1 Presentation of the Czech Republic 4th thematic workshop of CENERG, WARSAW, May 9th 2005: The state and forecast of electricity sector in CEE region group up to 2030 PRESENT SITUATION AND EXPECTED DEVELOPMENT OF THE ELECTRICITY SECTOR IN THE CZECH REPUBLIC UP TO 2030 EGÚ Brno, a. s. 4th thematic workshop of CENERG, WARSAW, May 9th 2005: The state and forecast of electricity sector in CEE region group up to 2030 PRESENT SITUATION AND EXPECTED DEVELOPMENT OF THE ELECTRICITY SECTOR IN THE CZECH REPUBLIC UP TO 2030 EGÚ Brno, a. s.

2 Presentation of the Czech Republic CONTENT  Introduction  Forecast of power demand  Installed capacity and the structure of power plants  Electricity production  Power network development  Environmental situation.  Introduction  Forecast of power demand  Installed capacity and the structure of power plants  Electricity production  Power network development  Environmental situation.

3 Introduction NATIONAL ENERGY STRATEGY – CZECH ENERGY POLICY Determines long-term objectives in the energy sector and prepares tools for reaching these objectives.  Dynamically changing conditions – the problems of the long-term growth of the energy sector in the Czech Republic are subject to continuous analyses aiming at the minimization of risks and optimization of the growth of both individual economic subjects and the whole energy sector of the country. Determines long-term objectives in the energy sector and prepares tools for reaching these objectives.  Dynamically changing conditions – the problems of the long-term growth of the energy sector in the Czech Republic are subject to continuous analyses aiming at the minimization of risks and optimization of the growth of both individual economic subjects and the whole energy sector of the country.

4 Introduction NATIONAL ENERGY STRATEGY – CZECH ENERGY POLICY The Czech energy policy, identical with EU energy policy, emphasizes requirements that ensure:  Objectives in the environmental protection and respecting the principles of sustainable growth.  Safety and reliability of energy supplies.  Support of the competitiveness of the national economy. The main strategic objectives:  Basic concept of the long-term development of the energy industry  To create legislation and conditions to motivate energy consumers, suppliers and distributors toward the environment-friendly behaviour. The Czech energy policy, identical with EU energy policy, emphasizes requirements that ensure:  Objectives in the environmental protection and respecting the principles of sustainable growth.  Safety and reliability of energy supplies.  Support of the competitiveness of the national economy. The main strategic objectives:  Basic concept of the long-term development of the energy industry  To create legislation and conditions to motivate energy consumers, suppliers and distributors toward the environment-friendly behaviour.

5 Forecast of power demand  The present annual net consumption of electricity per capita is 5,7 MWh.  Next growing electricity consumption is supposed (economy development and the household instrumentation). This trend is validated by international comparison with similar countries, too.  However, opposed to it there are trends to reduce the energy intensity of GDP and trends to energy savings and to increases in energy efficiency of appliances.  Up to date scenarios of the power demand development (elaborated in EGÚ Brno) are based on the premise that the consumption of electricity will grow, but with a gradual decrease of the consumption growth rate. The mean year- to-year growth rate of the electricity consumption between the years 2000 and 2030 will be about 1.0 %.  The annual power demand (electricity consumption) is corrected to the normal temperature conditions.  The present annual net consumption of electricity per capita is 5,7 MWh.  Next growing electricity consumption is supposed (economy development and the household instrumentation). This trend is validated by international comparison with similar countries, too.  However, opposed to it there are trends to reduce the energy intensity of GDP and trends to energy savings and to increases in energy efficiency of appliances.  Up to date scenarios of the power demand development (elaborated in EGÚ Brno) are based on the premise that the consumption of electricity will grow, but with a gradual decrease of the consumption growth rate. The mean year- to-year growth rate of the electricity consumption between the years 2000 and 2030 will be about 1.0 %.  The annual power demand (electricity consumption) is corrected to the normal temperature conditions.

6 Forecast of power demand Annual power demand (GWh)

7 Forecast of power demand Annual power demand (GWh)

8 Installed capacity and the structure of power plants  The present scenarios of the Czech generation system are based on presumption, that the following types of generation equipment shall be built:  Thermal power stations burning domestic coal,  Thermal power stations burning natural gas,  Nuclear power stations,  Renewable electricity sources (biomass, wind),  There are no power stations burning liquid fuels in the Czech power system and we do not suppose building the power stations of that type. Small quantity of liquid fuels is used for the stabilization of coal burning only.  At present, renewable electricity sources are composed by hydro power stations above all.  The relevant part of the Czech hydro power stations is formed by pumped storage hydro plants (PHP). PHPs are not a source of electricity but these plants provide ancillary services before all.  The present scenarios of the Czech generation system are based on presumption, that the following types of generation equipment shall be built:  Thermal power stations burning domestic coal,  Thermal power stations burning natural gas,  Nuclear power stations,  Renewable electricity sources (biomass, wind),  There are no power stations burning liquid fuels in the Czech power system and we do not suppose building the power stations of that type. Small quantity of liquid fuels is used for the stabilization of coal burning only.  At present, renewable electricity sources are composed by hydro power stations above all.  The relevant part of the Czech hydro power stations is formed by pumped storage hydro plants (PHP). PHPs are not a source of electricity but these plants provide ancillary services before all.

9 Installed capacity and the structure of power plants  The real possibilities of a future development of hydro power stations are practically exhausted and the next development of renewable sources must go by another way.  The presented scenario is slightly different from the scenario sent to CENERG before. This is given by the results of actual analyses and by the recurrence of more rational development scenarios.  The real possibilities of a future development of hydro power stations are practically exhausted and the next development of renewable sources must go by another way.  The presented scenario is slightly different from the scenario sent to CENERG before. This is given by the results of actual analyses and by the recurrence of more rational development scenarios.

10 Installed capacity and the structure of power plants Installed capacity of Czech power stations (MW)

11 Electricity production Supposed gross power generation  Submitted values of gross power generation figure on conservation of the current territorial environmental limits.  The green scenario has just been slightly modified as a result of compromise between Ministry of Industry and Trade and Ministry of Environment of the Czech Republic.  Submitted values of gross power generation figure on conservation of the current territorial environmental limits.  The green scenario has just been slightly modified as a result of compromise between Ministry of Industry and Trade and Ministry of Environment of the Czech Republic.

12 Electricity production Gross power generation - CPS (GWh)

13 Electricity production Supposed gross power generation The presented scenario of the installed capacity and the generation is only one of possible scenarios which are elaborated by EGÚ Brno and which are continuously updated.

14 Power network development Network load development The estimated loads of the Czech power system according to the approved scenario of the power demand forecast are as follows: Year Power system load [MW]

15 Power network development

16 Power network development Characteristics of the transmission system development till 2010:  Reinforcement of 400/110 kV transformer coupling between TS and DS  220/110 kV transformer coupling is just being renovated on contemporary level.  Renovation of 400/220 kV transformer coupling will be completed.  No transmission substation is supposed to be built by 2010 except the cases where:  new power sources could be connected to TS (e.g. high capacity wind farms)  supply of new large industry zones  Construction of new transmission lines is much reduced and is aimed at increasing the operation reliability of present internal 400 kV transmission system.  Increasing of transmission capability in north-south direction is being prepared in the Moravian part of the transmission network  Czech–Austria cross-border interconnection will be reinforced through a transmission line doubling the existing interconnection.  Reinforcement of 400/110 kV transformer coupling between TS and DS  220/110 kV transformer coupling is just being renovated on contemporary level.  Renovation of 400/220 kV transformer coupling will be completed.  No transmission substation is supposed to be built by 2010 except the cases where:  new power sources could be connected to TS (e.g. high capacity wind farms)  supply of new large industry zones  Construction of new transmission lines is much reduced and is aimed at increasing the operation reliability of present internal 400 kV transmission system.  Increasing of transmission capability in north-south direction is being prepared in the Moravian part of the transmission network  Czech–Austria cross-border interconnection will be reinforced through a transmission line doubling the existing interconnection.

17 Power network development

18 Power network development

19 Power network development

20 Power network development

21 Power network development

22 Power network development Characteristics of the transmission system development after 2010:  General run of a high utilization of technical equipment to its operation-technical limits is expected in long-term forecast.  More transmission equipments that are at the end of their lifespan will have to be replaced.  400 kV transmission system  Further reinforcement of 400/110 kV transformer coupling prefers supply from 400 kV  New big power plants – preferred connection to 400 kV voltage level  New transmission lines – to increase a secure and reliable transmission system operation.  220 kV network will be probably operated and maintained on the contemporary level and will become a backup part of the transmission network from the reliability point of view.  Areas with a big amount of consumption or new large industry areas :  Construction of new transmission substations  Better coordination with the development of HV nodal areas of DS is expected in reinforcement of TS/DS transformer coupling  General run of a high utilization of technical equipment to its operation-technical limits is expected in long-term forecast.  More transmission equipments that are at the end of their lifespan will have to be replaced.  400 kV transmission system  Further reinforcement of 400/110 kV transformer coupling prefers supply from 400 kV  New big power plants – preferred connection to 400 kV voltage level  New transmission lines – to increase a secure and reliable transmission system operation.  220 kV network will be probably operated and maintained on the contemporary level and will become a backup part of the transmission network from the reliability point of view.  Areas with a big amount of consumption or new large industry areas :  Construction of new transmission substations  Better coordination with the development of HV nodal areas of DS is expected in reinforcement of TS/DS transformer coupling

23 Power network development Characteristics of the transmission system development after 2010:  Complying with requirements of cross-border exchanges will become a strong aspect in transmission system development.  Amount and prevailing direction of cross-border exchanges will necessitate the reinforcement and construction of other interconnections to reinforce the most loaded cross-border profiles.  Using higher voltage level than 400 kV will not be necessitated until  Complying with requirements of cross-border exchanges will become a strong aspect in transmission system development.  Amount and prevailing direction of cross-border exchanges will necessitate the reinforcement and construction of other interconnections to reinforce the most loaded cross-border profiles.  Using higher voltage level than 400 kV will not be necessitated until 2030.

24 Power network development Characteristics of the distribution system development:  110 kV distribution network’s development is planned for a shorter period of time.  Trends of consumption development and securing its supply are monitored, including supply of new merging industry areas. Construction of new distribution lines and substations is adjusted to these aspects.  Merger of distribution companies will influence the operation and development of 110 kV distribution networks. There are 3 groups of distribution companies owners in the Czech Republic (ČEZ, E.ON and PRE).  It is expected that requirements for the reinforcement of interconnection among distribution companies of the respective owner will increase as well as a common attitude toward the 110 kV network‘s development.  Gradual integration, including network’s development concept, is taking place within the groups of distribution companies owners.  Changes in TS/DS transformer coupling have significant impact on distribution network’s development, especially on the operational topology of 110 kV nodal areas.  With progressive market liberalization, it is expected that cross-border exchanges on 110 kV voltage level (in island operation) will be reduced enough.  110 kV distribution network’s development is planned for a shorter period of time.  Trends of consumption development and securing its supply are monitored, including supply of new merging industry areas. Construction of new distribution lines and substations is adjusted to these aspects.  Merger of distribution companies will influence the operation and development of 110 kV distribution networks. There are 3 groups of distribution companies owners in the Czech Republic (ČEZ, E.ON and PRE).  It is expected that requirements for the reinforcement of interconnection among distribution companies of the respective owner will increase as well as a common attitude toward the 110 kV network‘s development.  Gradual integration, including network’s development concept, is taking place within the groups of distribution companies owners.  Changes in TS/DS transformer coupling have significant impact on distribution network’s development, especially on the operational topology of 110 kV nodal areas.  With progressive market liberalization, it is expected that cross-border exchanges on 110 kV voltage level (in island operation) will be reduced enough.

25 Power network development Cross-border exchanges  It is supposed to decrease the today’s significant export character of the Czech power system that results the high utilization of the transmission system in the north-to-south direction in a medium-term forecast.  A new aspect that significantly limits available transfer capacity of interconnections will be the fluctuating character of wind power plants operation in countries with a high share of wind energy utilization. It will mainly influence the Czech – Germany interconnections (VE-T, E.ON).  Bigger changes of interconnection operation may be expected in the context of trade development in the European internal electricity market. The Czech transmission system, with respect to its position, will be more used for securing the transits in various directions. Except the north-south transit direction, it is expected to increase the transmission system loading in the east-west direction due to transits in this direction.  Presumed intention of the connection of Ukraine and Russia to UCTE will probably lead to increase the level of the present transits in West Europe direction, which will result in requirements for higher transits in the east-west direction in the Czech transmission system that has been constructed well for this direction.  Bigger changes of interconnection operation may be expected in the context of trade development in the European internal electricity market. The Czech transmission system, with respect to its position, will be more used for securing the transits in various directions. Except the north-south transit direction, it is expected to increase the transmission system loading in the east-west direction due to transits in this direction.  Presumed intention of the connection of Ukraine and Russia to UCTE will probably lead to increase the level of the present transits in West Europe direction, which will result in requirements for higher transits in the east-west direction in the Czech transmission system that has been constructed well for this direction.

26 Power network development

27 Power network development

28 Environmental situation The presented scenario is a part of a group of “ecological” scenarios, which feature a massive drop of pollutants and greenhouse gases. The emissions fall down by about 25 % in the year 2030 compared to the year This fact is evidenced by the next table.

29 Environmental situation

30 Conclusion  Privatisation of companies and institutions acting in the energy sector,  Liberalization of energy markets,  Integration of the Czech energy sector into the European energy systems,  Change of the structure of primary energy sources,  Change of the structure of final energy consumption,  Minimization of negative impacts of the energy sector on the environment,  Promotion of the reduction of energy requirements per unit of GDP,  Support of the utilization of renewable energy sources,  Support of the increased efficiency of energy conversions,  Support of the combined heat and power generation,  Promotion of reliability and security of energy supplies.  Privatisation of companies and institutions acting in the energy sector,  Liberalization of energy markets,  Integration of the Czech energy sector into the European energy systems,  Change of the structure of primary energy sources,  Change of the structure of final energy consumption,  Minimization of negative impacts of the energy sector on the environment,  Promotion of the reduction of energy requirements per unit of GDP,  Support of the utilization of renewable energy sources,  Support of the increased efficiency of energy conversions,  Support of the combined heat and power generation,  Promotion of reliability and security of energy supplies. The Czech energy sector has passed through a massive transformation since 1990, which can be characterized by the following key processes:

31 Conclusion  The processes have not been finished so far – a long-time character, if not permanent.  Positive effects of the transformation process upon the energy efficiency and environmental friendliness of the intended direction of development.  The performance of the Czech energy sector is still not comparable with that of other member countries of the European Union and macroeconomic analyses indicate that the process of performance convergence will take a long time.  The energy sector of the Czech Republic is even now comparable with the energy system of Western Europe and actively accepts positive trends from these countries.  The Czech Republic keeps on analysing potential scenarios of the future development of the Czech energy industry and its risks. These analyses give hope that the Czech Republic will get closer to the main objective which is the provision of affordable energy together with a sustainable growth of the Czech economy.  The processes have not been finished so far – a long-time character, if not permanent.  Positive effects of the transformation process upon the energy efficiency and environmental friendliness of the intended direction of development.  The performance of the Czech energy sector is still not comparable with that of other member countries of the European Union and macroeconomic analyses indicate that the process of performance convergence will take a long time.  The energy sector of the Czech Republic is even now comparable with the energy system of Western Europe and actively accepts positive trends from these countries.  The Czech Republic keeps on analysing potential scenarios of the future development of the Czech energy industry and its risks. These analyses give hope that the Czech Republic will get closer to the main objective which is the provision of affordable energy together with a sustainable growth of the Czech economy.

32 Presentation of the Czech Republic Thank you for your attention EGÚ Brno, a. s. 4th thematic workshop of CENERG, WARSAW, May 9th 2005: The state and forecast of electricity sector in CEE region group up to 2030 Thank you for your attention EGÚ Brno, a. s. 4th thematic workshop of CENERG, WARSAW, May 9th 2005: The state and forecast of electricity sector in CEE region group up to 2030