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, among other things, noted that “despite the liberalization of the electricity market, the latter is dominated by a very dominant compa-ny, which causes a low level of competition” (see Odborná pracovní skupina pro energetickou bezpečnost Výboru pro koordinaci zahraniční bezpečnostní politiky, 2006, p. 8-9). The working group was, therefore, right in both cases, but these claims can be assessed anew with respect to the events of the last fi ve years.
It proves that, even though the dominant position of CEZ remains undisputable, this position is in-creasingly 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, when it was originally built for pur-poses of centralized production and transmission. The requirements which the current sector development imposes on the electricity 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 decen-tralization). It is entirely evident that CEZ has no intention of losing its dominant position, responding to the developing situation in its own manner, such as, for example, by initiating the project of electricity production from renewables or by fi ghting trading newcomers in the market.
The present (European and thus Czech as well) trend is rather clear. It takes the direction of the devel-opment of renewable energy sources, efforts to accomplish greater energy effi ciency and energy savings, while there are also the signs of initial steps on a way of shifting to a decentralized energy sector. There is no such investor which would be interested in building new large classic sources (with the exception of Ledvice), because the return on investments is far from certain. With respect to where the development is directed and to gradual termination of the existing large coal blocks, the Czech electric power industry is in the forthcoming years to expect either quite likely a state of crisis associated with a drop in electricity production from coal and with 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 No. 8.12) when turning to a new arrangement of the electric power industry.
Tab. 8.12: 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
transmis-sion system 747 758 770 783 796 810 872 927 949
- in the distribu-tion 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.
This new character will fi nd its expression in constantly increasing interest in electricity, as its use would be clean and without losses (which is not the case with production). It will involve the constantly increasing implementation of renewables into production, and not only of existing photovoltaic and wind plants, but of geothermal sources, biomass, biogas stations and waste combustion. Large classic conden-sation sources of electricity with enormous capacity will over time be replaced by smaller co-generation units, which will better correspond to the decentralized system of demand, use and production.
The electricity grid will be under the enormous pressure. CEPS, in 10 to 15 years expects the emer-gence of a qualitatively new energy sector, which will, among other things, include “a change of primary sources’ capacity structure and a partial shift of producing capacities onto the level of distribution net-works, developed mechanisms of use control through smart systems and their interconnection with the market setting, integration of the national network control into supranational aggregates and interconnec-tion of the market with electricity, services and regulainterconnec-tion energy” (see Kovačovská, 2011, p. 26-27). The Czech electricity grid was not built for such major and unanticipated electricity transmission changes, where users are accordingly electricity suppliers, while their modernization in terms of modern smart grids will require sky-high investment.
The Czech Republic is the second largest electricity exporter in Europe, behind France. If it wishes to keep this position, the completion of Temelin nuclear power plant is basically a must. This requires even higher investment, but so will safety of electricity supplies increase in a similarly steep manner. This situation in the nuclear power industry is very aptly summarised by Petr Otcenasek, saying: “The expect-ed nuclear renaissance stoppexpect-ed at the instant the combustion of oil, natural gas and coal facexpect-ed problems related to their exhaustion already in the 21st century and with possible negative biosphere impacts” (see Otčenášek, 2011, p. 271).
Table No. 8.13 displays the problems, risks and advantages of potential construction of a new large power plant. Although decentralization and renewables are part of a modern trend, moreover, receiving 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.
Tab. 8.13: The Potential Construction of New Electricity Sources
Source Effect
Brown coal Increasing pressure to breach the environmental territorial limits of mining; absolute surrender on reduc-tion 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), there is an absolute resignation from an environmental dimension to the project (overwhelming environmental effects of transportation of an enormous amount of materials) and an absolute resignation from reducing greenhouse gas emissions.
Gas Given that the Czech Republic does not have any relevant sources of natural gas at its disposal and given that the only true supplier, Russia, employs a policy of using dependence on raw materials’ imports in order to pave the way for its political interests, such a decision would signify giving up on the energy security of the Czech Republic.
Nuclear Although demanding technically and time-wise, this is the solution which would enhance Czech energy security.
Source: Kavina, 2009, p. 326.
The investment necessary for modernizing and keeping the transmission system stable would be astronomic. A more realistic development would be where electricity (and heat) is produced from renew-ables 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 centralized power system. This direction is already set and, despite signifi cant problems (see the chapter about renewables), it is likely that the energy sector will continue on that course. However, 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 are demanding electricity consumers.
If we do not set the clear and long-term direction of the Czech power industry (within a State Con-cept) soon, the country will in the coming years experience either a great electric power industry crisis resulting from hesitancy and inconsistency, or a major, fi nancially enormously demanding, change in the electric power industry, should renewables remain supported as much as they are today.
Acknowledgements
The previous pages presented the basic characteristics of the Czech energy sector, including selected weak and strong points, challenges and opportunities. In addition to the benefi ts of such an undertaking, the effort to deliver a complex picture, naturally, also brings some diffi culties, often excessive generali-zation, understatement of some interesting or important questions or the possibility of inaccurate use of particular information in the whole context. Potential mistakes of that sort as well as any other errors in the book are the exclusive responsibility of the authors of the text.
The authors would like to thank the Department of International Relations and European Studies at the Faculty of Social Sciences, Masaryk University, on whose soil the text emerged in an atmosphere of a maximum goodwill and support. A long list of energy experts deserve a word of gratitude of their own, who in vast numbers visited the Department and provided our students with a number of lectures, infor-mation from which helped to improve the quality of the text. Even though the burden of the publication’s writing was carried only by the authors, the rest of the team engaged in the energy issues at the Department of International Relations and European Studies at the Faculty of Social Sciences, Masaryk University (KMVES FSS MU) made contributions in terms of consultancy and consultations.
Special thanks then go predominantly to Olivera Radovanović for her great work in translating the book, and then to Veronika Zapletalová and Petra Bendlová for preparing smaller parts of the text as well as for helpful remarks on the entire book.
The translations of Czech sources are carried out by our own translator, if the reader wishes to use translated text for legal or offi cial purposes he or she should check to see what the offi cial cersion is.
The book would not have emerged without the fi nancial support of the European Social Fund within the project of The Education for Competitiveness Operational Programme (ECOP) under the jurisdiction of the Ministry of Education, Youth and Sports of the CR (MEYS) “Innovation of lecturing at FSS – the Department of International Relations and European Studies” (CZ 1.07/2.2.00/15.0221); and the specifi c research project of the Department of International Relations and European Studies “Current Issues of European and International Politics” (MUNI/A/0754/2012).
About the Authors
PhDr. Tomáš Vlček completed an advanced post-Master’s State Examination and Master’s studies at the Department of International Relations and bachelor’s studies at the Department of Security and Stra-tegic Studies at the Faculty of Social Studies, Masaryk University. He is currently engaged in the study program International Relations and Energy Security at the Department of International Relations and European Studies at the same faculty and at the International Institute for Political Science of Masaryk University. The mentioned program responds to requirements both from the business and public spheres in their search for experts combining expertise in the fi eld of international relations with acquaintance with the energy sector. Tomáš Vlček participates as a lecturer in courses on the energy security of the Czech Republic, the nuclear energy sector and environmental aspects of the energy sector. He is professionally devoted to issues of Czech energy security, with special reference to the nuclear and electric power sectors.
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 at the Department of International Relations and Energy Security. He is professionally devoted to energy security of the Czech Republic and the EU, the legislative dimension of the energy sector at the EU level and to the EU’s infl uence on Czech energy security. Among other duties he lectures on the courses Energy Security of the EU, Energy Policy of the EU, Energy Security of the Visegrad Countries, Energy Se-curity of the EU and of the Selected European Countries and Transatlantic Relations and Energy SeSe-curity.
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