Effect on ČEZ remains uncertain as experts question feasibility of plan
When Germany chose to shut down eight of its nuclear power plants immediately after the meltdown of the Fukushima Daiichi plant in Japan, and then moved to speed up the shutdown of the rest by 2022, it couldn’t have been better news for state-owned energy goliath ČEZ, as Germany went from being an energy exporting country to one dependent on imports.
But now, both Germany and Austria, the Czech Republic’s second-largest electricity export destination, are raining on ČEZ’s parade with measures to stop imports of electricity generated by nuclear plants, which account for 30 percent of Czech production. Legislation blocking the import of nuclear generated electricity is expected to be fully approved by the Austrian government in July. However, what the future holds for those two countries’ energy picture isn’t certain, and some analysts maintain it will be impossible to cut off imports of nuclear-generated electricity in the next decade.
Following Germany’s decision to discontinue all use of nuclear plants in the country, Czech energy analysts reported ČEZ was in a position to significantly profit by increasing exports to Germany and expanding coal-fired and nuclear plants, all while prices rose because of the strain on supply.
Since then, there has been some shift. Now, prices are expected to ease from 2013 if Austria and Germany succeed in stopping nuclear-electricity imports, since the Czech Republic would be left with a surplus. That would come at a time when electricity prices are expected to drop based on a decrease in the price of carbon credits.
The expansion of ČEZ’s Temelín nuclear power plant is also at risk, some say, because of pressure from Germany and Austria to slow the growth of nuclear plants and even close down some sites, though ČEZ says expansion will go ahead as planned.
Austria, which accounts for 42 percent of net Czech electricity exports, or 6.3 terawatt hours, is pushing through an “eco amendment” that promises Austria will no longer import nuclear electricity and will compensate by increasing domestic power generation from renewable resources to 85 percent by 2020. The government has also said it plans to launch an initiative to “increase transparency” and show consumers from what sources providers get their electricity, a government spokesman said.
Germany, which has doubled imports of Czech electricity in the months following the shutdown of the first eight nuclear plants, annually imports around 60 percent of Czech net exports, or 8.8 terawatt hours. But politicians from Germany’s increasingly powerful Green Party have said their country was on track to domestically meet electricity demands without imports, with 35 percent of electricity coming from renewables by 2020.
Aside from Germany and Austria, the infrastructure exists for the Czech Republic to export electricity to its other neighbors, Poland and Slovakia. Poland’s net electricity supply is independent of imports, while Slovakia imports 34 percent of Czech net exports. However, some members of the Slovak Green Party have asked their government to reduce imports, also in the spirit of not relying on nuclear electricity.
“Let’s assume Germany and Austria blocked imports. It would have a very big impact on the Czech Republic,” said Jan Tomaník, an energy analyst at Wood & Co, who added that it is impossible for the importing country to know for sure which sources the energy comes from, so Austria would have to halt all electricity imports from the Czech Republic to ensure no nuclear energy got through.
Tomaník and other analysts say talk of doing away with imports altogether just isn’t realistic, as Germany and Austria’s plans are heavily reliant on developing dependable renewable sources in a relatively short amount of time.
Halting imports of nuclear electricity is not possible without increasing the use of more traditional sources with higher carbon-dioxide emissions, those who support further use of nuclear power say, as the supply of renewable resources is not always continuous.
“Renewables are the best form of electricity, but it will probably take the EU a long time – several decades – to be 100 percent reliant on renewables,” said Stephen Tindale, an associate fellow at the Centre for European Reform in London. “Before then, we need a low carbon bridge to get [away] from dependence on oil and coal.”
Those who support Austria’s proposal to block nuclear electricity point to the country’s success in already achieving 68 percent renewable-electricity production, based mostly on extensive hydroelectric facilities.
“My advice to the Czech government would be to continue to use nuclear, because it is a low carbon source for significant amounts of electricity,” Tindale said. “Germany is supposed to reach 18 percent of total energy from renewables by 2020 based on EU targets. That still leaves 82 percent. To say they’ll be able to produce that using renewables soon … Maybe if you define ‘soon’ as in 50 years, that might be right.