suppliers. Other price elements encompass
regulated activities of a monopolistic character, among them the transmission of electricity from the production
facility via transmission and distribution systems to an end user, as well as activities tied to ensuring a stable
energy system in technical (the provision of system services) and business terms (mainly the activity of an electricity
market operator in the field of imbalance accounting). The final element of the final price of electricity supplies
is then a contribution to the promotion of electricity from renewables, the combined generation of electricity
and heat and secondary sources. In this manner, the price of electricity is set for all customer categories, in
effect from January 1, 2006, when Czech electricity was completely liberalized (see Energetický regulační úřad,
2009; Dufková, 2005, p. 2).
Tab. 8.8: Share of Main Components of the Price of Electricity Supplies to Households in 2019 (excluding VAT)
Electrical energy including a trading margin 45.58%
Market operator 0.80%
ČEPS system services 2.15%
Renewables and cogeneration 13.35%
Distribution and transmission 38.12%
Source: (Energetický regulační úřad, 2018b)
In terms of stock market standards, trading in electrical energy proves to be very specific. For physical laws,
the trade proceeds in real time and under the conditions of balanced supply and demand in the power system.
This means that the volume of demand in MWh must be equal to the volume of supply in MWh, otherwise the regulation
reserve to cover fluctuations in the power system enters into play.
Trade with electricity in the Czech Republic takes place via Power Exchange Central Europe, a. s., (PXE), initiated
in March 5, 2007, as the Prague Energy Exchange, while a daily market has been running since April 1st
,
The Electric Power Industry 157
2009, exclusively on the OTE platform. In terms of cross-border trading, OTE started trading with the Slovakian
Power System (SEPS) on the joint daily electricity market as part of the Market coupling CZ-SK framework on
September 1, 2009 (see OTE, 2010b, p. 12). Day ahead market coupling was organized by OTE and OKTE as the respective
market organizers by means of an algorithm (market-coupling algorithm) that was part of their business
system. On the TSO side, it was supported by ČEPS and SEPS. In order to extend functioning market coupling
in the region, national regulatory authorities, regulators, market operators, and the transmission system operators
of the Czech Republic, Slovakia and Hungary signed a Memorandum of Understanding on 30 May, 2011.
Subsequently, operation of the CZ-SK-HU MC Project (3MMC), an ATC based day-ahead implicit allocation, was
launched on 11 September 2012. Further extension followed in 2014 Romania joined the market-coupling project
with evolved design using European algorithm (PCR). Operation of the market coupling solution on four bidding
zone borders has been launched successfully on 19 November 2014 for the first delivery day of 20 November
2014. (see HUPX, 2017) Today, 4MMC, together with MRC (Multi-regional coupling), forms the basis for the single
day-ahead coupling which allows full integration of day-ahead markets in Europe, using a single allocation solution
in line with the electricity market target model defined under European legislation.
Trading on the PXE platform was launched on July 17, 2008. On 1 July, 2009, the platform changed its name to
PXE and was transformed into a joint stock company. The PXE Exchange facilitates the trade in electric power
(also gas) and operates internationally–the platform offers products on the Czech, Slovak, Hungarian, Romanian,
and Polish12
markets, while being a subsidiary company of the Prague Stock Exchange. PXE was also a part of
the CEE Stock Exchange Group, which brings together four Central European stock exchange markets: the Vienna
Stock Exchange (Wiener Börse), Budapest Stock Exchange (Budapesti Értéktőzsde), Ljubljana Stock Exchange
(Ljubljanska borza) and the Prague Stock Exchange. Since 2016, PXE has been part of the EEX Group and its
offered power derivates are operated via the EEX Trading system. Today, EEX connects more than 500 trading
participants worldwide. Therefore, “EEX trading participants are able to trade Czech, Hungarian, Slovakian,
Romanian, and Polish power futures alongside contracts for 11 power markets in Central Western Europe”. (see
Power Exchange Central Europe, 2019)
Trading within the PXE framework and under EEX licence (covering domestic as well as international trading)
may be performed only by actors that meet the requirements (concluding the exchange in line with applicable legal
regulations, i.e. becoming an EEX member. (see Power Exchange Central Europe, 2017; Power Exchange Central
Europe, 2019) Other prerequisites are Non-Clearing Membership in the clearing house European Commodity
Clearing AG (ECC) and a clearing agreement with an ECC Clearing Member (a bank). Then the entity must possess
a license for electricity trading (for foreign actors issued by their home institutions)13
, be a subject of clearance
with its own market operator,14
and close an agreement with a clearing bank.15
Trading participants are, moreover,
obliged to purchase electricity only for resale purposes and not be the end user. (Power Exchange Central
Europe, 2017) Even though the participants’ names are publicly disclosed, the trading itself proceeds anonymously.
Trading is regulated, the currency is EUR, and closed trades are guaranteed and cannot be cancelled.
Physical settlement is based on “the obligation of both parties to the trade to deliver/pay for a certain volume
of MWh in a given future delivery period and for an agreed price.” Financial settlement is based on “the obligation
of both parties to the trade to provide future financial settlement of the price differences regarding the subject
of the trade, during the delivery period” (see Burza cenných papírů Praha, a. s. , 2011, p. 35)
Depending upon the length of the period of delivery of the agreed volume of electricity, individual contract
trades at the PXE are daily, weekly, monthly, quarterly or annual. Furthermore, contracts are divided into two basic
groups according to whether the electricity is to be supplied at all hours of all days during the distribution
period (the base load) or only Monday through Friday between 8 AM and 8 PM (peak load), where state holidays
and days off are considered work days.16
Finally, contracts are divided into futures or long-term (i.e. annual,
12	 Products on the Polish and Romanian markets were first introduced in 2014). (see Power Exchange Central Europe, 2019)
13	 The Energy Regulatory Office (ERÚ) for the Czech Republic, the Regulatory Office for Network Industries (URSO) for the Slovak Republic,
and the Hungarian Energy and Public Utility Regulatory Authority (MEKH) for Hungary.
14	 OTE, a. s. for the Czech Republic, OKTE in Slovakia, HUPX in Hungary and OPCOM in Romania.
15	 A bank which is in line with the PXE Rules of Clearing responsible for unconditional fulfillment of an obligation resulting from the clearing
of an exchange trade performed by a trade participant has a closed agreement with the bank on exchange trade clearing, among
others including the bank’s obligation to cover trading and clearing fees. (see Power Exchange Central Europe, 2017)
16	 OTE, a. s., moreover, offers an off-peak load, which is supply during working days from midnight to 8 AM and from 8 PM to midnight.
The Electric Power Industry158
quarterly, and monthly base loads and peak loads) or spot market commodities traded for immediate delivery
(i.e. day‑ahead and intraday peak loads and base loads).
The result is the nine basic products that are the subject of PXE trade. Electrical energy is then supplied at
the constant value of an hourly output of 1 MW at all hours of all days during the agreed period of delivery or consumption.
For cross-border trading, the transmission of electricity is not included in the contract price. Trading is
therefore classified as an explicit auction (see Power Exchange Central Europe, 2019; Horová, 2009). Electricity
trading on the PXE Exchange is also limited in terms of order volume (see table 8.9) and the volume of contracts
traded (fixed at the level of 1 MW).
Tab. 8.9: Minimum and Maximum Volume Orders at PXE Exchange
Type of contract A Minimum Order Volume A Maximum Order Volume
Daily (D, peak and base) 1 MW 50 MW
Monthly (M, peak and base) 10 MW 25 MW
Quarterly (Q, peak and base) 5 MW 25 MW
Yearly (CAL, peak and base) 5 MW 15 MW
Source: Power Exchange Central Europe, a. s. Modified by T. Vlček.
Once the trade has been closed, it is followed by settlement, executed by the designated clearing house,
i.e. European Commodity Clearing (ECC AG). The participant’s clearing bank is in charge of his or her financial
liability, thereby ensuring financial clearance. In terms of the physical transmission of electricity traded, OTE is
responsible for the commodity, receiving information about trading events at the PXE a day ahead. It also performs
the imbalance settlement process (see Horová, 2009; Power Exchange Central Europe, 2019).
In parallel, short-term trading in the Czech Republic is organised via OTE, whether as cross-border day-ahead
market coupling or domestic intraday trading. It is important to mention that the day-ahead spot price is currently
generated using a single algorithm within Europe, PCR EUPHEMIA, which allows for marginal and non-discriminatory
price formation in line with the EU electricity market target model. This algorithm is operated by
the Nominated Electricity Market Operators (NEMO) as defined by the EU legislation and provides benchmark
prices in most bidding areas in Europe. OTE is one the owners of the algorithm, together with seven other NEMOs
in the EU. (see Asociace energetických manažerů, 2016) The parameters of short-terms organised by OTE are
summarised in table 8.10.
Tab. 8.10: Parameters of short-term markets
Type of market Block market17
Day-ahead market Intraday-market
Traded period 12/24 h 1 hour 1 hour
Minimum volume 1 MW × 12/24 h 1 MWh 1 MWh
Maximum volume 50 MW × 12/24 h 99,999 MWh 99,999 MWh
Currency CZK EUR EUR
Market opens at 9:30 D-5 unlimited 15:00 D-1
Market closes at 13:30 D-1 11:00 D-1 H-1:00
Note: The abbreviation D-5 refers to the time window five days prior the physical delivery of electricity. The same logic then applies to
D-1, where the activity in question is performed one day prior the delivery date. H-1 then refers to the intraday time period and indicates
that the activity is performed 60 minutes before the physical delivery of electricity.
Source: OTE, 2019c; modified by P. Brhlíková
17	 According to OTE (2019), the block market is based on the priciple of the continual trading of fixed electricity blocks on specific trading
days. On the block market, base type blocks (0:00−24:00), Peak type (8:00−20:00) and Off‑peak type (0:00−8:00; 20:00−24:00) are traded.
(see OTE, 2019c)
The Electric Power Industry 159
8.5	 Stability and Development of the Transmission System–Crisis or
a Revolutionary Change in the Electric Power Industry?
Even though a number of current topics in the Czech electric power system have already been addressed in other
parts of the text, the phenomenon of the stability and development of the transmission system deserves its
own section. The stability of the transmission and, hence, of the distribution system is simply the key factor in
the electricity sector, both in terms of a balanced level of production and consumption, as well as from the purely
technical standpoint. Electricity lines and other parts of the power system need to be kept in good condition,
which is impossible to achieve without investing in repair, maintenance and development services. The stability
of the transmission network is presently affected by several events, among them the integration of electricity
from renewables into the grid and the problem of sudden fluctuations due to volatile electricity production from
wind power plants in northern Germany, which flows through the Czech transmission grid. ČEPS, as the holder
of an exclusive license to operate the transmission system, is bound by law to maintain and develop the transmission
system.
ČEPS is obliged to publicly release the expected development of the transmission system. However, as a result
of the demanding allocation of investment in infrastructure, transmission system operators create development
plans that span to 10 or 15 years (see Vnouček, 2010, p. 30). Moreover, Regulation 714/2009 provides a clear
mandate to ENTSO-E to create a ten-year network development plan on a biennial basis. Network development
plans have their basis in national network development plans and must identify potential investment issues, for
example with regard to cross-border capacity increases. These development plans must include “the modelling
of the integrated network, scenario development, a European generation adequacy outlook and an assessment
of the resilience of the system”. (see European Parliament, 2009)
Based on defined grid development plans, ČEPS is responsible for constructing and maintaining new lines.
However, the need to react to changes on the production side, especially with respect to reacting to the development
of renewable sources, may be hindered by complex permit procedures for line constructions, which in
the Czech Republic last between seven and 10.5 years (see table 8.11). The National Renewable Energy Action
Plan of the Czech Republic has set the goal that the Czech Republic will have a power system with 743 MWe of
installed capacity by 2020 in public power plants and 1,695 MWe in photovoltaic power plants (see Ministerstvo
průmyslu a obchodu, 2010, p. 69) By 1 January, 2011, however, there were already 217.8 MWe installed in wind power
plants and 1,959.1 MWe in photovoltaic plants. In 2017, the share of renewables in final electricity consumption
in Czech Republic was 14% according to Eurostat (the share of RES in total energy consumption was 14.8%) while
the installed capacity of solar power plants stood at 2,048.9 MWe at the close of 2018. (see MPO, 2018)
Tab. 8.11: Example: the Construction Process of an Extra High Voltage Line
Activity Duration
Feasibility studies, route location and spatial issues 6–12 months
EIA “Environmental Impact Assessment” Study and public discussions 12–18 months
Depiction of the routes on the cadastral map (of a local plan), preliminary agreement with the property
owner, preliminary construction project, request and provision of access to the local plans
12 months
Public discussion and addressing objections 6 – 12 months
Agreements with property owners 6 months
Construction Implementation Project 6 months
Designing and construction procedures 12 – 18 months
Purchase of properties 3 – 6 months
Call for tenders, selection of a contractor, including the resolution of other applicants’ objections 6 – 12 months
The construction itself 12 – 24 months
Total duration 81 – 126 months
(approximately 7 – 10.5 years)
Source: Vnouček, 2010, p. 33.
The regulation of the unstable, volatile and hard-to-predict production of these power plants will cost the Czech
Republic almost CZK 50 billion delivered to ČEPS for its ancillary services.
The Electric Power Industry160
The technical limit of electricity regulation potential in the Czech Republic, after totalling positive and negative
regulation capacity, is 1,585 MWe during daytime regulation and 1,395 MWe during nighttime regulation.
According to a study by EGU Brno, a. s., the technical limit will reach 2,000 MWe in 2013–2015. Meantime, distribution
company records reveal that the summed potential capacity (based on connection approvals issued) as
of January 31, 2010 was 8,063 MWe from renewables (5,277 MWe from photovoltaic plants and 2,786 MWe from
wind plants) (see Jabůrková, 2010, pp. 320–321).
Currently, the Czech Republic has peak and semi-peak electricity regulation plants. Peak power plants include
the Orlík wind power plant, the Dlouhé stráně pumped-storage hydroelectricity, hydropower plants with more
than 1 MWe and the Vřesová combined cycle power plant. Semi-peak power plants include the Mělník, Prunéřov I,
Tisová, Chvaletice, Dětmarovice, and Hodonín power plants (see Růžička, 2009). These sorts of power plants
are selected for their capability to quickly change capacity and connect to the grid, as previously described (see
comparison in table 8.12).
Tab. 8.12: Comparison of Different Types of Power Plant
Type of Power Plant Price of
Electricity
Capacity Speed of Connection to
the Network
Share of Fuel
Costs
Provision of Raw
Material Supplies
Nuclear Very low Constant, a low degree
of regulation capacity
Hours up to days 20–25% of
total costs
20 tonnes of fuel per year
for 1,000 MW of capacity
Hydroelectricity (pumpedstorage
hydroelectricity,
hydropower plants)
Low Constant capacity,
dependent on the flow,
can be well regulated
Tens of seconds 0% Without problem
Brown coal, Bituminous coal Similar to nuclear
power plants
Constant capacity,
a medium degree of
regulation capacity
Tens of minutes 50–66% Storage problems,
requires its own source in
the vicinity, consumption
ranges around a train of
coal per day
Gas (combined cycle, gas
and fuel power plant)
High Constant capacity, can
be well regulated
A matter of minutes 66–75% Demands its own source
or a pipeline
Wind Potentially low Varying capacity, cannot
be regulated, completely
dependent on regulation
capacity
Unstable, unreliable and
hard to anticipate, under
windy conditions, tens of
seconds.
0% Without problem
Photovoltaic (Solar
power plant)
Potentially low Varying capacity, cannot
be regulated, completely
dependent on
accumulation capacity
Unstable, unreliable and
hard to anticipate. Should
the sun shine (therefore,
during daytime), tens of
seconds.
0% Without problem
Source: Škoda, 2010; For capacity figures, see Štěrba, 2006. Modified by T. Vlček, reprinted with the approval of R. Škoda.
With regard to the planned increase in photovoltaic and wind power plants, we may thus assume that coming
years will see greater production of electricity from wind and photovoltaic facilities than enabled by the current
technical regulation limit, without jeopardizing the stability of the power system. Generally, for example, there
is a need to boost ancillary services by around 20% of total capacity installed in wind power plants (see Belyuš,
2009, p. 582). Based on the findings of the national generation adequacy outlook from 2017, ČEPS indicates that
based on modelled scenarios the availability of ancillary services may decrease in the future. (see ČEPS, 2017)
Over the long-term, the main reason for such development is the slow phase-out of coal fired power plants and
a reduction in installed capacity of nuclear sources in the future. From the operational security perspective,
the transmission system operator must prepare for such a scenario. Therefore, ČEPS investments focus on increasing
the capacity of substations, reinforcing existing transmission lines, and constructing new lines, as well
as on innovations in digitalisation, decentralisation and accumulation. (see Budín, 2019)
The present (European and thus Czech) trend is rather clear. It takes the direction of the developing renewable
energy sources, striving to obtain greater energy efficiency and energy savings, and taking initial steps towards
shifting to a decentralized energy sector. The so-called “Clean Energy Package”, which recasts the Third Energy
Package of 2009, sets an ambitious European goal of 32% renewable energy sources by 2030. (see European
Commission, 2018) But from an operational point of view, integrating intermittent sources and shifting from conventional
base load generation can lead to a lack of flexible sources for balancing purposes and stability of supply.
The Electric Power Industry 161
Another issue is the profitability of these conventional generation units. Decarbonisation and the introduction of
support schemes for RES have distorted the market, as traditionally competitive sources experience an inability
to compete with supported intermittent generation. The main reason is that marginal production costs are very
low or absent in the case of renewables and support schemes implemented to steer the deployment of new renewable
technologies. (see ČEZ, 2019a) There is no investor that would be interested in building large new classic
sources (with the exception of Ledvice), because the return on investment is far from certain. With respect to
where development is directed and to gradual termination of existing large coal blocks, the Czech electric power
industry in upcoming years may expect either a state of crisis associated with a drop in electricity production
from coal and electricity regulation (from renewables, from the development of electric vehicles and necessary
infrastructure, etc.) in the grid, or a revolutionary change. The latter would rest on the ability to manage the increasing
electricity consumption in the Czech Republic (see table 8.13) in shifting to a new order in the electric
power industry. More recently, OTE reported that long-term, net consumption might increase by 25%–33% by
2050 compared to 2018. Taken together, this would mean 78–83 TWh of electricity consumed (incl. electric mobility)
depending on the scenario. (see OTE, 2019b)
Tab. 8.13: Forecast of the Future Course of Electricity Consumption in the Czech Republic (GWh)
2010 2011 2012 2013 2014 2015 2020 2030 2040
High Energy Users 35,547 36,059 36,566 37,177 37,963 38,788 42,461 45,752 47,249
Low Energy Users 23,319 23,649 24,144 24,636 25,018 25,393 27,131 29,245 30,593
Household Low Energy Users 8,375 8,525 8,840 9,165 9,377 9,597 10,571 11,543 12,027
Business Low Energy Users 14,944 15,124 15,304 15,472 15,640 15,796 16,560 17,702 18,566
Net 58,866 59,708 60,710 61,813 62,981 64,182 69,592 74,997 77,842
Loses 4,666 4,729 4,806 4,890 4,979 5,070 5,477 5,854 6,028
– in the transmission system 747 758 770 783 796 810 872 927 949
– in the distribution system 3,919 3,972 4,035 4,107 4,182 4,260 4,605 4,928 5,079
Net incl. loses 63,531 64 437 65,516 66,703 67,960 69,252 75,069 80,851 83,870
Source: OTE, a. s., 2011, p. 10.
Capacity shortages, a low level of investment on the side of conventional generation and growing consumption
may lead to generation adequacy concerns.
The electricity grid will be under enormous pressure. In 10 to 15 years, ČEPS expects the emergence of a qualitatively
new energy sector, which will include, among other things, “a change in primary sources’ capacity structure
and a partial shift of production capacity to the level of distribution networks,18
developed mechanisms of
use control through smart systems and their interconnection with the market, the integration of national network
control into supranational aggregates, and the interconnection of the market with electricity, services, and regulation
energy” (see Kovačovská, 2011, pp. 26–27). The Czech electricity grid was not built for such major unanticipated
electricity transmission changes in which users become electricity suppliers, while their modernization
in terms of modern smart grids will require sky-high investments.
The Czech Republic is the second largest electricity exporter in Europe, behind France. If it wishes to maintain
this position, it will be necessary to replace aging nuclear power plants and increase the installed capacity
of nuclear. This requires an even higher investment, but it will increase the safety of electricity supplies in a similarly
steep fashion. This situation in the nuclear power industry is very aptly summarised by Petr Otčenášek, who
says: “The expected nuclear renaissance stopped at the instant the combustion of oil, natural gas, and coal faced
problems related to their exhaustion in the 21st
century, and with potential negative impacts on the biosphere”
(see Otčenášek, 2011, p. 271).
Table 8.14 displays the problems, risks and advantages inherent in the potential construction of a new large power
plant. Although decentralization and renewables are part of the modern trend, with strong support from the EU,
the Czech Republic is not at this point prepared to undergo a massive shift to this sort of electricity production.
18	 Based on the “Renewable Scenario” OTE predicts production at the distribution level will achieve 19 TWh by 2050
The Electric Power Industry162
Tab. 8.14: The Potential Construction of New Electricity Sources
Source Effect
Brown coal Increasing pressure to breach the environmental territorial limits of mining; absolute surrender on reduction of greenhouse
gas emissions.
Bituminous coal Uncertain supply (in comparison to brown coal, reserves of Czech bituminous coal have an even lower lifespan). Should
imports of coal prove necessary (Poland, Ukraine), the environmental dimension would be totally lost to the project
due to the overwhelming environmental effects of transporting an enormous amount of materials, and there would
be no attempt to greenhouse gas emissions.
Gas Given that the Czech Republic has no relevant source of natural gas and given that the only real supplier, Russia, levers
a dependence on raw material imports for its political interests, such a decision would signify giving up on the energy
security of the Czech Republic.
Nuclear Although demanding both technically and time-wise, this is the solution that would enhance Czech energy security.
Source: Kavina, 2009, p. 326
The investment necessary to modernize and maintain the stability of the transmission system would be astronomical.
A more realistic development would be one in which electricity (and heat) is produced from renewables
within households (photovoltaic power plants, solar thermal exchangers, biomass boilers, biogas stations,
waste-to-energy processing, hydropower plants, etc.) in order to reduce consumption from the central power
system. This direction has already been set and, despite significant problems (see the chapter on renewables), it
is likely that the energy sector will continue on this course. But even in the distant future, it will be impossible to
entirely resign from having a centralized network, as renewables and smaller co-generation units will never be
able to provide the massive amounts of electricity required by blast furnaces, ironworks, and other large undertakings
that place high demands as electricity consumers.
Of course, with large scale deployment of renewable sources, some level of market distortion is apparent. Low
competitiveness and an absence of conventional flexible sources can cause major problems with regard to the balancing
of the grid. The new regulatory package (Clean Energy Package) places obligations on the transmission
system operator to identify and tackle concerns over generation adequacy, and sets a common framework. If all
these solutions together with improved market environment and the removal of any distorting elements are still
not effective in addressing generation adequacy issues, the EU Member State may implement the so-called capacity
mechanism. The aim of capacity mechanisms is to incentivise the construction of new sources as well as
to provide direct financial support for existing generation capacity which is not competitive on the market, thereby
ensuring supply will be able to meet demand. There are several schemes already in place across Europe. (see
Huhta, 2018) But the Czech Republic has not introduced any capacity mechanisms yet. Considering all the challenges
and a persistent push for a cleaner electricity sector more based in renewables and implemented capacity
support schemes in neighbouring countries, capacity mechanisms may be an inevitable solution for addressing
these generation adequacy concerns and ensuring competitiveness among domestic sources.
The entire regulation issue is, moreover, impacted by so-called cross-border loop flows of electricity from
Germany. The Czech Republic is currently connected to neighbouring grids via six 220 kV and eleven 440 kV
cross-border lines. Unplanned flows resulting from the volatile production of wind farms in northern Germany
enter the Czech Republic via the V445 and V446 lines from Röhrsdorf. (see ČEPS, 2017b)
The installed capacity of German wind power plants located to the north in 2009 amounted to approximately
23,000 MWe; by 2030, this should increase by another 30,000 MWe (see Belyuš, 2009, p. 582), a truly massive
capacity of up to 53 thousand MWe (for comparison, the total installed capacity of the Czech Republic as
of December 31, 2012 was 20,520 MWe). In reality, the total installed capacity of wind power plants in Germany
(both onshore and offshore) was already equal to 55,718.6 MW by 2017. (see Bundesnetzagentur, 2017)
“This problem is far from being the Czech Republic’s concern only. The production of wind power plants in northern
Germany overloads the lines of system operators in Poland, Slovakia, the Czech Republic, the Netherlands,
Belgium, and Switzerland. In the Czech Republic’s case, this amounts to 1,500 to 1,700 MWe of unexpected flows.
The main reason is the problem of transmitting the electricity produced from northern Germany to users in
the central and southern parts of Germany” (see Cieslar, 2010; Cieslar, 2010c). Germany lacks 3,600 km of electricity
lines (see Neuerer, 2011). A surplus of German electricity from wind, which for technical and infrastructural
reasons cannot be supplied to German users, is usually purchased by Austrian and Swiss pumped-storage hydropower
plants, which thereby obtain less expensive electricity for pumping water during the day. In addition
The Electric Power Industry 163
to significant expenses associated with power system regulation in the event of a flow of wind electricity from
Germany, ČEPS over the long haul (approximately after 2015) plans to modernize and increase the capacity of
400 kV lines, which are the most loaded routes during transfers from Germany to Austria, while these investments
would require more than CZK 3.8 billion. The present model of financial regulation of transmission system
operators in the EU is solved separately, i.e. “there is no possibility of financial compensation for investment stimulated
by external conditions and any compensation of flows from Germany is, therefore, paid for by the Czech
user” (see Belyuš, 2009, p. 582).
In response to this issue, ČEPS installed four phase-shifting transformers between 2015 and 2017. The transformers
are installed on each side of the 440 kV interconnectors with Germany. These PST transformers are
operated in a coordinated manner by German and Czech transmission operators and play a crucial role in regulating
loop flows from Germany, thereby maintaining secure operation of the power system within the broader
region. The total investment amounts to CZK 1,588 billion. (see ČEPS, 2017a)
Another way to tackle the issue of unscheduled flows in the region is to revise the configuration of bidding
zones. The Czech Republic has articulated the urgent need to split the former bidding zone consisting of Germany
and Austria. (see Budín, 2019) In practice, it has meant that there was no limit set for cross-border trading between
Germany and Austria. Hence, based on a regulatory decision, this large bidding zone was divided on October 1st
,
2018. (see TenneT Holding B.V., 2018) Moreover, based on the EU electricity market target model, transmission
system operators from Central and Western Europe are obliged to cooperate in order to establish the cross-border
capacity calculation method based on coordination which allows for more accurate capacity allocation and
operational planning throughout the region. (see ČEPS, 2018)
In 2006, the Expert Energy Security Working Group under the Committee for Foreign Security Policy
Coordination prepared a report for the National Security Committee in which it noted that “despite the liberalization
of the electricity market, the market is dominated by a very strong company, which causes a low level of
competition” (see Odborná pracovní skupina pro energetickou bezpečnost Výboru pro koordinaci zahraniční
bezpečnostní politiky, 2006, pp. 8–9). The working group was correct in both cases, but these claims may be assessed
anew with respect to the events of the last five years.
This demonstrates that even though the dominant position of ČEZ remains untouched, its position is increasingly
being disrupted as the result of non-state market regulation. The character of the Czech electric power sector
is very strongly affected by the sector’s historical development, given that it was originally built for purposes
of centralized production and transmission. The requirements current sector development imposes on the electric
industry are, therefore, limited predominantly in technical terms (in addition to the evident rigid attitude of
the national electricity elite, especially in relation to renewables and decentralization). It is entirely evident that
ČEZ has no intention of losing its dominant position, responding to the developing situation in its own manner
by, for example, initiating producing electricity from renewables or by fighting newcomers to the marketplace.
If we do not set a clear long-term direction for the Czech power industry (under a State Concept) soon,
the country will experience either a great electric power industry crisis resulting from hesitancy and inconsistency,
or a major, financially enormously demanding change in the electric power industry, should renewables
remain supported at current levels in coming years.
8.6	 Sources
Asociace energetických manažerů. (2016). Úvod do liberalizované energetiky. Praha: ISBN 978-80-260-9212-4.
Belyuš, M. (2009). Rozvoj obnovitelných zdrojů by měl odpovídat rozvoji sítí. Vesmír, 88(9), pp. 582-583.
Budín, J. (2019, April 23). Šéf ČEPS Durčák: ČR by měla mít možnost být účastna nejen nastavování nových
pravidel, ale i řídicího procesu. Retrieved from OEnergetice.cz: https://​oenergetice​.cz​/rozhovory​/sef​-ČEPS​
-durcak​-cr​-by​-mela​-byt​-ucastna​-nejen​-nastavovani​-novych​-pravidel​-i-ridiciho​-procesu/
Bundesnetzagentur. (2017). Figures, data and information concerning the EEG (Erneuerbare-Energien-Gesetz).
Retrieved from https://​www​.bundesnetzagentur​.de​/DE​/Sachgebiete​/ElektrizitaetundGas​/Unternehmen​
_Institutionen​/ErneuerbareEnergien​/ZahlenDatenInformationen​/zahlenunddaten​-node​.html​;​jsessionid​=​
3DD9F4A26D54A1E8BDFC766F20DF37E1
Burza cenných papírů Praha, a. s. . (2011). Retrieved from Ročenka 2010 / Fact Book 2010 - Power Exchange
Central Europe: http://​www​.pxe​.cz​/pxe​_downloads​/Statistics​/Year​/fb2010​.pdf
The Electric Power Industry164
Cieslar, S. (2010, April 9). All for Power. Retrieved from „Problém s integrací obnovitelných zdrojů mají i jinde.
Snižují se dotace, sluneční a větrné elektrárny se vypojují ze sítě“ uvedl v rozhovoru pro časopis All for
Power Ing. Petr Zeman, předseda představenstva a generální ředitel ČEPS, a. s.: http://​www​.allforpower​
.cz​/clanek​/problem​-s-integraci​-obnovitelnych​-zdroju​-maji​-i-jinde​-snizuji​-se​-dotace​-slunecni​-a-vetrne​
-elektrarny​-se​-vypojuji​-ze​-site/
ČEPS. (2010). Retrieved from Výroční zpráva 2009: http://​www​.ČEPS​.cz​/doc​/soubory​/20100514​/ČEPS​_Vyrocni​
_zprava​_%202009​.pdf
ČEPS. (2017, August 30). Assessment of generation adequacy of the CR electricity system until 2030. Retrieved
from ČEPS, a.s.: https://​www​.ČEPS​.cz​/en​/generation​-adequacy
ČEPS. (2017a, September 22). Regulační transformátory jsou v provozu, chrání proti přetížení sítě. Retrieved from
https://​www​.ČEPS​.cz​/cs​/aktuality​/novinka​/regulacni​-transformatory​-jsou​-v-provozu​-chrani​-proti​-pretizeni​-site
ČEPS. (2017b). Údaje o PS. Retrieved from https://​www​.ČEPS​.cz​/cs​/udaje​-o-ps
ČEPS. (2018a). Výroční zpráva ČEPS 2017. Retrieved from https://​www​.ČEPS​.cz​/cs​/vyrocni​-zpravy
ČEPS. (2018b). Kodex PS. Retrieved from https://​www​.ČEPS​.cz​/cs​/kodex​-ps
Černoch, F., Vlček, T., & Zapletalová , V. (2010). Energetická politika ČR v rozhodování politických stran:
agregace a artikulace zájmů z hlediska jejich intenzity a konzistence. SEPS – Středoevropské politické
studie, 12(4), pp. 255-284.
ČEZ. (2019a). Generation adequacy, capacity mechanisms and internal market in electricity. Retrieved from
https://​www​.cez​.cz​/en​/cez​-group​/cez​-group​/public​-affairs​/strategy​-and​-energy​-policy​/generation​
-adequacy​-capacity​-mechanisms​-and​-internal​-market​-in​-elektricity​.html
ČEZ. (2019b). Struktura akcionářů. Retrieved from https://​www​.cez​.cz​/cs​/o-spolecnosti​/cez​/struktura​
-akcionaru​.html
Directive 2003/54/EC. (2003). Directive 2003/54/EC of the European Parliament and of the Council of
26 June 2003 concerning common rules for the internal market in electricity and repealing Directive
96/92/EC. (2003, July 15). Retrieved from https://​eur​-lex​.europa​.eu​/legal​-content​/EN​/TXT/?uri​=​CELEX​
%3A32003L0054
Dufková, M. (2005). Z čeho se skládá cena elektřiny? Třetí pól, 2005(12), p. 2.
Elektroenergetika I. (n.d.). Retrieved from http://​www​.vpicha​.cz​/sites​/default​/files​/Elektroenergetika​%20I​.pdf
Energetický regulační úřad. (2009). Retrieved from Závěrečná zpráva ERÚ o metodice regulace III. regulačního
období: http://​www​.eru​.cz​/user​_data​/files​/prezentace​_III​_RO​/Zaverecna​_zprava​_o_metodice​_%20III​_RO
Energetický regulační úřad. (2011). Působnost ERÚ v čase. Retrieved from http://​www​.eru​.cz​/dias​-read​_article​
.php​?articleId=12
Energetický regulační úřad. (2017). Pozor, pokud jste u dodavatele poslední instance! Retrieved from https://​
www​.eru​.cz/-/pozor​-pokud​-jste​-u-dodavatele​-posledni​-instanc​-1
Energetický regulační úřad. (2018a). Retrieved from Čtvrtletní zpráva o provozu ES ČR: http://​www​.eru​.cz​
/documents​/10540​/4580207​/Ctvrtletni​_zprava​_2018​_IV​_Q.pdf​/f47bc2a0​-05e3​-4402​-a1db​-5b6e2b0a44a4
Energetický regulační úřad. (2018b, November 27). Retrieved from ERÚ zveřejnil regulované ceny
v elektroenergetice a plynárenství pro rok 2019: https://​www​.eru​.cz/-/regulovane​_ceny​_2019
ENTSO-E. (2019). Retrieved from About ENTSO-E: Objectives: https://​www​.entsoe​.eu​/about/
European Commission . (2018, November 13). Commission welcomes European Parliament adoption of key
files of the Clean Energy for All Europeans package (Press Release). Retrieved from http://​europa​.eu​/rapid​
/press​-release​_IP​-18​-6383​_en​.htm
European Parliament. (2009). Regulation (EC) No 714/2009 of the European Parliament and of the Council of 13
July 2009 on conditions for access to the network for cross-border exchanges in electricity and repealing
Regulation (EC) No 1228/2003.
Horová, J. (2009). Elektrická energie - obchodování na burze. Prezentace PXE, a. s., Burza cenných papírů
Praha, a. s., Praha.
Huhta, K. (2018, May). Capacity mechanisms in EU Law: A comment on the free movement of goods. Retrieved
from Oxford Energy Institute for Energy Studies: https://​www​.oxfordenergy​.org​/wpcms​/wp​-content​/uploads​
/2018​/05​/Capacity​-mechanisms​-in​-EU​-Law​-A-comment​-on​-the​-free​-movement​-of​-goods​-Comment​.pdf
HUPX. (2017). 4M Market Coupling: Extended High Level Market Design. Retrieved from https://​hupx​.hu​
/uploads​/Piac​%C3​%B6sszekapcsol​%C3​%A1s​/DAM​/4M​%20MC​%20HLMD​%20​_%2017012017​.pdf
The Electric Power Industry 165
Chemišinec , I., Marvan , M., Nečesaný , J., Sýkora , T., & Tůma, J. (2010). Obchod s elektřinou. Praha: CONTE
spol. s r.o.
Jabůrková, J. (2010). Obnovitelná elektřina není černý pasažér. Vesmír, 89(5), pp. 320-321.
Kavina, P. (2009). Surovinové zdroje. In M. &. Potůček, Česká republika – trendy, ohrožení, příležitosti (pp. pp.
307-330). Praha: Karolinum.
Kovačovská, L. (2011). Dlouhodobá strategie přenosové soustavy. Energetika - Průvodce světem energií a jejich
úspor, 2011(5), pp. 26-27.
Kubín, M. (2009). Proměny české energetiky. Praha: Český svaz zaměstnavatelů v energetice.
Ministerstvo průmyslu a obchodu. (2010). Národní zpráva České republiky o elektroenergetice a plynárenství
za rok 2009. Retrieved from http://​download​.mpo​.cz​/get​/35250​/46994​/562257​/priloha001​.doc
MPO. (2018, December 5). Podíl obnovitelných zdrojů energie na hrubé konečné spotřebě energie 2010–2017.
Retrieved from MPO: https://​www​.mpo​.cz​/cz​/energetika​/statistika​/obnovitelne​-zdroje​-energie​/podil​
-obnovitelnych​-zdroju​-energie​-na​-hrube​-konecne​-spotrebe​-energie​-2010​-2017​--241963/
Müller, J. (2002). Operátor trhu s elektřinou, a. s. Česká energetika, 2002(1), 53-55.
Neuerer, D. (2011, April 16). Handelsblatt . Retrieved from „Deutschland muss Energie-Trendsetter werden“:
http://​www​.handelsblatt​.com​/politik​/deutschland​/deutschland​-muss​-energie​-trendsetter​-werden​/4067412​.html
Odborná pracovní skupina pro energetickou bezpečnost Výboru pro koordinaci zahraniční bezpečnostní
politiky. (2006, January 1). Zajištění energetické bezpečnosti ČR, stav a riziko realizace hrozeb. Materiál pro
Bezpečnostní radu státu.
Otázky Václava Moravce. (2009, November 8). Retrieved from ČT24: http://​www​.ceskatelevize​.cz​/ct24/
Otčenášek, P. (2011). Fukušima Daiichi po nadprojektové havárii (odhad). Energetika, 61 (5), pp. 271-272.
OTE. (2010a). Technická zpráva 2009. Retrieved from http://​www​.ote​-cr​.cz/
OTE. (2010b). Výroční zpráva 2010. Retrieved from http://​www​.ote​-cr​.cz/
OTE. (2019a). Měsíční zpráva elektřina. Retrieved from https://​www​.ote​-cr​.cz​/cs​/statistika​/mesicni​-zprava​
-elektrina​/zmeny​-dodavatele​?date​=​2019​-01​-01
OTE. (2019b). Expected electricity and gas balance report. Retrieved from https://​www​.ote​-cr​.cz​/cs​
/o-spolecnosti​/soubory​-vyrocni​-zprava​-ote​/zoor​_2018​.pdf
OTE. (2019c). Electricity Market - Organised short-term market. Retrieved from https://​www​.ote​-cr​.cz​/en​/short​
-term​-markets​/electricity​/files​-informace​-vdt​-vt​/electricity​_markets​.pdf
Píha, M. (1994). K otázce dezintegrace elektrizační soustavy a vnitřního trhu s elektřinou. Energetika, 1994(3),
pp. 69-70.
Power Exchange Central Europe. (2017). Burzovní pravidla: Pravidla obchodování. Retrieved from
https://​www​.pxe​.cz​/pxe​_downloads​/Rules​_Regulation​/Cz​/PXE​_pravidla​_obchodovani​.pdf
Power Exchange Central Europe. (2019). About PXE. Retrieved from https://​www​.pxe​.cz​/dokument​.aspx​?k=​Co​
-Je​-PXE​&​language​=​english
Růžička, V. (2009, December 17). Přednáška na FEL ZČU Plzeň. Retrieved from (Ne)jaderné elektrárny
v elektrizační síti a jejich provoz: http://​vyuka​.fel​.zcu​.cz​/kee​/JE​-nuclear​/JADRne​_ELEKTRRNY​-ruzicka​.pdf
Šolc, P. (2008). Smíme všichni naráz zhasnout světlo? Vliv spotřebitele na elektrizační soustavu. Vesmír, 87(4),
pp. 250-251.
Štěrba, M. (2006). Retrieved from Simulační model energetické soustavy ČR: http://​proatom​.luksoft​.cz​/view​
.php​?cisloclanku​=​2006071001
TenneT Holding B.V. (2018, October 10). Go Live of congestion management on the German-Austrian Bidding
Zone Border (DE-AT BZB) on 1st of October 2018. Retrieved from https://​www​.tennet​.eu​/news​/detail​/go​-live​
-of​-congestion​-management​-on​-the​-german​-austrian​-bidding​-zone​-border​-de​-at​-bzb​-on​-1st​-of​-oc/
Třetí liberalizační balíček v energetice. (2009, July 21). EurActiv.cz. Retrieved from http://​www​.euractiv​.cz​
/energetika​/link​-dossier​/liberalizace​-unijni​-energetiky​-000055
Vnouček, S. (2010). Čtyři miliardy ročně? Pokud úřady dovolí – Rozvoj české přenosové soustavy do roku 2020
musí zajistit připojení nových energetických zdrojů včetně obnovitelných. Pro-Energy magazín 2010(3), pp.
30-33.
Vrána, V., & Kolář, V. . (2000). Dimenzování a jištění elektrických vedení. Retrieved from Studijní text Fakulty
strojní Katedry obecné elektrotechniky VŠB-TU Ostrava: http://​fei1​.vsb​.cz​/kat420​/vyuka​/Bakalarske​_FS​
/prednasky​/sylab​_dimenz​_bc​%20FS.
166 About the Authors
About the Authors
Mgr. Bc. Petra Bendlová was born in Ostrava, where she studied European Administration. She then continued
her studies in Brno in the area of International Relations and Security and Strategic Studies. Her thesis was entitled
A Comparison of Selected Predictive Methods in the Case of Territorial Ecological Limits on Brown Coal
Mining in the Most Basin. After completion of her master’s degree, she became a research assistant / project
coordinator in the field of traffic safety research. For a long while, Petra practiced time-management and stress
resistance while on parental “leave”. She currently works as a project manager responsible for projects in the field
of nature and landscape protection, particularly measures to increase water retention on land. Her hobbies include
returning to her childhood years with her children, building a natural garden, reading literature, photography
and being creative, and taking part in rural life with its traditions and new impulses.
Mgr. Ľubica Bodišová was born in Trnava, Slovakia. She holds a bachelor´s degree in International Relations
from Masaryk University in Brno and a master´s degree in International Relations and Energy Security from
the same university. She received the I. A. Bláha prize for her bachelor thesis “The Northern Sea Route: Oil
Transportation Alternative for Current Sea Lanes of Communication?” published in the Czech Journal of Political
Science. In her master thesis, she focused on mapping the discourse surrounding the recast of the Energy
Efficiency Directive, a key piece of EU energy efficiency legislation. During her studies, she spent one semester
at the University of Malta and one semester as an intern in an association focused on EU energy policy monitoring
called Central Europe Energy Partners. Currently, she works in the electricity sector, focusing on EU electricity
market integration and international cooperation. She is based in Bratislava, Slovakia.
Mgr. Patrícia Brhlíková was born in Kremnica, Slovak Republic. She holds a bachelor’s degree in International
Relations and Diplomacy from Matej Bel University in Banská Bystrica, Slovakia and a master’s degree in International
Relations and Energy Security from Masaryk University in Brno. Patricia has completed several internships in the gov-
ernmental,business,research,andmilitaryspheres.Inherstudiesandinternships,Patriciafocusedonelectricity-relatedtopicsand
EUenergypolicy.Currently,sheworksasa Specialistinthe ElectricityMarketDevelopmentDepartment
atSlovenskáelektrizačnáprenosovásústava,the electricitytransmissionsystemoperatorofthe SlovakRepublic.Inher
position, Patricia works on the implementation of EU legislation concerning the internal electricity market and pan-European
and regional market integration. In addition, Patricia actively cooperates with her former faculty department.
doc. Mgr. Filip Černoch, Ph.D. completed his doctorate at the Department of European Studies at the Faculty
of Social Studies, Masaryk University, where he is also currently engaged as an expert researcher and lecturer
in the Department of International Relations and Energy Security. He studies how energy transition (decarbonization)
impacts different stakeholders in the energy system–companies, customers, and governments. In his recent
research, he studied cross-border diffusion of energy policies between the Czech Republic and Germany
and also the phenomenon of local opposition to coal mining in the Czech Republic. He teaches the Energy Policy
of the EU and environmental aspects of energy.
Mgr. Jana Červinková was born in Česká Lípa, Czech Republic. She holds a bachelor’s degree in International
Relations and European Studies from Masaryk University in Brno and master’s degree in International Relations
and Energy Security from the same university. She received the I. A. Bláha prize for best essay for her bache-
lor’s thesis “Influence of the Southern Gas Corridor Projects on Energy Security of Affected Countries”. In her
master’s thesis, she pursued the same topic, energy security in the gas sector in South East European countries.
She regularly writes articles for the website oEnergetice.cz, where she focuses on natural gas, renewable
energy, the environmental aspects of the energy sector, and European energy policies. Currently, she works as
a Specialist on European Projects for NET4GAS, s.r.o.
167About the Authors
Mgr. Gabriela Prokopová holds a bachelor’s degree in International Relations from Masaryk University in
Brno and a master’s degree in International Relations and Energy Security from the same university. In her diploma
thesis, she analyzed the case study of Czech utility ČEZ in terms of its exception from the EU ETS. She
works as an energy efficiency expert at the Ministry of Industry and Trade of the Czech Republic. Her main field
of work involves the analysis of data to do with energy savings, which pushes her to think about energy issues
from various points of view.
Mgr. Tereza Stašáková was born in Liberec. She holds a bachelor’s degree in European Studies and Sociology
from Masaryk University in Brno and master’s degree in International Relations and Energy Security from the same
university. During her studies, she spent one semester at Southampton University in the United Kingdom. She
also participated in several internships, for example in the European Parliament in Brussels, at the Ministry of
Trade and Industry–Department of Nuclear Energy, and as a student assistant in the Department of International
Relations and European Studies at Masaryk University. At the end of her studies, she received a Dean’s prize
for Best Student in a Masters Program. Her diploma thesis was written within the cooperation of the Ministry of
Trade and Industry and focused on the current issue of financing new nuclear power plants in the Czech Republic.
Currently, she works as an Energy Analyst at EGÚ Brno, a. s.
Mgr. Eliška Trmalová was born in Prague. She holds a bachelor´s degree in International Area Studies from
Charles University and a master´s degree in International Relations and Energy Security from Masaryk university.
During her studies, she spent two semesters at foreign universities – the University of Regensburg (Germany)
and La Sapienza University of Rome (Italy). She also participated in internships at the Ministry of Foreign Affairs
of the Czech Republic and at the Prague Security Studies Institute. Her work focuses mainly on international
cooperation, renewable energy sources with regard to the European and Czech legislatures, and on innovative
technologies in the electricity sector. Her master’s thesis modelled the auction mechanism for RES in the Czech
Republic. She also wrote a policy paper on renewable energy subsidies for the Europeum Institute.
doc. PhDr. Tomáš Vlček, Ph.D. works at the Department of International Relations and European Studies and
the International Institute of Political Science of Masaryk University. He is a member of the Center for Energy
Studies, an independent research platform, a Senior Expert of the European Energy Research Alliance (EERA)
Energy Strategy Expert Group (EESEG), and a member of the Czech Nuclear Education Network academic association.
He was selected for the International Visitors Leadership Program, the prestigious professional program
run by the United States Department of State, and also initiated and manages the widely respected International
Summer School of Energy Security, held every August in Telč since 2012. He has taken part in nearly 30 government
and academic research projects on energy security and energy policy, has delivered dozens of papers at
international conferences, and has undertaken a number of research forays to Russia, the USA, and countries
in Europe, especially Central and Eastern Europe, as well as South-Eastern Europe. His research specialization
focuses on the geopolitical aspects of energy, nuclear energy, and energy security in post-communist Europe.
Mgr. et Mgr. Veronika Zapletalová, Ph.D. obtained a doctorate in International Relations at the Faculty of
Social Studies at Masaryk University in 2016. In the past, Veronika worked at Eurocentrum Brno – Office of
the Government of the Czech Republic (2007 – 2009). In 2009, she participated in a six-month stay at the University
of Ljubljana focused on the policy-making process in the US and EU. After her return, she took part in numerous
government and academic projects on energy security and energy policy. Veronika currently works as an assistant
professor in the Department of International Relations and European Studies in the Faculty of Social Studies
at Masaryk University and as an academic researcher at the International Institute of Political Science. Her major
interests are the external dimension of EU energy policy, the liberalization of the energy market in the EU, and
the shape of governance in the EU.
The authors’ opinions are their own and do not reflect those of the institutions in which they work.
Tomáš Vlček et al.
The Energy Sector and Energy Policy of the Czech Republic
Editor: Tomáš Vlček
Authors: Tomáš Vlček, Ľubica Bodišová, Patrícia Brhlíková, Filip Černoch, Jana Červinková, Gabriela Prokopová, Tereza Stašáková,
Eliška Trmalová, Veronika Zapletalová, Petra Bendlová
Design and Typography by Michal Ivanec, www.behance.net/michalivanec
English proofreading by Mark Alexander
Cover image from unsplash.com.
Published by Masaryk University Press
Žerotínovo nám. 617/9, 601 77 Brno, Czech Republic
2nd revised edition, 2019
www.muni.cz
www.mve.fss.muni.cz
www.energy.fss.muni.cz
ISBN 978-80-210-9352-2
https://doi.org/10.5817/CZ.MUNI.M210-9352-2019
MUNI
PRESS