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neo-fascist Alternative für Deutschland. Czech MEPs Alexandr Vondra and Jan Zaharadil – who opposed the EU goal to end the sale of new cars with combustion engines by 2035 –often parrot Klaus’s comments, as do ODS members of parliament and Fiala himself.
The party’s stance is also a result of its links to the country’s energy oligarchs, notábly Daniel Kretinsky, owner of EPH, and Pavel Tykac, owner of Sev.en Energy. EPH is now the country’s no. 1 energy business through its foreign investments – notably importing Russian gas – and Kretinsky also has significant media power, particularly through his ownership of Blesk, the best-selling daily.
Former ODS Prime Minister Mirek Topolanek, who was brought down by a corruption scandal, moved swiftly from the Prime Minister’s Office, where he followed policies beneficial to the oligarchs, to actually working for Kretinsky. Topolanek frequently targets the EU and its green policies, referring to the EU as the "green Taliban".
EPH and Tykac’s Sev-en Energy want a slow transition to
a carbon-neutral future, with EPH setting a company target of as late as 2050 for going carbon-neutral, while Sev-en Energy has yet to commit to a date. Tykač has recently made several media appearances arguing that if Czechia is to cut its reliance on the Russian energy supplies it will result in
a dramatic fall of living standards and popular unrest unseen in the country up to now.
But the Czech government failure is much wider than just the ODS, with Social Democrat (CSSD) governments and Babiš‘ populist ANO party continuing to defend heavy industry, including coal mines and coal-burning power plants,
while giving only niggardly incentives for green energy or e-mobility. As premier, Babiš tried to block the EU’s target of going carbon-neutral by 2050 and in the election campaign he attacked what he called the “green madness” the EU was imposing on the country.
The CEZ Republic
This cross-party consensus is epitomised by the way CEZ, the majority state-owned power utility, has remained so dominant in forming the country’s energy policy.
Czech has recently burnished its green credentials by publishing its Vision 2030, according to which the company plans to become carbon neutral by 2040. It aims to reduce the share of coal-fired electricity generation from 39% in 2019
to 25% by 2025 and to 12.5% by 2030, partly by building 1.5 GW of renewable energy by 2025 and 6 GW of RES by 2030. But it remains focussed on nuclear power and particular the expansion of Dukovany.
CEZ‘s Chief Executive Daniel Benes has remained in charge since 2011, through ODS, CSSD, ANO and then again ODS-led administrations, despite a series of scandals as well as threats by political leaders to remove him once they win power. He is
said to have the backing of current President Milos Zeman
(a former CSSD leader), as well as Klaus, his ODS predecessor.
In the past CEZ was rumoured to have also been used as
a piggy bank by both the CSSD and ODS, allegations it has always denied.
Czech governments have continued to defend CEZ’s strong market position against EU probes– it is now facing a new challenge from Brussels over the funding of its massive investment at Dukovany – while media reports about cosy deals with Kretinsky’s and Tykac’s energy companies have not been properly investigated by the Czech competition office.
“If, after the new cabinet assumed office, we expected to see the breaking of influence the CEZ management has had on the state’s decision making, and which has been nourished for many long years, then we were simply wrong,” Edvard Sequens, environmental NGO Calla lead economy analyst, told bne IntelliNews, adding that this influence is perhaps even bigger than ever.
“We can see this now when the state provided CEZ with an exclusive loan of CZK74bn to secure CEZ’s electricity trading at a mere 3% interest rate, and the investment into the new nuclear reactor will involve a further loan of more than CZK200bn.”
Despite its previous criticism, the new ODS-led government has followed its predecessor by backing the company’s plan to build new units at Dukovany and to do so by nationalising its nuclear division – as minority shareholders would probably sue CEZ for investing in such a costly and financially risky project.
The government still seems some way from detailing its plans, but if it follows predecent, it is likely to choose an option put together by CEZ management itself. Any buyout of the nuclear division, as well as the investment in Dukovany, is of course set to make it very difficult for the government
to slash the budget deficit, let alone offer tax cuts, as the ODS still dreams about.
Similarily, CEZ management seems to be winning its campaign against a special windfall tax on the energy sector in order to pay for a scheme to compensate customers for the soaring prices. Instead CEZ is offering to pay a super dividend from its bumper profits, which would also conveniently boost the share price and management bonus scheme payouts.
The Czech government will need to face down CEZ and
the country’s energy oligarchs if it is to have any chance of meeting the challenges of cutting the country’s dependence on Russian energy, mitigating the cost of living crisis, keeping the budget deficit under control, as well as the longer-
term tasks of tackling climate change and moving to a new sustainable growth model.
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