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Generation, Mining, Construction

The Czech Republic is not a country with sufficient reserves of such high-quality fuels as, for example, crude oil or natural gas. Instead, in terms of energy security and independence its primary fuel for generating electricity is coal from domestic coal deposits. CEZ Group power plants also use other types of fuel, however.

Generation

Nuclear Fuel

Fuel for Dukovany Nuclear Power Station is sourced, under a long-term contract, from Russia-based OAO TVEL, which not only fabricates the fuel, but also provides a comprehensive array of conversion and enrichment services. All deliveries in 2011 were of the improved, latest version of the VVER 440 second-generation fuel.

Up until a fuel replacement at Temelín Nuclear Power Station, in 2011 continued to operate Unit 2 with modified fuel from Westinghouse Electric Company LLC (USA) – this is fuel with a reinforced structural skeleton utilizing the modern ZIRLOTM alloy).

Concurrently, a project to develop and license a new fuel of the TVSA-T type from the Russian supplier OAO TVEL was successfully implemented. All necessary permits from the State Office for Nuclear Safety were obtained. A complete fuel replacement was undertaken on Unit 1 as early as 2010. Also in 2010, ahead of schedule, delivery of a portion of the fuel for Unit 2 was secured, while the remaining fuel was delivered on schedule in the first half of 2011. During a planned outage, all 163 fuel assemblies in Unit 2 of Temelín Nuclear Power Station were replaced.

In the years to come, the TVSA-T fuel both units are now running on will enable a further planned increase in the output of Temelín Nuclear Power Station.

Raw uranium necessary to fabricate nuclear fuel, and processing thereof (conversion and enrichment services), were sourced under long-term contracts. Nearly one third of our uranium needs is covered long-term by supplies from the domestic uranium producer DIAMO, with the remainder purchased from international suppliers or through direct deliveries of complete fuel assemblies (mostly for Dukovany Nuclear Power Station).

Based on the change in the supplier of fuel for Temelín Nuclear Power Station, in late 2010 ČEZ began implementing physical deliveries to Russia of enriched uranium processed by suppliers of conversion and enrichment services in the European Union. This strategy will continue in order to maintain the desirable diversification of suppliers, as recommended by the supply management policy of the EURATOM Supply Agency. Concurrently, ČEZ also maintains a strategic inventory of uranium in various stages of processing, at supplier sites, in order to mitigate the risk of supply interruption.

Solid Fossil Fuels and Sorbents

Supplies of solid fuels for ČEZ coal-fired power plants in 2011 were dominated by brown coal, which at 28.0 million tons accounted for 95% of total coal consumption. In 2010 the figure was 25.9 million tons (95% of coal consumption). The biggest suppliers of brown power generation coal to ČEZ are Severočeské doly, Czech Coal, and Sokolovská uhelná.

Long-term coal supply contracts are in effect with Severočeské doly (agreement on future purchase agreements; valid until 2052) and Sokolovská uhelná (purchase agreement; valid until 2027). Medium-term purchase agreements are in effect with Severočeské doly (2011–2015) and Czech Coal (2006–2012).

Black coal volume supplied to ČEZ power plants totaled 1.4 million tons (5%) in 2011, the same amount as in 2010. The bulk, 1.0 million tons (71%) – and 0.9 million tons (67.1%) in 2010 – was supplied by OKD. The remaining 0.4 million tons (29%) – 0.5 million tons (32.9%) in 2010 – was sourced by import from Polish and Russian suppliers.

Black coal supplies take place under one-year purchase contracts.

The total volume of sorbents for flue gas desulfurization at coal-fired power plants was 1.3 million tons in 2011 and 1.2 million tons in 2010.

Biomass Combustion and Co-combustion

Biomass consumption within ČEZ totaled 379,749 tons in 2011 (+1.9% year-on-year), and 372,500 tons in 2010 . Most frequently, biomass is combusted in the form of wood chip. Other forms include plant matter in the form of pellets made of straw, sugar beet, and sunflower, as well as briquettes and shreddings. For the time being, the share of purpose grown energy crops is low.

Within ČEZ biomass is combusted in the existing coal-fired power and power heating plants Hodonín, Poříčí, Tisová, Vítkovice, and Dvůr Králové nad Labem.

The company Energetické centrum consumed a total of 44,886 tons of this raw material in 2011 for its biomass-fired power plant in Otín u Jindřichova Hradce.

Generation from Biomass in ČEZ Power Plants in the Czech Republic (MWh)

2009 2010 2011
Tisová 45,956 12,705 10,270
Poříčí 92,418 87,437 99,068
Teplárna Dvůr Králové 11,944 9,572 18,630
Hodonín 177,348 197,921 223,076
Vítkovice 29 202
Czech Republic, Total 327,666 307,664 351,246

Natural Gas

ČEZ secured flexible supplies of natural gas for the CCGT power plant in Počerady which is to enter trial operation in 2012.

Mining

Severočeské doly

The core business of Severočeské doly is mining activity. In 2010–2011, it maintained its position as the largest Czech brown coal company. Its share of the brown coal market rose by 4.3 percentage points compared to 2010, to reach 53.7%. The company has two mining operations: Bílina Mines and Nástup Tušimice Mines.

Bílina Mines, operating in the Teplice – Bílina area, mines coal that is characterized by a high heat content and a low proportion of hazardous substances. In 2011, the unit extracted 10.44 million tons of coal, and in 2010 the figure was 9.3 million tons. Bílina Mines supplies power generation coal to the Ledvice and Mělník III Power Stations and to other large power heating plants. Bílina sorted coal, of which the company supplied 2.3 million tons, is another important component in the unit’s production range. The mining operations permit for the Bílina pit was issued under the Opening, Preparation, and Extraction Plan for the Years 2010–2030 by the Most District Mining Office on November 8, 2010, and it entered into legal force on January 26, 2011. As at December 31, 2011, Bílina Mines had approximately 164 million tons of extractable coal reserves.

The Nástup Tušimice Mines brown coalmining operation is located in the westernmost portion of the Ústí Region. In 2011, Nástup Tušimice Mines extracted 14.9 million tons of coal, and in 2010 its extraction volume was 12.3 million tons. All produced coal went to the following recipients: Tušimice and Prunéřov Power Stations, which are local to the mine; the Chvaletice and Mělník II Power Stations; and the Komořany power heating plant (United Energy právní nástupce, a.s.). Nástup Tušimice Mines’ operations in the Tušimice Extraction Area take place under the Opening, Preparation, and Extraction Plan and are permitted by a decision of the Most District Mining Office dated February 28, 2006. The validity of this decision will end when the mining operation reaches the boundaries of the overburden and coal extraction advances set forth in the documentation accompanying the Opening, Preparation, and Extraction Plan of November 2005 (estimated to take place in 2014). As at December 31, 2011, Nástup Tušimice Mines had approximately 240 million tons of extractable reserves.

LOMY MOŘINA

ČEZ owns a 51.05% stake in LOMY MOŘINA. The company’s core business is the mining and processing of rock matter for use in the construction industry and high-percentage limestones utilized in the flue-gas desulfurization (FGD) systems of coal-fired power plants. The company is a major supplier of limestone for use in the FGD systems of CEZ Group coal-fired power plants, to which it supplies approximately 600,000–700,000 tons of limestone per year, approximately half of their annual consumption of this commodity. In 2011, supplies to ČEZ power plants totaled approximately 675,000 tons of limestone. In 2012, they are expected to reach approximately 700,000 tons.

The second key commodity offered by LOMY MOŘINA is construction rock. All of the company’s customers for this commodity are from outside the CEZ Group, and LOMY MOŘINA supplies them approximately 300,000 tons per year, with a moderately declining year-on-year trend. Verified limestone reserves provide good prospects for sustained, long-term extraction operations.

During the months of October and November 2010 we completed the registration of all energy products (so-called power generation by-products) produced by CEZ Group in accordance with the requirements of Regulation No. 1907/2006 of the European Parliament and Council (EC) (the REACH Regulation). Based on long-term testing and subsequent assessment, there is no obligation to classify, mark, or restrict these registered substances for any of the uses identified in the submitted documentation. The testing and assessment, which took place pursuant to the methodologies defined in the REACH Regulation, showed no negative impacts of the above mentioned substances, on either human health or the environment.

Construction

Dukovany Nuclear Power Station

During an outage on Unit 1 that included complete removal of nuclear fuel from the reactor, a CAPEX project was carried out that enabled full utilization of the unit’s design capacity, increasing its output to 510 MW. The unit first achieved the new output level on November 23, 2011, as the third of the power plant’s four units to do so. A similar modification to the last unit (No. 2) will be carried out in 2012.

Temelín Nuclear Power Station

ČEZ announced the public tender Completion of Temelín Nuclear Power Station on August 3, 2009. Pre-qualification of bidders was completed in the spring of 2010, with the following bidders emerging: the consortium of Westinghouse Electric Company LLC and Westinghouse Electric Czech Republic s.r.o.; the consortium ŠKODA JS a.s., Atomstroyexport JSC, and JSC OKB Gidropress; and AREVA NP SAS. From the spring of 2010 to October 2011, pre-bidding discussions were held with the qualified bidders pursuant to Section 33 of Act No. 137/2006 Sb. on Public Procurement, with the objective of finding one or more solutions that meet the needs and requirements of ČEZ.

On October 31, 2011, ČEZ delivered calls to submit bids, including Request for Proposal (RFP) documentation, to the bidders that qualified for the RFP proceedings of the public tender. In the documentation, ČEZ precisely specified its needs and requirements for the subject matter of the public tender, i.e. turn-key delivery of two complete nuclear power plant generating units, including fuel assemblies covering nine years of operation. The RFP documentation also contained commercial and technical conditions to be met within project implementation, assessment criteria, and a description of how the bids will be evaluated.

ČEZ opened the bids submitted in the public tender for completion of Temelín Nuclear Power Station on July 3, 2012 in the presence of the bidders: AREVA; the consortium of Westinghouse Electric Company LLC and Westinghouse Electric Czech Republic; and the consortium of ŠKODA JS, Atomstroyexport, and Gidropress. Starting from that date, a team of experts has been assessing and evaluating the bids in detail, and conducting negotiations with the bidders for the purpose of improving the terms of the bids. ČEZ has over one year in which to make a selection. Signing of the contract is planned for late 2013.

Comprehensive Renewal of Tušimice II Power Station

The Comprehensive Renewal of Tušimice II Power Station is the first completed project in the ČEZ coal-fired plant renewal program. The upgrade of Tušimice II Power Station increased the plant’s net efficiency from 34% to 39%, resulting in a savings of approximately 14% of primary fuels, i.e. coal. At the same time, the plant’s emissions were reduced: nitrogen oxides by 70%, sulfur dioxide by 79%, and solid particulate emissions by 87%.

Comprehensive Renewal of Prunéřov II Power Station

The zoning decision entered into legal force on December 22, 2011. On December 27, 2011 the building permit application was filed to the relevant building permits authority. It is expected to be obtained in August 2012.

Construction of CCGT Installation at Počerady Power Station

The project entered the implementation phase on March 28, 2011. Construction work got underway. The boilers were installed, including bundles and flue-gas inlets, and two stacks were built, as was the steel superstructure for the main generating unit, including cladding and an encapsulated substation. Work also took place on the chemical water treatment plant, the generator machine room, transformer foundations, vertical structures, fire containment walls, and foundations for the gas regulation station. The new installation is to be handed over for trial operation in mid-2013.

Construction of New 660 MW Installation at Ledvice Power Station

2011 saw continued installation work on the boiler building, machine room, and flue-gas desulfurization system. In the electrical portion of the project, installation of the main transformer, branch transformer, and substation were completed. The first trial activation of the 400 kV line took place in early December 2011. Due to delays in installation of the boiler’s steel superstructure and problems that arose in the manufacture of a component of the boiler’s pressure system (membrane walls), commissioning of the installation for trial operation is expected in 2015.

The plant renewal program calls for the investment of over CZK 100 billion in upgrading selected installations and building new generating units. It is the largest capital project in the recent history of the Czech Republic. It will ensure that the Czech power industry remains competitive, and will bring improvements in the plants’ economic as well as environmental parameters.

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