Page 45 - CE Outlook Regions 2023

3.1.4 Energy & power

Majority-state-owned energy utility CEZ is responsible for organising a
tender for the construction of the 1,200 MW third block at the Dukovany
NPP. The utility is expected to lead negotiations with the bidders and
receive final offers from France’s EDF, South Korea’s KHNP, and the
US’ Westinghouse by the end of September 2023.

The planned year of completion of the Dukovany expansion is 2036,
but this together with CZK160bn (€6.6bn) investment costs have been
contested as unrealistic by independent energy analysts. Additionally,
security and environmental analysts objected that the investment is not
addressing Czechia’s short-term needs to decouple from Russian
energy or to boost renewable energy.

The Kremlin's military campaign combined with the prospects of energy
supplies disruptions prompted the cabinet to take more action in
addressing the country’s high dependency on Russian energy imports,
which at the time of the invasion meant that over 90% of gas had been
coming from Russia.

Due to its about 30% dependency on Russian oil from the Druzhba
pipeline, Czechia has been exempted from the EU embargo on imports
of Russian oil. Following the shareholders’ November agreement to
increase the TAL pipeline capacity, Czechia could become independent
from Russian oil imports by 2025.

Through CEZ, Czechia also secured 3bn cubic metres of annual gas
capacity at an LNG terminal in the Netherlands. It also resumed work
on the shelved project of Stork II pipeline bringing gas from the Polish
LNG terminal at Swinoujscie to Czechia’s northern Moravian region.

Nine gas storage facilities in Czechia were at nearly 100% capacity
ahead of winter and dropped to 86% following the frosty weather in the
first half of December. Energy analysts estimate about ¾ of winter gas
consumption comes from gas storage facilities. Czechia is expected to
maintain 21% capacity by March if last winter’s temperatures are
projected. If the winter season is frostier, Czechia could be down to
11% capacity in March.

Windfall tax measures on energy companies have been criticised by the
two largest privately-held energy companies, EPH of Daniel Kretinsky
and Patrik Tkac, and Sev.En of Pavel Tykac. EPH announced it will
relocate its trading branch EP Commodities outside of Czechia in 2023
so as to avoid being taxed.

The community energy bill is set to be submitted to the cabinet and
both chambers of the parliament for approval in 2023. If ratified, the bill
could pave the way for villages, small towns or city quarters to be
sustained from renewable energy, possibly transforming the Czech
energy market with its centralised energy distribution. The bill was
withdrawn in the autumn 2022 by the industry ministry over worries

45 CE Outlook 2023 www.intellinews.com