In terms of mining, the exploitation of natural gas is guided by Act No. 44/1988 Coll. on the protec-tion and utilizaprotec-tion of mineral resources (The Mining Act) (see “Zákon č. 44/1988 Sb.”) and by the Czech Mining Authority, as in the case of coal. The trade with natural gas is treated in Act No. 458/2000 Coll., on business conditions and public administration in the energy sectors and on amendment to other laws (The Energy Act).
In the Czech Republic, the gas sector deals with the regulatory framework and conceptual materials very well, while it in many aspects (maybe naturally) even precedes them. None of the legislative mate-rials in any manner deviates from the established course (in the fi eld of natural gas), which also adds to this sector the necessary stable foundation which new projects and investments demand. Unlike the coal
116 It is a general advantage of gas fi red power plants (not gas combined cycle power plants) which increases the importance of this sort of power plant in terms of their contribution to the management and stability of the entire electricity network.
It is the fi rst (gas) cycle, where natural gas is mixed with air and sent under pressure into a turbine, where it burns, that is easy to change the output in an instant. The second cycle is slow the same way as it is in coal fi red power plants. When a gas combined cycle power plant is needed to be regulated in an instant, the second cycle must be shut down.
or nuclear sectors, the natural gas sector does not have any important political or technical problems and that development of this sector is proceeding smoothly.
On November 12, 2009, a simulation of a state of crisis took place as part of preparations for new leg-islation on emergency situations. During the simulation, gas supplies were not restricted to any costumers.
The then Minister of Industry and Trade, Vladimir Tosovsky, 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). According to the regulations of Act No. 334/2009 Coll., on states of emergency in the gas industry, the management of the entire system is, in the event of an emergency, to be taken over by the operator of the transit network (NET4GAS, s. r. o.), who will then run it together with other companies until the standard supplies of natural gas are restored.
In the gasworks sector, the obligation (both local and supranational) to keep strategic reserves has not been implemented yet. This did not change until the introduction of the amendment to The Energy Law, when as Parliamentary report No. 232/4 it was approved by Parliament in June 2011 and signed by the president. This amendment defi nitively implements the Third EU Liberalization Package (mainly Directives 2009/72/EC and 2009/73/EC). Among other things it sets the obligation for gas traders to store in reservoirs a minimum of 20 % of the natural gas volume which their costumers took in the previous twelve months. This new obligation, entering into force 30 days after the amendment had been announced, caused quite negative reactions, since a great part of the reservoirs was being used by RWE Transgas, a.
s. for its own purposes. There are, therefore, a small number of free facilities for all the other suppliers, so they will have to use storage facilities beyond Czech borders, which can affect the price of natural gas for the end-user. It is, however, necessary to wait for real market reactions, since initial proclamations about emerging changes are always slightly overstated.
In the natural gas sector, the Czech Gas Union (ČPU) also plays an active role, founded as a corporate interest group on April 27, 1994. The CPU stands outside the legislative and regulatory sector, its goal is among other things to protect the trade interests of its members, to represent its members to the state ad-ministration, self-governed entities and in the public and to perform the function of an employer’s union (see Česká plynárenská unie). Aside from the CPU, there is also the Czech Gas Association which is aims at the increasing professionalization of the gas fi eld, mediating the transmission of information related to the gas industry and representing the Czech gas industry at an international level (for example, in the International Gas Union) (see Český plynárenský svaz).
Czech legislation relating (not only) to natural gas has been closely linked to EU legislation since 2004. EU legislation is presented in the form of packages and directives. There are a large number of them, which is why we in the further text discuss only those relevant to the gas industry sector. In addition to local particularities, the legal framework of the Czech Republic implemented EU legislative measures mainly at the turn of the century. The State Energy Concept and its revision, aside from domestic aspects (reserves of coal, nuclear energy, etc.) likewise refl ect the very same European approach to the energy sector. The gas sector in the Czech Republic can generally be considered as properly regulated in terms of legislation. It reacts well to the legislative framework and conceptual materials and it also accurately deals with European legislation. In terms of natural gas, it is also clear that both domestic and EU legislation do not contradict each other and do not deviate from the long term course, by which they contribute to the stability of the sector as well as to the anticipation and preparation of further development.
All EU directives have been adopted in the Czech Republic and implemented in its laws. Particular problems of a technical and legal nature appeared during the initial liberalization of the electricity and gas sector following Directive 98/30/EC. Although it negotiated a delay in the Directive’s implementation until 2008, the Czech Republic has carried its directions out successfully and had done so already in 2007.
5.4 Demand Forecast
The Czech Republic has seen rather low growth in demand in recent years. This could change in the near future with predicted overall growth of demand for energy and especially with a decrease in the share of liquid and solid fuels in the TPES mix. This will be compensated by nuclear energy, renewable resourc-es and natural gas. Natural gas will then, according to the SEP, become a much more important part of the TPES mix of the Czech Republic, accounting for approximately one fi fth of the TPES mix. Aside from its use for heat and electric power generation, it will mainly be used in transport. The promotion of LNG and CNG is based on the program of alternative fuels for transportation issued by the European Commission in November 2001. The program presumes a gradual substitution of motor fuels based on oil with alterna-tive fuels. It is expected that natural gas will by 2010 replace 2 %, by 2015 5 % and by 2020 10 % of total motor fuel consumption in the EU. The operation of 350,000 natural gas powered vehicles is planned by 2020. Gas consumption in the transport sector would then reach approximately 1 bcm. Natural gas is the only resource with a stable (approximately 20 %) share in all goals and scenarios.
Tab. 5.7: The Shares of Solid, Liquid and Gas Fuels in Energy Resource Consumption According to the State Energy Policy of the Czech Republic from 2004 and Its Update from
February 2010 and August 2012 (in %)
Solid 52.4 42.5 45.3 30-32 30.5 24 20 12-17
Gas 18.9 21.6 15.7 20-22 20.6 20 21 20-25
Liquid 18.6 15.7 20.9 11-12 11.9 20 19 14-17
Nuclear 8.9 16.5 15.3 20-22 20.9 25 25 30-35
Renewables 2.6 5.4 2.9 15-16 15.7 11 15 17-22
Source: Státní energetická koncepce, 2004, p. 11-12, 40-49; Ministerstvo průmyslu a obchodu, 2010a, p. 77-92; Český stati-stický úřad, 2008; Ministerstvo průmyslu a obchodu, 2012, p. 20-21.
The growth of natural gas demand is very well illustrated in the forecast of Business Monitor Inter-national (table No. 5.8), which by 2019 predicts its increasing consumption by more than 45 % from 9.2 bcm/y in 2011 to 13.4 bcm/y in 2019.
Tab. 5.8: Natural Gas Demand Prediction for the Czech Republic
Year 2011 2012 2013 2014 2015 2016 2017 2018 2019
Consumption 9.2 9.6 10.0 11.2 11.6 12.0 12.4 12.9 13.4
% change 100 104.3 108.7 121.7 126.1 130.4 134.8 140.2 145.7
Note: fi gures in bcm.
Source: Business Monitor International, 2010, p. 19, 75. Percentage conversion by T. Vlček.
Besides consumption for transportation purposes, the reasons for the increasing demand for natural gas can be observed in the development of combined cycle and gas and combustion power plants. The CEZ Group has launched the preparation of combined cycle projects mainly in North Bohemia, while the project located in Pocerady is in the most advanced phase, including two combined cycle blocks with a capacity of 838 MWe. It intends to invest 20 billion CZK in the construction of the project in Pocerady.
In June 2009, the CEZ Group closed a construction agreement with Skoda Praha Invest. The power plant on which building work started on April 1, 2011, should be completed in June 2013. The Usti region, however, opposes this construction due to pollution of the environment and is asking CEZ to close another power plant in the region before opening it (see Sedláčková & Adámková, 2009).
The localities intended for construction of combined cycle power plants are Melnik and Usti nad Labem – Uzin. Gas supplies to combined cycle power plants should be provided by RWE Transgas, a. s., with which the CEZ Group also has a 15-year deal (see Horáček, 2009).
According to the ČPU, projects to build seven combined cycle gas power stations are currently at different stages of development. Their total output will be 1820 MW (see “Bartuška”, 2010).