Czech government finally adopts long-term energy strategy, with nuclear front and centre

By bne IntelliNews May 19, 2015

bne IntelliNews -


The Czech government has finally approved its long-awaited energy strategy, which lays out the country’s plans for the coming decades, officials said on May 18. The document puts the focus on development of nuclear energy as the country's main source of energy.

"The adopted strategy is another step toward low-carbon energy, with nuclear, renewable and secondary sources to be the main sources of electricity generation,” Prime Minister Bohuslav Sobotka said, according to CTK.

The strategy includes six base scenarios for the long-term development of the Czech energy sector to 2040. The most likely development, according to the plan, is that nuclear power will serve as the primary source, followed by gas and crude oil.

The document, which is yet to be published, reportedly leaves open the question of financing additional nuclear units. That's a central issue for state-controlled utility CEZ, which has been struggling to build new reactors. Last year it dropped a €11bn international tender to build two new units at the Temelin power plant after the government declared it would not offer guarantees.

The current plans envisage one unit will be built at the Dukovany plant and another at Temelin. However, the government reiterated its opposition to providing state subsidies.

“We should look for all possible avenues to further develop Dukovany and Temelin, but without having to provide guarantees that would present a risk for the state budget,” Sobotka told a news conference, according to Bloomberg.

According to recent suggestions from government officials, the favoured financing model would be to offer minority stakes in the new power units to partners.

That threatens to set up a whole new conundrum for Prague. Russia's state nuclear agency Rosatom was the only bidder to offer funding in the abandoned Temelin tender, and many senior Czech officials remain close to Moscow. However, offering Russia ownership of an EU nuclear plant would put Prague on a collision course with Brussels and Washington.

Other energy technologies are also controversial, if domestically so. The details released on the strategy document suggests the government has still yet to decide on whether coal mining limits should be lifted.

The failure of the coalition government to reach a compromise deal on the issue has helped delay the adoption of the long-term energy strategy, which was originally meant to be released in December. The approved energy plan does not, reportedly, provide clarity on the issue.

The Czech state has maintained limits on mining of the country's lignite coal stocks since 1991, to protect local environments around mines. Czech Industry Minister Jan Mladek has said he supports a plan to lift the limits at some deposits. Yet, his rival, powerful Finance Minister Andrej Babis, has said he is against lifting the limits because most of the coal mined in the Czech Republic is used to produce electricity that is exported abroad.

Proponents point out that lifting the limits would raise reserves and enable power generators to extend the life of their coal-fired power and heating plants. However, opponents claim that extending mining could lead to the destruction of villages - as happened during communist rule - and further environmental damage. One village in the region affected has threatened it will look to secede and join Germany if the limits are lifted.

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