Coal in the Czech Republic is likely to run out by the middle of the century and classic energy resources will become obsolete. So far there are only theoretical ideas about what is going to replace them. The country's largest energy producer, the semi-state-owned company ČEZ, has started decommissioning of coal-fired power plants. Private companies Energetický a průmyslový holding (Energy and Industrial Holding) (EPH) and Sev.en are moving in the opposite direction and they cannot lose for a short time. However, they risk more than enough in the long run, for the main goal of business is no longer profit, but sustainability.
At its board meeting held at the end of the last year, the European Investment Bank (EIB) decided to stop financing fossil fuel projects starting from the end of 2021. This was announced by EIB President Werner Hoyer. First of all, multinational companies have already accepted this paradigm change and therefore give priority to their social responsibility. For example, the E.ON energy group emphasizes, among other things, climate protection, i.e. limiting greenhouse gas emissions by selecting the appropriate fuel, controlling combustion efficiency and energy production, and cleaning flue gases. Of course, the group uses renewable resources. “Coal Age" as one of the last remains of the industrial era comes to an end, and companies that fail to catch up or try to stop this trend are likely to face a similar fate to that of prehistoric lizards.
“The energy mix towards which the Czech Republic should be heading is described in the state energy concept and is also included in the government's program statement. However, we continually regulate its timetable with regard to the circumstances; everything is interconnected and dampening of one resource means that we have to replace it to the same extent with other ones, in our case emission-free, ”Minister of Industry and Trade Karel Havlíček said. According to him, the Czech government is firm in its efforts to ensure the production of electricity by a mix of resources based on an increasing share of nuclear energy and renewable resources, and on the contrary a gradual decrease in production in coal-fired power plants. "Further specification of the energy mix by 2030 can be expected also in connection with the climate-energy goals within the national energy and climate plan," Havlíček said.
The Czech Republic Is Willing to Say Goodbye to Coal If It Has Nuclear Power
In early December 2019, the European Commission adopted a strategic long-term "prosperous, modern, competitive vision of a neutral climate economy" by 2050. "By 2050, 80 percent of electricity is to be produced by renewable energy resources. Together with nuclear energy, these resources will be the backbone of Europe's carbon-free energy system,” Commissioner for Climate Action and Energy Miguel Arias Cañete said.
Strengthened also by this statement, Czech Prime Minister Andrej Babiš headed for Brussels at the end of last year with a strong stance on nuclear energy, without which the Czech Republic will not fulfil its obligations under the EU plan known as the Green Deal. Babiš demands that the Union recognizes that nuclear energy will be of key importance for emissions reduction for some countries. This, however, is opposed, for example, by the traditional attitude of Austria, which does not consider nuclear energy to be safe, and it would also require a compromise from Germany, which gives up nuclear energy with great difficulty. Babiš therefore succeeded only half. The Czech Republic can implement the energy mix based on nuclear power, but nuclear power plants will not be classified as clean energy resources. Therefore they will not be supported from EU sources.
Much of Europe is moving away from coal-fired power generation. In some countries they have already set a date for a coal “exit” - for example, in Germany it should occur no later than in 2038. A coal commission which should prepare a similar plan is now also being set up in the Czech Republic. Most European countries now promote cleaner energy resources. Their position will also be reflected in the adoption of new legislation, which will increasingly be made to disadvantage of coal. The time has come for the transformation of the energy sector, with renewable resources becoming increasingly available and cheaper.
Next year, the energy company ČEZ will shut down coal-fired power plants of an installed capacity exceeding one gigawatt. “It will be the biggest shutdown of coal blocks in the company's history. They are to be replaced by more environmentally friendly resources,” Daniel Beneš said. The domestic capacity of ČEZ's coal-fired power plants is now 4.64 gigawatts. Of the total amount of electricity it generates annually, ČEZ will lose about five percent by their shutdown.
Prunéřov 1 power plant, Mělník 3 power plant, whose only coal block is the largest in the Czech Republic, and one of the two units of Mělník 2 power plant will stop producing electricity next year. Next waves of coal block shutdowns should follow in 2030 and 2036. "ČEZ group will gradually phase out electricity generation from coal and switch to emission-free energy sources. The reason is that further reconstruction and ecologization to new, stricter limits will no longer pay off in some blocks in terms of return, and also coal will run out,” Beneš said. “So far, we expect that the Czech Republic will stop using coal for electricity production in 2050,” ČEZ spokesman Ladislav Kříž confirmed.
Who Endangers “Křetínský’s" Economy
Excessive pressure to reduce emissions of harmful gases, according to billionaire Daniel Křetínský, threatens the economy and the living standard of Europe. Křetínský stated this in October at the Globsec Tatra Summit 2019 conference held in Štrbské Pleso in Slovakia.
The vast majority of EU countries want the Union to commit itself to achieving carbon neutrality by 2050. This means that there would be minimal carbon dioxide emissions. And the emissions produced by transport or, e.g., industry, forests would absorb that transport or industry would produce.
However, Křetínský claims that such ambitions to reduce emissions are not realistic because Europe doesn't have the necessary technology and doesn't know how much it will cost in the future. “We shouldn't create expectations that make it impossible to invest in industry and which would drive industry out of Europe. We should make it clear that our competitiveness will always be or concern," Křetínský said. However, it is not Europe that is endangered, but it's the Křetínský's Energy and Industrial Holding (EPH). The competitiveness that Křetínský speaks about is most likely ruthless profit making in the spirit of the Gründer's 1990s. Such a way of thinking can endanger not only the future of EPH, but to some extent also the rest of us.
Křetínský's EPH is a Central European energy group that owns and operates facilities in the Czech Republic, Slovakia, Germany, Italy, the United Kingdom, France, Hungary, and Poland. EPH is a vertically integrated energy utility covering the complete value chain from brown coal mining through electricity and heat generation to electricity and heat distribution. This includes delivery and trading platforms on the one hand and gas infrastructure management on the other hand.
EPH operates two thermal power plants in Slovakia, two in the United Kingdom, one in Sardinia, one in Hungary, Opatovice power plant, Prague Heating Plant (Pražská teplárenská), Komořany u Mostu heating plant, and Pilsen Heating Plant (Plzeňská teplárenská). Through Lausitz Energie (LEAG), which includes Kraftwerke AG, it operates four power plants - in addition to the three Lusatian brown-coal power plants - Jänschwalde, Schwarze Pumpe, and Boxberg - it also manages one block at the Lippendorf Power Plant near Leipzig. Other power plants under EPH include the coal-fired power plant near Hannover and the brown-coal Buschhaus and Schkopau in Saxony-Anhalt. EP Sourcing supplies more than three million tons of thermal brown coal to United Energy, Pilsen Heating Plant (Plzeňská teplárenská), and Opatovice power plant.
The now only potential Germany’s move away from coal threatens the brown coal business of Daniel Křetínský's EPH in Lusatia. The local Greens have long been pushing for the legalization of the so-called Kohlenausstieg, i.e. a move away from coal. This would mean the immediate closure of the 20 dirtiest power plants, a ban on the construction of new coal sources, as well as a stop sign for opening new mines. LEAG, which covers EPH's German activities, would have to say goodbye not only to the Jänschwalde power plant, but also to the plans to expand the Nochten and Welzow-Süd II mines. LEAG has previously resigned from mining at the Jänschwalde deposit and counts with only partial extraction of the Nochten mine.
Another Person Also Heading Against the Flow Is Pavel Tykač
Another Czech “coal-baron", who is relatively threatened by the pressure to reduce emissions of harmful gases, is Pavel Tykač. His company, Severní energetická - Sev.en is focused on classical energy sources. Last February, the company said it wanted to focus primarily on conventional energy sources in Western Europe in their purchases. The company has previously announced that it was ready to invest more than one billion EUR (about 26 billion CZK) in acquisitions.
Last October, Luboš Pavlas, CEO of the Sev.en Energy Group, confirmed that the holding is still interested in purchasing the Počerady brown coal power plant, which, with a power output of 5 × 200 MW, is one of the largest coal-fired power plants in the Czech Republic. In early January of this year, ČEZ said that Tykač will really become the owner of one of the dirtiest energy sources in four years and will pay only two billion crowns (Sev.en originally offered 10 billion crowns). However, Sev.en Energy supposedly plans to invest billions of crowns in modernization and ecological measures in the power plant. But ecologists from Hnutí Duha (Rainbow Movement), Greenpeace, and Limity jsme my (Limits Are Us) civic movement do not believe it.
The fact that Tykač is planning further activities in the field of conventional energy sources may seem absurd if he does not take into account the fact that his Sev.en also sticks to the obsolete strategy of profit at all costs, regardless of social consequences. The way of thinking of some Czech entrepreneurs probably stagnated somewhere in the last century.
Since the last year, Sev.en Energy has been covering companies formerly associated in the Czech Coal and Sev.en groups. The group operates two brown coal mines and four coal-fired power generating units in the Czech Republic. It employs more than 3200 people. The value of consolidated assets before the acquisition of half of InterGen is over 850 mil. EUR (roughly 21.9 bil. CZK). In Australia, Sev.en operates the Millmerran and Callide C thermal power plants.
Tykač's company Vršanská uhelná negotiated with ČEZ about the purchase of Počerady the year before last. However, ČEZ's supervisory board did not approve the transaction at the time. Sev.en Energy acquired Počerady based on the option in the contract concluded six years ago. ČEZ saw this as an opportunity to get rid of the "dirty" source, and this year it has succeeded, even though it was under pressure to keep the source; ecologists believed that forcing a partially state-owned company to shut the power plant down would be easier than forcing a new private owner to do so. Especially when Tykač's Vršanská uhelná owns a coal quarry right next to Počerady, with enough brown coal to last for decades of operation.
Tykač's Sev.en also operates the Chvaletice power plant, which was granted an exemption from the Region for the limits of mercury oxides and nitrogen oxides, which will come into effect from August 2021. The decision is not final. The Greenpeace movement is going to appeal to the Ministry of the Environment. Activists take the Chvaletice power plant as a precedent because many power plants do not meet the new emission limits. A demonstration took place against further operation. In addition to the banners they brought, participants shouted various slogans, such as: "Coal belongs underground" or "Let's change the system and not the climate".
Jan Polášek, one of the organizers of the event, said: "The protestants are accompanied by a float with an artificial figurine representing a coal-baron, who receives billions a year from coal mining,".
"Within the transition to a climate-responsible economy, the European Commission wants to take a number of steps and initiate a massive investment in environmental projects in the next few months," said EU executive Ursula von der Leyen, who presented a climate plan known as the European Green Agreement. The first measures will include a draft standard committing the Union to climatic neutrality in the middle of the century or to the creation of a fund to support regions dependent on fossil fuel energy. Apart from other countries, the Czech Republic could also draw funds from it.
According to the EC president, the fund for coal regions should make it possible to find investments in the amount of € 100 bil. EUR (2.5 trillion CZK) that will help several dozen now coal-dependent areas in many EU countries to cope with the upcoming changes. The main beneficiaries should include Poland or industrial areas in Germany, but other countries, including the Czech Republic, will also get their share.
Therefore, our "coal barons" probably cannot lose. They will make money on mining and burning coal and, on top of that, they are likely to receive billions from the fund for coal regions. It is thus a manifestation of maximum irresponsibility, indifference, and non-solidarity towards Europe's present inhabitants and its future generations. In the short term, such unscrupulous speculation may pay off, but in the long run it is likely to be an unbearable business risk with a poor end. But maybe Křetínský or Tykačov don't mind, because their minds are set in a different way than the rest of Europe.