CZECH REPUBLIC
CZECH REPUBLIC
SECTION 1: ENERGY PROVISION
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Main fuel sources for direct use and power generation
Figure 1: TPES in Czech Republic. (44 MToe in total) (IEA, 2003) •
Degree of reliance on imported energy
Total imported energy from various fuel sources accounted for 46.2 % of TPES in Czech Republic. A summary of the energy balance in 2004-2005 can be found below: Electricity Maximum net generating capacity (MW) Total net electricity production (TWh) Import from foreign countries (TWh) Exports to foreign countries (TWh) Total electricity demand (TWh)
2004 16.387 77.9 9.8 25.5 61.5
2005 17.412 76.2 12.4 25 62.7
Figure: Electricity Balance (source: Energy Regulatory Office, 2005) •
Extent of connection to electricity network (households and businesses; rural and urban)
Eight regional joint stock companies carry out electricity distribution to final consumers. These companies are partly owned by foreign companies, partly (34 to 59 %) by CEZ The Czech electric energy market has been gradually opening since 2002. Since 1 January 2005 all final customers, with the exception of households, have been eligible customers with the right to choose their electricity supplier. In 2005 the share of all eligible customers’ electricity consumption accounts for approximately 74% of the total annual net electricity consumption in the Czech Republic. In 2005, all end users were expected to become eligible customers with the right to choose their supplier by January 2006. As regards electricity exports/imports, and, as the case may be, transit, the quantity of traded values is limited by the limited capacities of the lines on cross-border interconnections. The size of free cross-border capacities depends on the physical electricity flows themselves and also on the commercial load at the respective border interconnection. The method of free capacity allocation is based on ETSO’s (European Transmission System Operators) methodology based on the principle of explicit auctions. •
Any capacity concerns (power generation an/or transmission/distribution)
On 1 January 2005 the total installed capacity of power stations in the Czech Republic was 17,434 MW, with approximately 58% of the power stations’ output connected directly to the transmission system and 42% to the distribution system. Power generation: Currently, there is no concern. But due to compliance with EU regulations, thermal power generation will have to be replaced by clean technologies.
Figure: Electricity generation vs consumption in Czech Republic, (Bubeník, 2005) Distribution and Transmission: There currently exist no bottlenecks in the transmission part of the Czech grid – the grid is capable of transmitting the required volumes of electricity; in general, there is therefore no need to adopt any measures vis-à-vis the electricity market participants
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Potential for renewable energy, energy efficiency and co-generation (i.e. any authoritative assessments)
With an excess capacity of almost 50%, the Czech Republic is the second largest exporter of electricity in Europe (13 TWh in 2002, estimate of 18 TWh in 2003. Coal is still dominating the electricity production. Energy Efficiency: Energy Intensity in Czech Republic is (2000-figures) is 1.6 fold of EU (5-9 MJ per GDP at purchase power parity) average and 2.2 fold of Austrian average (5 MJ per GDP at purchase power parity in 2001) It is a result of energy-intensive industries, centralized structures in the utilities, and a bulk of not yet realized saving potentials on the demand side (panel buildings, electricity production, ...). It has been decreasing by some 25 % in the past 12 years. Most of the energy consumption in the residential and tertiary sector is used for heating. The housing stock is poorly insulated; substantial gains are to be realized in this sector. Industry is still very dependent on coal. A switch to less carbon intensive fuels like natural gas and a structural change would provide lower emissions of CO2 and lower energy intensity. (Austrian Energy Agency) Co-generation: %75 of Czech Republic’s installed electricity production capacity of 15,443 MW is from thermal electricity generation, 41% of which is from CHP. (2003) Renewable energy:
Figure 1: Potentials for renewable energy production in Czech Republic, (source: Bubeník, 2005) Table 1: Production of renewable electricity from different sources with proposed development at 2010 (source: CZ BIOM) ELECTRICITY FROM RES
Electricity from biomass in total Electricity from Co-combustion From pulp and paper industry Clear biomass combustion Biogas plant (excluded sewage and landfill gas) Wind energy Small hydro Large hydro Geothermal Photovoltaic Total RES
2004 (GWH)
2010 (GWH) (ROUGHLY ESTIMATED)
560
2 200
(305) (200) (28) (27)
(600) (220) (1 180) (200)
20 740 1 246 0 0 2 536 (4.2 %)
930 1 120 1 200 15 15 5 480 (8 %)
Hydropower: The technical hydropower potential of Czech rivers amounts to 3.38 - 3.98 TWh/year, 1.57 TWh/year of which is small hydro. (source: IEA, 2003) Table 2: Hydropower generation in Czech Republic (2003) POTENTIAL Theoretical Usable of which small hydro In use of which small hydro Not used yet (only small hydro) Repowering
ANNUAL GENERATION MWH 13 2 280 1 115 1 850 750 410 40
CAPACITY (MW) 100 1 134 398 1 004 268 130 15
NUMBER OF HYDROPOWER PLANTS 1 618 1 610 1 188 1 180 430 200
Biomass: Table 3: Energy potential of biomass from different sources in CZ (source: CZ BIOM, 2004) SOURCE OF BIOMASS Forest biomass Biomass from agriculture Biogas
TECHNICAL POTENTIAL (PJ) 77,6 275 33
ACCESSIBLE POTENTIAL (PJ) 44,8 136 16
Table 4: Energy potential of biomass (source: CZ BIOM, 2004) TYPE OF POTENTIAL Theoretical Technical Usable Available Economic (year 2004)
BIOMASS PRODUCTION (1000 TONNES) 27 385 18 348 13 693 9 037 2 738
ENERGY VALUE (PJ) 411 275 205 136 41
Table 5: Energy production from biomass potential for the CR in 2010, PJ (source: CZ BIOM) Timber And Waste Timber Straw Rape straw Energy plants Total (50% CHPs, 50% heat power stations) Potential for electricity production 30% will be used in 2010
33.1 6.0 9.7 63.0 111.8 55.9 16.8
Wind Power: Gross theoretical potential: 104 TWh/year, Gross electric generation : 4 GWh (EIA, 2003) Several areas with wind speeds above 9 m/s in 50 m above ground level do exist. 23 projects installed between 1990 and 1995 (total installed power 8.16 MW). 17 of them (6.825 MW installed power) are still (partly) operational. Solar energy: About 100,000 m2 of solar thermal collectors with an estimated production of 0.144 PJ are currently in operation. There is a joint Czech-Austrian project on the development of solar thermal energy operated by Arsenal Research. Two "large" on-grid photovoltaic systems are currently reported being in operation, one operated and owned by CEZ (10 kWp) and the second in hotel Panorama in Prague (6 kWp). (AEA, 2003)
Geothermal Energy: The total theoretical potential: 4,641 MW. Exploitable potential: 2,500 to 3,000 MW, corresponding to an installed heat potential of 3,750 to 4,500 MW. No electricity generation reported (EIA, 2003)
SECTION 2: ENERGY MARKET •
Ownership (state/municipality/private/mixture) of electricity and gas utilities and other sources of energy
Electricity: CEZ a.s. is the main electricity production company; 67,5% owned by the National Property Fund. It produces about 70% of the country's electricity in 29 power plants (9 thermal, 2 nuclear, 16 hydro, 1 wind and solar respectively). The rest of the electricity is produced by independent power producers, mainly in combined heat and power plants. Table: Electric energy supplies to eligible customers (in %) 2002 2003 ČEZ 77 63 Elektrárny Opatovice, a.s. 14,9 21,5 PRE 3,5 5,6 Others 4,6 9,9
2004 62 22,4 11,2 4,4
Table: Market shares on the Czech electric energy generation market (in %) 2002 2003 2005 ČEZ 70.9 73.4 73 Elektrárny Opatovice, a.s. 2.8 2.7 2.6 Dalkia Česká republika, 2.8 2.4 2.4 a.s. Sokolovská uhelná, a.s. 4.5 4.3 4.3 ECK Generating, s.r.o. 2.2 2.0 1.9 Energotrans, a.s. 1.7 1.7 1.7 Others 15.1 13.5 14.1 Oil: Unipetrol, after having been owned by the national fertilizer producer Agrofert, is now again owned by the state. Its subsidiary Ceska rafinerska a.s. operates the two most important oil refineries.
Coal: All former State owned coal production companies, after having been transformed into joint stock companies, are now hold at more than 50 % by the National Property Fund. It is planned to privatize them. •
Extent of competition in power generation and energy retail
Authorization procedure for plants above 30 MW, responsible authority: Ministry of Industry and Trade. •
Structure – extent of vertical integration of generation/ transmission/ distribution/ retail
Electricity: Czech Transmission System Operator (CEPS a.s.) is since 1999 responsible for development, management, operation and maintenance of the transport network. It was statutorily unbundled from CEZ. It controls the operation of interconnections, provides real time load dispatching services and is responsible for ancillary services. It is a subsidiary of CEZ. Eight regional joint stock companies carry out electricity distribution to final consumers. These companies are partly owned by foreign companies, partly (34 to 59 %) by CEZ. Figure: Distribution and transmission of electricity in Czech Republic, (source, ERO, 2005)
Planned exchanges over the transmission system included in the Czech Republic’s balance of control energy Actual exchanges over the transmission system included in the Czech Republic’s balance of control energy Actual exchanges over the 110 kV and lower voltage lines not included in the Czech Republic’s balance of control energy
Natural gas: Transgas, owned at 97% by RWE Gas, is responsible for transport, transit, and sale of natural gas. Gasexport, a subsidiary of the Russian Gazprom, supplies gas to Transgas. Besides contracts with Russia, there exist long term contracts with Norway and Germany. Eight regional companies take care of the distribution. In 2003, Transgas´s import monopoly is to expire; between 2005 and 2008 the Czech gas market is to be gradually opened to meet the requirements of the Gas Directive.
Figure : Gas Transport Pipelines and Facilities (source: Energy Policies of IEA Countries –
Czech Republic -- 2005 Review) SECTION 3: ENERGY POLICY FRAMEWORK •
Existence of an explicit energy policy framework (e.g a recent White Paper) and key policies (e.g privatisation, liberalisation, rural electrification plan etc) or not – what role is envisaged for sustainable energy?
In 2004, the Government of Czech Republic have defined four main goals, within the State Energy Conception of the Czech Republic (approved by Gov. Decree No. 211 of March 10, 2004). The Conception elaborated by the Ministry of Industry and Trade is one of the basic components of the economic policy of the state.
The main categories of this policy framework are: maximising energy efficiency, effective primary energy sources consumption, maximizing environmental friendliness, completing the transformation and liberalization of the energy sector. Each goal requires various policies which are defined below.
The Czech Republic is essentially meeting the commitments and requirements arising from the accession negotiations in the energy sector. The gas and electricity sectors are generally prepared for the competitive internal energy market through the privatization of major players in the gas market, the restructuring of electricity utilities and the broadly cost-reflective electricity prices. A. Policies and Legislation on Energy Efficiency: Czech Republic still consumes more primary energy sources and electricity than objectively necessary (the consumed energy creates little value added). In spite of achieved improvements the energy and electricity intensity of GDP creation in the Czech Republic are nearly double those of EU countries. It is mainly transport, industry and the building industry that show high energy intensity. The measures taken to fulfil this policy are:
Act No. 458/2000 Coll. the Energy Act, approved in 2001 in order to establish a new regulatory regime and providing for the liberalization of the electricity and natural gas markets and harmonising the market rules for these forms of energy with EU rules.
Act No. 406/2000 Coll. on Energy Management, approved in 2001, in order to apply the provisions of EU Directive No. 2002/91/EC on the energy performance of buildings and thus initiating improvements in their energy consumption parameters and reductions in their energy demands.
The National Programme for Economical Energy Management and Use of Renewable and Secondary Energy Sources, approved in 2004, in order to maximise the efficiency of energy utilisation in accordance with the requirement of the State Energy Policy
Legislation promoting the production of electricity and heat from renewable energy sources and the cogeneration of electricity and heat
B. Policies and Legislation on Effective Primary Energy Sources Consumption: Czech Republic government diversifies imported energy sources to provide energy security and sustainability. Suppliers of imported liquid and gas fuels have been diversified since 1996. The overall extent of the Czech Republic’s dependence on energy imports is quite favourable for the time being (approx. 32% of energy consumption, year 2004), yet its structure is unbalanced. Oil imports from Russia (84 % of the oil demand in 2001) via the "Friendship"-Pipeline have been reduced since 1996 from 140,000 bl/day to 100,000 bl/day. A new pipeline from Germany supplies the difference. Three refineries (Litvinov, Kralupy, Pardubice) have a total capacity of 198,000 bl/day.
Since 1997, 3 Gm3 per year are imported from Norway to reduce the country's dependence on Russia. Natural Gas Imports doubled since 1990 to 9.5 Gm3. The growing share of natural gas in direct applications and district heating has reduced the importance of brown coal, which still dominates in power generation. The measures taken to fulfil this policy are:
Act No. 458/2000 Coll. (the Energy Act),
Act No. 406/2000 Coll. on energy management,
Legislation promoting the production of electricity and heat from renewable sources and the cogeneration of electricity and heat (Decree of the Ministry of Industry and Trade No. 539/2002, Price decisions of the Energy Regulatory Office),
Using the competencies of the Ministry of Industry and Trade in the sphere of import regulation of electricity and gas pursuant to Act No. 458/2000 Coll.,
Authorisation for the construction of electricity and heat generating plants in accordance with Act No. 458/2000 Coll.,
Act No. 189/1999 Coll. on emergency oil reserves,
Act No. 240/2000 Coll. on crisis management,
Act No. 241/2000 Coll. on emergency measures.
C. Policies and Legislation on Maximizing Environmental Friendliness: At the present time the Czech Republic has no difficulties in maintaining its limits of emission volumes of SO2 and NOx until 2010. What remains a problem is the VOC emission limit and specific emissions of CO2 and NOx, (per inhabitant or per GDP), which are still at a higher level than in EU countries. The measures taken to fulfil this policy are:
Act No. 458/2000 Coll., (the Energy Act),
Act No. 406/2000 Coll. on Energy Management,
The National Programme for Economical Energy Management and Use of Renewable and Secondary Energy Sources,
Legislation of the promotion electricity and heat produced from renewable sources and cogeneration of electricity and heat (Decree of the Ministry of Industry and Trade No. 539/2002, Price decisions of the Energy Regulatory Office).
The Air Protection Act No. 86/2002 Coll.,
The Integrated Prevention Act No. 76/2002 Coll.,
Government Regulation No. 350/2002 Coll. setting forth the emission limits and conditions and the way of monitoring, evaluating and controlling the air quality,
Government Regulation No. 351/2002 setting forth binding emission limits for some air pollutants and the preparation methods of emission audits,
Government Regulation No. 352/2002 Coll. setting forth the emission limits and other conditions for operating stationary combustion sources of air pollution,
D. Policies and Legislation on Completing the Transformation and Liberalization of the Energy Sector This policy aims to fulfil the priorities of safety and sustainable development, a requirement for ensuring full adaptation of the Czech Republic to the market model of energy sector pursued within the EU, as well as economic and social requirements. The process of transformation of Czech Republic energy sector proceeded throughout the 1990s and was the main priority for all state energy policies so far. The transformation of energy sector has advanced considerably so far. The measures taken to fulfil this policy are:
Act No. 458/2000 Coll. (the Energy Act),
Damping programmes for coal, ore and uranium mining.
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Any current energy policy debates/developing legislation – e.g. on security of supply; energy market reform; incentives for renewable energy etc
1. Higher demand for electricity in Europe is caused by an inflow of foreign investment and positive economic development in Central Europe, including the Czech Republic. Thus Czech power producer CEZ is shifting a major part of its exports to Slovakia and Hungary and away from Western Europe, where it had previously focused its efforts. However, facilities with an installed output of 20,000 MW -- nearly 30 percent of the standing capacity -- will have to be closed down in the Czech Republic, Slovakia, Poland and Hungary by 2020 for environmental reasons. CEZ is raising and accelerating investment in the renewal of energy sources but effects will be visible after 2010. 2. Co-firing of biomass with fossil fuels was also an issue that was much discussed during the preparation of the renewable energy law. The aim of supporting co-firing of
biomass is, according to the authors of the law, the substitution of coal, reduction of emissions, etc. as well as dividing the markets for small decentralized biomass plants and large sources for co-firing. •
Any specific policies or programmes to promote sustainable energy
In order to create supporting mechanisms for electricity generation from RES, Czech Government has taken the following measures: 1. The Energy Act: In 2003, the key piece of legislation, the Energy Act, which defines the environment for business in the energy industries and conditions for regulation in the energy sector, so as to comply with the acquis communautaire, came into force. 2. Law on Promotion of Production of Electricity from Renewable Energy Sources: Within the context of the Energy Act, The parliament of Czech Republic approved the law, Support for Electricity Generation from Renewable Energy Sources, supporting the production electricity from renewable energy sources in 2005. The law came into force in August 2005 together with the EU Directive 2001/77/EC in Czech National legislation. Operators of regional grid systems and of the transmission system are obliged to purchase all electricity from RES that is subject to promotion. According to the programme, producers of electricity from RES can benefit from two support schemes: Fixed feed in tariff and Green Bonus tariff. 3. Promotion of the Production of Electricity from Combined Heat and Power: Producers of Electricity in Combined Heat and Power Plants receive an additive to the electricity price depending on the installed capacity of the plant and the fuel. 4. State Energy Conception of the Czech Republic: (approved by Gov. Decree No. 211 of March 10, 2004). The Conception elaborated by the Ministry of Industry and Trade is one of the basic components of the economic policy of the state. It represents the vision of the Czech State on creating conditions for reliable and long-term safe energy supply at acceptable price as well as for efficient energy use. The Concept contains four main targets concerned with fulfilment of the basic priorities in more specific form. The targets are on : maximizing of energy effectiveness, the amount and structure of the consumption of primary energy sources, Provision for the maximum environmental soundness; Transformation and liberalization of the energy management. 5. The National Energy Policy: The National Energy Policy was approved by government decision No. 50 of 12 January 2000. This basic document indicates the targets in the area of energy management according to the needs of economic and social development, including environmental protection. The long-term strategic targets of energy policy include a gradual reduction of the volumes of energy and raw materials needed by the Czech economy to meet the level of advanced industrial countries. The new sub-objectives up to 2020 on the demand side are to remove price subsidies and distortions, to create competitive markets for electricity and gas, to achieve freedom of choice for consumers, and to ensure energy efficiency enhancement.
6. The State Environmental Fund (SEF): SEF is supervised by the Minister of the Environment, offers some investment support for non profit enterprises interested in implementing various projects concerning different fields of environmental protection including renewable energy sources utilization. 7. Annual State Support Programme for Energy Saving and the Use of Renewable Energy Sources: The Government adopted the first Annual State Support Programme for Energy Saving and the Use of Renewable Energy Sources, based on the National Programme for Economic Energy Management and Use of Renewables. The first Annual Programme establishes aims and benchmarks for subsequent projects which are managed by various Ministries, depending on sectoral responsibility. The Czech Energy Agency manages projects on behalf of the Ministry of Trade and Industry. 8. The Renewable Act: At the beginning of this year new legislative provision was adopted by Czech government for better and long term support of renewable electricity (Act No. 180/2005). The Renewable Act should ensure an 8 % share of renewable energy in the Czech Republic’s gross domestic electricity consumption by 2010, a target laid down in the Czech Republic’s accession treaty with the EU. The new act transposes the 2001/77/EC directive into Czech legal system. The adopted support scheme provides 15year guarantee of fixed feed-in tariffs, differentiated by technology
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Any major energy network or sustainable energy studies available
National energy efficiency study: The National Energy Efficiency Study has developed specific policies for the promotion of end use energy efficiency and renewables. These are described in two Action Plans. It contains detailed information on options and measures, potentials, barriers and policy instruments for energy efficiency and renewables. In addition, two separate Action Plans have been published: The Energy Efficiency Action Plan focuses on promotion of energy efficiency in end-use; and The Renewable Energy Action Plan deals with policy on promotion of renewable energy production. • Role of government in energy policy – which departments are involved? The discharge of state administration in Energy Sector is vested mainly in the Ministry of Industry and Trade, the Energy Regulatory Office, and the State Energy Inspectorate. However, other actors are also involved. •
The Ministry of Trade and Industry: the Ministry is the authority responsible for developing the national energy policy, observing international commitments and treaties, and granting the State’s consent to the building of new capacities in the electricity industry and the heat supply industry, and the State’s consent to the building of direct lines and selected gas facilities in the gas industry, in accordance with the conditions laid down in a special part of the law.
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Energy Regulatory Office: The Energy Regulatory Office (ERO) was set up in 2001 as another central body of state administration, which has the main tasks of
Support of economic competition;
Support of the use of renewable and secondary energy sources;
Protection of consumers´ interests in the areas of energy sector where competition is not feasible.
The State Energy Inspection: SEI of the Czech Republic is a state administration body acting on conditions and state supervision in the power industry branches and on amending selected acts on energy economy and on the Czech government’s powers concerning prices. Based on Art. 92 of Act. No. 458/2000 Coll., the CR-SEI is an administrative body subordinated to the Ministry of Industry and Trade of the Czech Republic. The CR-SEI is a part of the government. The CR-SEI is a budgetary organization and its Central inspectorate is in Prague.
National office of energy inspection: The National office of energy inspection is responsible for the implementation of requirements of the Energy Act and the Energy Management Act (implemented on Jan. 1st, 2001).
State Office for Nuclear Safety: The SÚJB is a governmental regulatory body responsible for governmental administration and supervision in the fields of uses of nuclear energy and radiation and of radiation protection.
Any government (or government funded) agencies with a specific role in sustainable energy and/or environmental protection (with an energy role)
Czech Energy Agency: The Czech Energy Agency is a subsidized organization established by the Decision of the Minister of Industry and Trade in 1995, with the mission of: preparation, realization and consistent evaluation of the State Programs for financial subsidies for implementation of the energy savings equipments and reduction of the negative environmental impacts which are generated during energy processes
initiating, supporting and realizing activities leading to energy savings and reductions of the negative environmental impacts of the consumption and transformation in all types of energy
State Environmental Fund: State Environmental Fund of the Czech Republic was funded in 1991 as an economic instrument which aims to:
Fulfill the obligations arising from the international conventions on environmental protection; Fulfill the bonds of EU membership; Implement the National Environmental Policy
Czech Environmental Institute (CEI): CEI is one of the grant service organizations of the Ministry of the Environment of the Czech Republic. The task of the CEI is to provide information and expert support in the field of environmental protection for local government, which involves carrying out research projects, at both the national and international level, aimed at environmental protection. Technology Centre of the Academy of Sciences of the Czech Republic TCASCR: TCASCR was involved in The Organizations for the Promotion of Energy Technologies (OPET-CR) activities, developed during recent years by the Ministry of Environment, to promote the use of renewable energy technologies throughout the Czech Republic. Activities are aimed at individuals, local authorities, SMEs, consumers and producers. TCASCR was also involved in "Energy, Environment and Sustainable Development", one of the four thematic programmes of the Fifth (EC) RTD Framework Programme (1998-2002). The State Energy Inspection: SEI of the Czech Republic is a state administration body acting on conditions and state supervision in the power industry branches and on amending selected acts on energy economy and on the Czech government’s powers concerning prices. Based on Art. 92 of Act. No. 458/2000 Coll., the CR-SEI is an administrative body subordinated to the Ministry of Industry and Trade of the Czech Republic. The CR-SEI is a part of the government. The CR-SEI is a budgetary organization and its Central inspectorate is in Prague. • Any energy planning procedure in place During 1997 – 2002 the Government of the Czech Republic adopted or discussed wide range of sectoral strategic policies that on the basis of large, some times compromised, consensus incorporated the principles of sustainable development.
State Energy Policy of January 2000,
State Programme of the Support for the Use of Renewable Resources of Energy adopted on annually basis,
State Programme for Energy Savings of 2000,
SECTION 4: ENERGY REGULATION •
Is there an energy or utility regulator? When was it established?
The regulator is the Energy Regulation Office (ERO) which was established in 2001. Its establishment was in compliance with provision of energy law. Financed by the State Budget, its main tasks are to grant licenses, regulate prices, and to resolve disputes
related to access to transmission or distribution networks. It is responsible for price setting. The ERO´s organizational structure is composed of a Regulation Section, a Licensing Department, a Strategy Department and the ERO Bureau Department. •
Degree of independence of the regulator from government (legal structure, who appoints the regulator and board)
The Director of the Regulation Section which is also the Vice-Chairman of the Energy Regulatory Office is being appointed for a term of five years (and dismissed) by the Government. The Energy Regulatory Office submits its Annual Report for approval to the Government and Parliament’s House of Deputies through the Ministry of Industry and Trade. •
Regulatory framework – legislation, duties, powers (any references to environment, sustainable energy )
The discharge of state administration in Energy Sector is vested mainly in the Ministry of Industry and Trade, the Energy Regulatory Office, and the State Energy Inspectorate. However, other actors are also involved. The Ministry of Industry and Trade: the Ministry is the authority responsible for developing the national energy policy, observing international commitments and treaties, and granting the State’s consent to the building of new capacities in the electricity industry and the heat supply industry, and the State’s consent to the building of direct lines and selected gas facilities in the gas industry, in accordance with the conditions laid down in a special part of the law. Ministry of Industry and Trade carries out the competencies in the energy sector stipulated in the law. In addition, the Ministry of Industry and Trade is a state administration authority to be, in case of need, responsible for tendering processes for the construction of new energy capacities. Energy Regulatory Office: The Office’s main tasks include market regulation with a view to substituting market mechanisms in the areas of energy industries in which competition is not feasible and in which there exists danger of abuse of a dominant position. The Energy Regulatory Office protects consumers against energy utilities’ efforts to increase prices; oversees the observance of the conditions for these utilities’ business; and, not least, creates the preconditions for the quality and reliability of energy supplies to final customers. The Energy Regulatory Office is involved in the drafting of laws having a bearing on the energy sector. As part of its responsibilities, the Energy Regulatory Office is authorised to issue implementing regulations (primarily public notices and price decisions). The State Energy Inspectorate:SEI is the inspection and penalising authority. Where system operators or other obligated entities default on the provisions of the Energy Act
which provide for the obligation of functional and accounting unbundling, such conduct is regarded as an administrative delict and as such can be penalised by a fine imposed by the State Energy Inspectorate. •
Regulator’s roles – key tasks (e.g. price controls, promoting competition etc) , actions to date, any action/role in the sustainable energy field)
Energy Regulatory Office: Besides the tasks mentioned above, The Energy Regulatory Office also issues the Electricity Market Rules, the principles of pricing the activities of the Electricity Market Operator, and the Gas Market Rules. The Energy Regulatory Office is authorised to approve the Commercial Terms and conditions of the Electricity Market Operator; the Rules of the Electricity Transmission System Operation (Grid Code); the Rules of the Electricity Distribution System Operation; the Rules of the Gas Transmission System Operation (Grid Code); and the Rules of the Gas Distribution System Operation. The ERO’s powers also include the opportunity to present suggestions to the State Energy Inspectorate to check the meeting of the obligations under the Energy Act and, as applicable, to propose the imposition of penalties, and to notify the Office for the Protection of Competition of cases of abuse of the dominant position on the market. The Energy Regulatory Office decides on the award, change, or revocation of licences for business in the energy industries and for the Electricity Market Operator’s activities; on imposing the obligation of supplies over and beyond licences; on imposing the obligation to provide, in urgent cases, energy facilities for meeting the obligation of supplies over and beyond licences; on price controls; etc. It is also within the ERO’s competencies to adjudicate disputes, for example, disputes between licence holders and their customers or those concerning failure to reach agreement on regulated access to the transmission or distribution system. •
Role of government departments in energy regulation (both where a regulator exists and where there is no regulator)
Ministry of Industry and Trade: According to the Energy Act in the Czech Republic, the electricity market shall be based on regulated access to the transmission system and distribution systems and that electricity generating capacities may only be built subject to the State’s authorization, on the granting of which the Ministry of Industry and Trade shall decide. The Ministry is the authority to grant the State’s authorizations for the building of direct lines. •
Have any regulatory barriers to sustainable energy been identified and if so what are they?
None identified.
REFENCES: MPO, Ministry of Industry and Trade, 2004, State Energy Policy of The Czech Republic, Prague, http://www.mpo.cz/dokument12265.html MPO, Ministry of Industry and Trade, 2004, State Energy Policy of The Czech Republic, Prague, Prague Daily Monitor, The Czech Republic's English-language electronic news daily, 26 July2006,(URL:http://www.praguemonitor.com/ctk/?story_id=w37461i20060726;story= CEZ-to-shift-exports-from-Western-Europe-to-Slovakia-Hungary) European Regulators Group for Electricity and Gas, 2005, The Czech Republic’s National Report on the Electricity and Gas Industries for 2004, The Czech Association for RES utilization, http://biom.cz/index.shtml?x=823784 (consulted July, 2006) Josef Bubeník, 2005, End-use efficiency in buildings and Energy Policy in Czech Republic-Country Report, Czech Energy Agency Váňa, J. Připravovaná podpora využití OZE v ČR (The Support for REX Prepared in the CR) CZ BIOM, http://www.biom.cz/index.shtml?x=131870 IEA, 2005, Energy Policies of IEA Countries – Czech Republic -- 2005 Review, ERO, 2005, The Czech Republic’s National Report on the Electricity and Gas Industries For 2004, Energy Regulatory Office, 2005 CR SEF - State Environment Fund of the Czech Republic, Energy Legislation and Policy, Czech Republic www.sfzp.cz Wees, M.T. 1999, National energy efficiency study: the Czech Republic, ECL Beleiddtudies Hlavacek, J., 2002, Country Report: Czech Republic, Regional Workshop on Capacity-Building in Governance and Public Administration for Sustainable Development, Ministry of Environment of the Czech Republic Thessaloniki, 28-31 August 2002 Czech statistical office, accessible from: www.czso.cz State Environmental Fund of the Czech Republic, http://www.sfzp.cz/en/ Austrian Energy Agency, http: www.eva.ac.at
SECTION 1: ENERGY PROVISION
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Main fuel sources for direct use and power generation
Figure 1: TPES in Czech Republic. (44 MToe in total) (IEA, 2003) •
Degree of reliance on imported energy
Total imported energy from various fuel sources accounted for 46.2 % of TPES in Czech Republic. A summary of the energy balance in 2004-2005 can be found below: Electricity Maximum net generating capacity (MW) Total net electricity production (TWh) Import from foreign countries (TWh) Exports to foreign countries (TWh) Total electricity demand (TWh)
2004 16.387 77.9 9.8 25.5 61.5
2005 17.412 76.2 12.4 25 62.7
Figure: Electricity Balance (source: Energy Regulatory Office, 2005) •
Extent of connection to electricity network (households and businesses; rural and urban)
Eight regional joint stock companies carry out electricity distribution to final consumers. These companies are partly owned by foreign companies, partly (34 to 59 %) by CEZ The Czech electric energy market has been gradually opening since 2002. Since 1 January 2005 all final customers, with the exception of households, have been eligible customers with the right to choose their electricity supplier. In 2005 the share of all eligible customers’ electricity consumption accounts for approximately 74% of the total annual net electricity consumption in the Czech Republic. In 2005, all end users were expected to become eligible customers with the right to choose their supplier by January 2006. As regards electricity exports/imports, and, as the case may be, transit, the quantity of traded values is limited by the limited capacities of the lines on cross-border interconnections. The size of free cross-border capacities depends on the physical electricity flows themselves and also on the commercial load at the respective border interconnection. The method of free capacity allocation is based on ETSO’s (European Transmission System Operators) methodology based on the principle of explicit auctions. •
Any capacity concerns (power generation an/or transmission/distribution)
On 1 January 2005 the total installed capacity of power stations in the Czech Republic was 17,434 MW, with approximately 58% of the power stations’ output connected directly to the transmission system and 42% to the distribution system. Power generation: Currently, there is no concern. But due to compliance with EU regulations, thermal power generation will have to be replaced by clean technologies.
Figure: Electricity generation vs consumption in Czech Republic, (Bubeník, 2005) Distribution and Transmission: There currently exist no bottlenecks in the transmission part of the Czech grid – the grid is capable of transmitting the required volumes of electricity; in general, there is therefore no need to adopt any measures vis-à-vis the electricity market participants
•
Potential for renewable energy, energy efficiency and co-generation (i.e. any authoritative assessments)
With an excess capacity of almost 50%, the Czech Republic is the second largest exporter of electricity in Europe (13 TWh in 2002, estimate of 18 TWh in 2003. Coal is still dominating the electricity production. Energy Efficiency: Energy Intensity in Czech Republic is (2000-figures) is 1.6 fold of EU (5-9 MJ per GDP at purchase power parity) average and 2.2 fold of Austrian average (5 MJ per GDP at purchase power parity in 2001) It is a result of energy-intensive industries, centralized structures in the utilities, and a bulk of not yet realized saving potentials on the demand side (panel buildings, electricity production, ...). It has been decreasing by some 25 % in the past 12 years. Most of the energy consumption in the residential and tertiary sector is used for heating. The housing stock is poorly insulated; substantial gains are to be realized in this sector. Industry is still very dependent on coal. A switch to less carbon intensive fuels like natural gas and a structural change would provide lower emissions of CO2 and lower energy intensity. (Austrian Energy Agency) Co-generation: %75 of Czech Republic’s installed electricity production capacity of 15,443 MW is from thermal electricity generation, 41% of which is from CHP. (2003) Renewable energy:
Figure 1: Potentials for renewable energy production in Czech Republic, (source: Bubeník, 2005) Table 1: Production of renewable electricity from different sources with proposed development at 2010 (source: CZ BIOM) ELECTRICITY FROM RES
Electricity from biomass in total Electricity from Co-combustion From pulp and paper industry Clear biomass combustion Biogas plant (excluded sewage and landfill gas) Wind energy Small hydro Large hydro Geothermal Photovoltaic Total RES
2004 (GWH)
2010 (GWH) (ROUGHLY ESTIMATED)
560
2 200
(305) (200) (28) (27)
(600) (220) (1 180) (200)
20 740 1 246 0 0 2 536 (4.2 %)
930 1 120 1 200 15 15 5 480 (8 %)
Hydropower: The technical hydropower potential of Czech rivers amounts to 3.38 - 3.98 TWh/year, 1.57 TWh/year of which is small hydro. (source: IEA, 2003) Table 2: Hydropower generation in Czech Republic (2003) POTENTIAL Theoretical Usable of which small hydro In use of which small hydro Not used yet (only small hydro) Repowering
ANNUAL GENERATION MWH 13 2 280 1 115 1 850 750 410 40
CAPACITY (MW) 100 1 134 398 1 004 268 130 15
NUMBER OF HYDROPOWER PLANTS 1 618 1 610 1 188 1 180 430 200
Biomass: Table 3: Energy potential of biomass from different sources in CZ (source: CZ BIOM, 2004) SOURCE OF BIOMASS Forest biomass Biomass from agriculture Biogas
TECHNICAL POTENTIAL (PJ) 77,6 275 33
ACCESSIBLE POTENTIAL (PJ) 44,8 136 16
Table 4: Energy potential of biomass (source: CZ BIOM, 2004) TYPE OF POTENTIAL Theoretical Technical Usable Available Economic (year 2004)
BIOMASS PRODUCTION (1000 TONNES) 27 385 18 348 13 693 9 037 2 738
ENERGY VALUE (PJ) 411 275 205 136 41
Table 5: Energy production from biomass potential for the CR in 2010, PJ (source: CZ BIOM) Timber And Waste Timber Straw Rape straw Energy plants Total (50% CHPs, 50% heat power stations) Potential for electricity production 30% will be used in 2010
33.1 6.0 9.7 63.0 111.8 55.9 16.8
Wind Power: Gross theoretical potential: 104 TWh/year, Gross electric generation : 4 GWh (EIA, 2003) Several areas with wind speeds above 9 m/s in 50 m above ground level do exist. 23 projects installed between 1990 and 1995 (total installed power 8.16 MW). 17 of them (6.825 MW installed power) are still (partly) operational. Solar energy: About 100,000 m2 of solar thermal collectors with an estimated production of 0.144 PJ are currently in operation. There is a joint Czech-Austrian project on the development of solar thermal energy operated by Arsenal Research. Two "large" on-grid photovoltaic systems are currently reported being in operation, one operated and owned by CEZ (10 kWp) and the second in hotel Panorama in Prague (6 kWp). (AEA, 2003)
Geothermal Energy: The total theoretical potential: 4,641 MW. Exploitable potential: 2,500 to 3,000 MW, corresponding to an installed heat potential of 3,750 to 4,500 MW. No electricity generation reported (EIA, 2003)
SECTION 2: ENERGY MARKET •
Ownership (state/municipality/private/mixture) of electricity and gas utilities and other sources of energy
Electricity: CEZ a.s. is the main electricity production company; 67,5% owned by the National Property Fund. It produces about 70% of the country's electricity in 29 power plants (9 thermal, 2 nuclear, 16 hydro, 1 wind and solar respectively). The rest of the electricity is produced by independent power producers, mainly in combined heat and power plants. Table: Electric energy supplies to eligible customers (in %) 2002 2003 ČEZ 77 63 Elektrárny Opatovice, a.s. 14,9 21,5 PRE 3,5 5,6 Others 4,6 9,9
2004 62 22,4 11,2 4,4
Table: Market shares on the Czech electric energy generation market (in %) 2002 2003 2005 ČEZ 70.9 73.4 73 Elektrárny Opatovice, a.s. 2.8 2.7 2.6 Dalkia Česká republika, 2.8 2.4 2.4 a.s. Sokolovská uhelná, a.s. 4.5 4.3 4.3 ECK Generating, s.r.o. 2.2 2.0 1.9 Energotrans, a.s. 1.7 1.7 1.7 Others 15.1 13.5 14.1 Oil: Unipetrol, after having been owned by the national fertilizer producer Agrofert, is now again owned by the state. Its subsidiary Ceska rafinerska a.s. operates the two most important oil refineries.
Coal: All former State owned coal production companies, after having been transformed into joint stock companies, are now hold at more than 50 % by the National Property Fund. It is planned to privatize them. •
Extent of competition in power generation and energy retail
Authorization procedure for plants above 30 MW, responsible authority: Ministry of Industry and Trade. •
Structure – extent of vertical integration of generation/ transmission/ distribution/ retail
Electricity: Czech Transmission System Operator (CEPS a.s.) is since 1999 responsible for development, management, operation and maintenance of the transport network. It was statutorily unbundled from CEZ. It controls the operation of interconnections, provides real time load dispatching services and is responsible for ancillary services. It is a subsidiary of CEZ. Eight regional joint stock companies carry out electricity distribution to final consumers. These companies are partly owned by foreign companies, partly (34 to 59 %) by CEZ. Figure: Distribution and transmission of electricity in Czech Republic, (source, ERO, 2005)
Planned exchanges over the transmission system included in the Czech Republic’s balance of control energy Actual exchanges over the transmission system included in the Czech Republic’s balance of control energy Actual exchanges over the 110 kV and lower voltage lines not included in the Czech Republic’s balance of control energy
Natural gas: Transgas, owned at 97% by RWE Gas, is responsible for transport, transit, and sale of natural gas. Gasexport, a subsidiary of the Russian Gazprom, supplies gas to Transgas. Besides contracts with Russia, there exist long term contracts with Norway and Germany. Eight regional companies take care of the distribution. In 2003, Transgas´s import monopoly is to expire; between 2005 and 2008 the Czech gas market is to be gradually opened to meet the requirements of the Gas Directive.
Figure : Gas Transport Pipelines and Facilities (source: Energy Policies of IEA Countries –
Czech Republic -- 2005 Review) SECTION 3: ENERGY POLICY FRAMEWORK •
Existence of an explicit energy policy framework (e.g a recent White Paper) and key policies (e.g privatisation, liberalisation, rural electrification plan etc) or not – what role is envisaged for sustainable energy?
In 2004, the Government of Czech Republic have defined four main goals, within the State Energy Conception of the Czech Republic (approved by Gov. Decree No. 211 of March 10, 2004). The Conception elaborated by the Ministry of Industry and Trade is one of the basic components of the economic policy of the state.
The main categories of this policy framework are: maximising energy efficiency, effective primary energy sources consumption, maximizing environmental friendliness, completing the transformation and liberalization of the energy sector. Each goal requires various policies which are defined below.
The Czech Republic is essentially meeting the commitments and requirements arising from the accession negotiations in the energy sector. The gas and electricity sectors are generally prepared for the competitive internal energy market through the privatization of major players in the gas market, the restructuring of electricity utilities and the broadly cost-reflective electricity prices. A. Policies and Legislation on Energy Efficiency: Czech Republic still consumes more primary energy sources and electricity than objectively necessary (the consumed energy creates little value added). In spite of achieved improvements the energy and electricity intensity of GDP creation in the Czech Republic are nearly double those of EU countries. It is mainly transport, industry and the building industry that show high energy intensity. The measures taken to fulfil this policy are:
Act No. 458/2000 Coll. the Energy Act, approved in 2001 in order to establish a new regulatory regime and providing for the liberalization of the electricity and natural gas markets and harmonising the market rules for these forms of energy with EU rules.
Act No. 406/2000 Coll. on Energy Management, approved in 2001, in order to apply the provisions of EU Directive No. 2002/91/EC on the energy performance of buildings and thus initiating improvements in their energy consumption parameters and reductions in their energy demands.
The National Programme for Economical Energy Management and Use of Renewable and Secondary Energy Sources, approved in 2004, in order to maximise the efficiency of energy utilisation in accordance with the requirement of the State Energy Policy
Legislation promoting the production of electricity and heat from renewable energy sources and the cogeneration of electricity and heat
B. Policies and Legislation on Effective Primary Energy Sources Consumption: Czech Republic government diversifies imported energy sources to provide energy security and sustainability. Suppliers of imported liquid and gas fuels have been diversified since 1996. The overall extent of the Czech Republic’s dependence on energy imports is quite favourable for the time being (approx. 32% of energy consumption, year 2004), yet its structure is unbalanced. Oil imports from Russia (84 % of the oil demand in 2001) via the "Friendship"-Pipeline have been reduced since 1996 from 140,000 bl/day to 100,000 bl/day. A new pipeline from Germany supplies the difference. Three refineries (Litvinov, Kralupy, Pardubice) have a total capacity of 198,000 bl/day.
Since 1997, 3 Gm3 per year are imported from Norway to reduce the country's dependence on Russia. Natural Gas Imports doubled since 1990 to 9.5 Gm3. The growing share of natural gas in direct applications and district heating has reduced the importance of brown coal, which still dominates in power generation. The measures taken to fulfil this policy are:
Act No. 458/2000 Coll. (the Energy Act),
Act No. 406/2000 Coll. on energy management,
Legislation promoting the production of electricity and heat from renewable sources and the cogeneration of electricity and heat (Decree of the Ministry of Industry and Trade No. 539/2002, Price decisions of the Energy Regulatory Office),
Using the competencies of the Ministry of Industry and Trade in the sphere of import regulation of electricity and gas pursuant to Act No. 458/2000 Coll.,
Authorisation for the construction of electricity and heat generating plants in accordance with Act No. 458/2000 Coll.,
Act No. 189/1999 Coll. on emergency oil reserves,
Act No. 240/2000 Coll. on crisis management,
Act No. 241/2000 Coll. on emergency measures.
C. Policies and Legislation on Maximizing Environmental Friendliness: At the present time the Czech Republic has no difficulties in maintaining its limits of emission volumes of SO2 and NOx until 2010. What remains a problem is the VOC emission limit and specific emissions of CO2 and NOx, (per inhabitant or per GDP), which are still at a higher level than in EU countries. The measures taken to fulfil this policy are:
Act No. 458/2000 Coll., (the Energy Act),
Act No. 406/2000 Coll. on Energy Management,
The National Programme for Economical Energy Management and Use of Renewable and Secondary Energy Sources,
Legislation of the promotion electricity and heat produced from renewable sources and cogeneration of electricity and heat (Decree of the Ministry of Industry and Trade No. 539/2002, Price decisions of the Energy Regulatory Office).
The Air Protection Act No. 86/2002 Coll.,
The Integrated Prevention Act No. 76/2002 Coll.,
Government Regulation No. 350/2002 Coll. setting forth the emission limits and conditions and the way of monitoring, evaluating and controlling the air quality,
Government Regulation No. 351/2002 setting forth binding emission limits for some air pollutants and the preparation methods of emission audits,
Government Regulation No. 352/2002 Coll. setting forth the emission limits and other conditions for operating stationary combustion sources of air pollution,
D. Policies and Legislation on Completing the Transformation and Liberalization of the Energy Sector This policy aims to fulfil the priorities of safety and sustainable development, a requirement for ensuring full adaptation of the Czech Republic to the market model of energy sector pursued within the EU, as well as economic and social requirements. The process of transformation of Czech Republic energy sector proceeded throughout the 1990s and was the main priority for all state energy policies so far. The transformation of energy sector has advanced considerably so far. The measures taken to fulfil this policy are:
Act No. 458/2000 Coll. (the Energy Act),
Damping programmes for coal, ore and uranium mining.
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Any current energy policy debates/developing legislation – e.g. on security of supply; energy market reform; incentives for renewable energy etc
1. Higher demand for electricity in Europe is caused by an inflow of foreign investment and positive economic development in Central Europe, including the Czech Republic. Thus Czech power producer CEZ is shifting a major part of its exports to Slovakia and Hungary and away from Western Europe, where it had previously focused its efforts. However, facilities with an installed output of 20,000 MW -- nearly 30 percent of the standing capacity -- will have to be closed down in the Czech Republic, Slovakia, Poland and Hungary by 2020 for environmental reasons. CEZ is raising and accelerating investment in the renewal of energy sources but effects will be visible after 2010. 2. Co-firing of biomass with fossil fuels was also an issue that was much discussed during the preparation of the renewable energy law. The aim of supporting co-firing of
biomass is, according to the authors of the law, the substitution of coal, reduction of emissions, etc. as well as dividing the markets for small decentralized biomass plants and large sources for co-firing. •
Any specific policies or programmes to promote sustainable energy
In order to create supporting mechanisms for electricity generation from RES, Czech Government has taken the following measures: 1. The Energy Act: In 2003, the key piece of legislation, the Energy Act, which defines the environment for business in the energy industries and conditions for regulation in the energy sector, so as to comply with the acquis communautaire, came into force. 2. Law on Promotion of Production of Electricity from Renewable Energy Sources: Within the context of the Energy Act, The parliament of Czech Republic approved the law, Support for Electricity Generation from Renewable Energy Sources, supporting the production electricity from renewable energy sources in 2005. The law came into force in August 2005 together with the EU Directive 2001/77/EC in Czech National legislation. Operators of regional grid systems and of the transmission system are obliged to purchase all electricity from RES that is subject to promotion. According to the programme, producers of electricity from RES can benefit from two support schemes: Fixed feed in tariff and Green Bonus tariff. 3. Promotion of the Production of Electricity from Combined Heat and Power: Producers of Electricity in Combined Heat and Power Plants receive an additive to the electricity price depending on the installed capacity of the plant and the fuel. 4. State Energy Conception of the Czech Republic: (approved by Gov. Decree No. 211 of March 10, 2004). The Conception elaborated by the Ministry of Industry and Trade is one of the basic components of the economic policy of the state. It represents the vision of the Czech State on creating conditions for reliable and long-term safe energy supply at acceptable price as well as for efficient energy use. The Concept contains four main targets concerned with fulfilment of the basic priorities in more specific form. The targets are on : maximizing of energy effectiveness, the amount and structure of the consumption of primary energy sources, Provision for the maximum environmental soundness; Transformation and liberalization of the energy management. 5. The National Energy Policy: The National Energy Policy was approved by government decision No. 50 of 12 January 2000. This basic document indicates the targets in the area of energy management according to the needs of economic and social development, including environmental protection. The long-term strategic targets of energy policy include a gradual reduction of the volumes of energy and raw materials needed by the Czech economy to meet the level of advanced industrial countries. The new sub-objectives up to 2020 on the demand side are to remove price subsidies and distortions, to create competitive markets for electricity and gas, to achieve freedom of choice for consumers, and to ensure energy efficiency enhancement.
6. The State Environmental Fund (SEF): SEF is supervised by the Minister of the Environment, offers some investment support for non profit enterprises interested in implementing various projects concerning different fields of environmental protection including renewable energy sources utilization. 7. Annual State Support Programme for Energy Saving and the Use of Renewable Energy Sources: The Government adopted the first Annual State Support Programme for Energy Saving and the Use of Renewable Energy Sources, based on the National Programme for Economic Energy Management and Use of Renewables. The first Annual Programme establishes aims and benchmarks for subsequent projects which are managed by various Ministries, depending on sectoral responsibility. The Czech Energy Agency manages projects on behalf of the Ministry of Trade and Industry. 8. The Renewable Act: At the beginning of this year new legislative provision was adopted by Czech government for better and long term support of renewable electricity (Act No. 180/2005). The Renewable Act should ensure an 8 % share of renewable energy in the Czech Republic’s gross domestic electricity consumption by 2010, a target laid down in the Czech Republic’s accession treaty with the EU. The new act transposes the 2001/77/EC directive into Czech legal system. The adopted support scheme provides 15year guarantee of fixed feed-in tariffs, differentiated by technology
•
Any major energy network or sustainable energy studies available
National energy efficiency study: The National Energy Efficiency Study has developed specific policies for the promotion of end use energy efficiency and renewables. These are described in two Action Plans. It contains detailed information on options and measures, potentials, barriers and policy instruments for energy efficiency and renewables. In addition, two separate Action Plans have been published: The Energy Efficiency Action Plan focuses on promotion of energy efficiency in end-use; and The Renewable Energy Action Plan deals with policy on promotion of renewable energy production. • Role of government in energy policy – which departments are involved? The discharge of state administration in Energy Sector is vested mainly in the Ministry of Industry and Trade, the Energy Regulatory Office, and the State Energy Inspectorate. However, other actors are also involved. •
The Ministry of Trade and Industry: the Ministry is the authority responsible for developing the national energy policy, observing international commitments and treaties, and granting the State’s consent to the building of new capacities in the electricity industry and the heat supply industry, and the State’s consent to the building of direct lines and selected gas facilities in the gas industry, in accordance with the conditions laid down in a special part of the law.
•
Energy Regulatory Office: The Energy Regulatory Office (ERO) was set up in 2001 as another central body of state administration, which has the main tasks of
Support of economic competition;
Support of the use of renewable and secondary energy sources;
Protection of consumers´ interests in the areas of energy sector where competition is not feasible.
The State Energy Inspection: SEI of the Czech Republic is a state administration body acting on conditions and state supervision in the power industry branches and on amending selected acts on energy economy and on the Czech government’s powers concerning prices. Based on Art. 92 of Act. No. 458/2000 Coll., the CR-SEI is an administrative body subordinated to the Ministry of Industry and Trade of the Czech Republic. The CR-SEI is a part of the government. The CR-SEI is a budgetary organization and its Central inspectorate is in Prague.
National office of energy inspection: The National office of energy inspection is responsible for the implementation of requirements of the Energy Act and the Energy Management Act (implemented on Jan. 1st, 2001).
State Office for Nuclear Safety: The SÚJB is a governmental regulatory body responsible for governmental administration and supervision in the fields of uses of nuclear energy and radiation and of radiation protection.
Any government (or government funded) agencies with a specific role in sustainable energy and/or environmental protection (with an energy role)
Czech Energy Agency: The Czech Energy Agency is a subsidized organization established by the Decision of the Minister of Industry and Trade in 1995, with the mission of: preparation, realization and consistent evaluation of the State Programs for financial subsidies for implementation of the energy savings equipments and reduction of the negative environmental impacts which are generated during energy processes
initiating, supporting and realizing activities leading to energy savings and reductions of the negative environmental impacts of the consumption and transformation in all types of energy
State Environmental Fund: State Environmental Fund of the Czech Republic was funded in 1991 as an economic instrument which aims to:
Fulfill the obligations arising from the international conventions on environmental protection; Fulfill the bonds of EU membership; Implement the National Environmental Policy
Czech Environmental Institute (CEI): CEI is one of the grant service organizations of the Ministry of the Environment of the Czech Republic. The task of the CEI is to provide information and expert support in the field of environmental protection for local government, which involves carrying out research projects, at both the national and international level, aimed at environmental protection. Technology Centre of the Academy of Sciences of the Czech Republic TCASCR: TCASCR was involved in The Organizations for the Promotion of Energy Technologies (OPET-CR) activities, developed during recent years by the Ministry of Environment, to promote the use of renewable energy technologies throughout the Czech Republic. Activities are aimed at individuals, local authorities, SMEs, consumers and producers. TCASCR was also involved in "Energy, Environment and Sustainable Development", one of the four thematic programmes of the Fifth (EC) RTD Framework Programme (1998-2002). The State Energy Inspection: SEI of the Czech Republic is a state administration body acting on conditions and state supervision in the power industry branches and on amending selected acts on energy economy and on the Czech government’s powers concerning prices. Based on Art. 92 of Act. No. 458/2000 Coll., the CR-SEI is an administrative body subordinated to the Ministry of Industry and Trade of the Czech Republic. The CR-SEI is a part of the government. The CR-SEI is a budgetary organization and its Central inspectorate is in Prague. • Any energy planning procedure in place During 1997 – 2002 the Government of the Czech Republic adopted or discussed wide range of sectoral strategic policies that on the basis of large, some times compromised, consensus incorporated the principles of sustainable development.
State Energy Policy of January 2000,
State Programme of the Support for the Use of Renewable Resources of Energy adopted on annually basis,
State Programme for Energy Savings of 2000,
SECTION 4: ENERGY REGULATION •
Is there an energy or utility regulator? When was it established?
The regulator is the Energy Regulation Office (ERO) which was established in 2001. Its establishment was in compliance with provision of energy law. Financed by the State Budget, its main tasks are to grant licenses, regulate prices, and to resolve disputes
related to access to transmission or distribution networks. It is responsible for price setting. The ERO´s organizational structure is composed of a Regulation Section, a Licensing Department, a Strategy Department and the ERO Bureau Department. •
Degree of independence of the regulator from government (legal structure, who appoints the regulator and board)
The Director of the Regulation Section which is also the Vice-Chairman of the Energy Regulatory Office is being appointed for a term of five years (and dismissed) by the Government. The Energy Regulatory Office submits its Annual Report for approval to the Government and Parliament’s House of Deputies through the Ministry of Industry and Trade. •
Regulatory framework – legislation, duties, powers (any references to environment, sustainable energy )
The discharge of state administration in Energy Sector is vested mainly in the Ministry of Industry and Trade, the Energy Regulatory Office, and the State Energy Inspectorate. However, other actors are also involved. The Ministry of Industry and Trade: the Ministry is the authority responsible for developing the national energy policy, observing international commitments and treaties, and granting the State’s consent to the building of new capacities in the electricity industry and the heat supply industry, and the State’s consent to the building of direct lines and selected gas facilities in the gas industry, in accordance with the conditions laid down in a special part of the law. Ministry of Industry and Trade carries out the competencies in the energy sector stipulated in the law. In addition, the Ministry of Industry and Trade is a state administration authority to be, in case of need, responsible for tendering processes for the construction of new energy capacities. Energy Regulatory Office: The Office’s main tasks include market regulation with a view to substituting market mechanisms in the areas of energy industries in which competition is not feasible and in which there exists danger of abuse of a dominant position. The Energy Regulatory Office protects consumers against energy utilities’ efforts to increase prices; oversees the observance of the conditions for these utilities’ business; and, not least, creates the preconditions for the quality and reliability of energy supplies to final customers. The Energy Regulatory Office is involved in the drafting of laws having a bearing on the energy sector. As part of its responsibilities, the Energy Regulatory Office is authorised to issue implementing regulations (primarily public notices and price decisions). The State Energy Inspectorate:SEI is the inspection and penalising authority. Where system operators or other obligated entities default on the provisions of the Energy Act
which provide for the obligation of functional and accounting unbundling, such conduct is regarded as an administrative delict and as such can be penalised by a fine imposed by the State Energy Inspectorate. •
Regulator’s roles – key tasks (e.g. price controls, promoting competition etc) , actions to date, any action/role in the sustainable energy field)
Energy Regulatory Office: Besides the tasks mentioned above, The Energy Regulatory Office also issues the Electricity Market Rules, the principles of pricing the activities of the Electricity Market Operator, and the Gas Market Rules. The Energy Regulatory Office is authorised to approve the Commercial Terms and conditions of the Electricity Market Operator; the Rules of the Electricity Transmission System Operation (Grid Code); the Rules of the Electricity Distribution System Operation; the Rules of the Gas Transmission System Operation (Grid Code); and the Rules of the Gas Distribution System Operation. The ERO’s powers also include the opportunity to present suggestions to the State Energy Inspectorate to check the meeting of the obligations under the Energy Act and, as applicable, to propose the imposition of penalties, and to notify the Office for the Protection of Competition of cases of abuse of the dominant position on the market. The Energy Regulatory Office decides on the award, change, or revocation of licences for business in the energy industries and for the Electricity Market Operator’s activities; on imposing the obligation of supplies over and beyond licences; on imposing the obligation to provide, in urgent cases, energy facilities for meeting the obligation of supplies over and beyond licences; on price controls; etc. It is also within the ERO’s competencies to adjudicate disputes, for example, disputes between licence holders and their customers or those concerning failure to reach agreement on regulated access to the transmission or distribution system. •
Role of government departments in energy regulation (both where a regulator exists and where there is no regulator)
Ministry of Industry and Trade: According to the Energy Act in the Czech Republic, the electricity market shall be based on regulated access to the transmission system and distribution systems and that electricity generating capacities may only be built subject to the State’s authorization, on the granting of which the Ministry of Industry and Trade shall decide. The Ministry is the authority to grant the State’s authorizations for the building of direct lines. •
Have any regulatory barriers to sustainable energy been identified and if so what are they?
None identified.
REFENCES: MPO, Ministry of Industry and Trade, 2004, State Energy Policy of The Czech Republic, Prague, http://www.mpo.cz/dokument12265.html MPO, Ministry of Industry and Trade, 2004, State Energy Policy of The Czech Republic, Prague, Prague Daily Monitor, The Czech Republic's English-language electronic news daily, 26 July2006,(URL:http://www.praguemonitor.com/ctk/?story_id=w37461i20060726;story= CEZ-to-shift-exports-from-Western-Europe-to-Slovakia-Hungary) European Regulators Group for Electricity and Gas, 2005, The Czech Republic’s National Report on the Electricity and Gas Industries for 2004, The Czech Association for RES utilization, http://biom.cz/index.shtml?x=823784 (consulted July, 2006) Josef Bubeník, 2005, End-use efficiency in buildings and Energy Policy in Czech Republic-Country Report, Czech Energy Agency Váňa, J. Připravovaná podpora využití OZE v ČR (The Support for REX Prepared in the CR) CZ BIOM, http://www.biom.cz/index.shtml?x=131870 IEA, 2005, Energy Policies of IEA Countries – Czech Republic -- 2005 Review, ERO, 2005, The Czech Republic’s National Report on the Electricity and Gas Industries For 2004, Energy Regulatory Office, 2005 CR SEF - State Environment Fund of the Czech Republic, Energy Legislation and Policy, Czech Republic www.sfzp.cz Wees, M.T. 1999, National energy efficiency study: the Czech Republic, ECL Beleiddtudies Hlavacek, J., 2002, Country Report: Czech Republic, Regional Workshop on Capacity-Building in Governance and Public Administration for Sustainable Development, Ministry of Environment of the Czech Republic Thessaloniki, 28-31 August 2002 Czech statistical office, accessible from: www.czso.cz State Environmental Fund of the Czech Republic, http://www.sfzp.cz/en/ Austrian Energy Agency, http: www.eva.ac.at
