Energy Transition
SDG7
The need to address climate change is the primary reason for a transition from an energy sector dominated by fossil fuels to one based on emission-free energy sources. A transformation of the energy sector offers opportunities for sustained economic development, energy security, improved health, job creation, and other societal benefits. Generating power from renewable sources is only one part of the energy transition. Another central factor is the application of technologies to improve energy efficiency.
In CEZ Group, the strategy of the energy transition is outlined in VISION 2030—Clean Energy of Tomorrow, which was published in May 2021. The three strategic priorities of VISION 2030 are: (1) the transformation of the generation portfolio to low carbon and the achievement of climate neutrality by 2040 (initially, the target was to achieve carbon neutrality by 2050), (2) the most cost-effective energy solutions and best customer experience in the market, and (3) the development of CEZ Group responsibly and sustainably following ESG principles.
The Science Based Targets initiative (SBTi), which provides expert assessment of climate goals for companies globally, has verified that CEZ Group’s near-term targets meet the conditions of the Paris Agreement.
CEZ Group’s decarbonization strategy includes efficient management of existing coal-fired power plants located near coal basins and the transformation of the heating industry. The share of electricity generated from coal will be reduced from 39% in 2019 to 25% by 2025 and 12.5% by 2030. In accordance with emission reduction plans, CEZ Group plans to reduce the operation of selected coal-fired power plants, and no new coal-fired power plants will be built. In the heating sector, CEZ Group plans to phase out coal by 2030.
Instead, CEZ Group will focus on increasing the capacity of existing emission-free renewable sources and building new ones – mainly photovoltaic power plants. CEZ Group plans to increase the installed capacity of new renewable energy sources by 1.5 GW by 2025 and by 6 GW by 2030. New installations will be built on sites of existing conventional power plants, brownfields, former mine dumps, built-up areas, and low-quality land. The car park in the Dukovany nuclear power plant is an excellent example of repurposing our own premises for the installation of a solar power plant. There are 322 parking spaces roofed with 2,600 double-sided photovoltaic panels generating approximately 850 MWh of emission-free electricity annually.
Nuclear power plants will remain part of a climate-neutral and stable portfolio. CEZ Group takes measures to increase their efficiency to ensure stable and reliable operation. In 2022, CEZ Group signed a Memorandum of Understanding with the South Bohemian Region for the Establishment of the South Bohemia Nuclear Park, which aims to accelerate preparation and introduction of small modular reactors.
In CEZ Group, energy transition combines a comprehensive sustainable approach to the energy sector with the specific needs of individual customers. We gradually increase interest in emission-free electricity generation from renewable sources directly at consumption points. We build self-managing smart distribution networks; we support digitalization and automation of energy solutions; we reduce energy loss and improve energy efficiency.
Further, CEZ Group is active in cooperation with government institutions. CEZ Group signed a Memorandum on Cooperation in Climate Protection with the Czech Ministry of the Environment in 2022. CEZ Group also develop projects supported by public financing from the State Environmental Fund of the Czech Republic. In the first round of the RES+ call No. 2/2021, 17 PV projects with a total installed capacity of 173 MWp were supported. In the second round of the call. No. 2/2022 24 PV projects with a total installed capacity of 727.7 MWp were supported.
Our goal is to develop clean technologies in transport and e-mobility. We install an increasing number of electric car charging stations to enable low-emission modes of transportation. In 2022, CEZ Group built 126 charging stations for electric vehicles in Czechia. It was the highest number so far in one year; the year before, the company put 115 stations into operation. By the end of 2022, CEZ Group operated 515 charging stations with a total capacity of more than 34 MW, which is approximately a 40% of total stations on the market. In 2022, drivers charged their cars 265 thousand times at CEZ Group stations, an increase of 25% compared to 2021. According to the National Action Plan for Clean Mobility, 19-35,000 charging points should be available by 2030.
CEZ Group signed a memorandum launching the first phase of a pilot project to operate 10 hydrogen buses in Central Bohemian Region. A filling station for 100% green hydrogen will be installed as the first in Czechia. The electricity for hydrogen production will be supplied by the hydro power plant portfolio of CEZ Group.
Hydro, Wind, Solar
The strategic priority of VISION 2030—Clean Energy of Tomorrow is to transform the generation portfolio to a low-emission one and achieve carbon neutrality by 2040. The share of coal in production is steadily decreasing; currently, more than 61% of the total generation of CEZ Group consists of emission-free sources, including nuclear.
In line with VISION 2030, CEZ Group increases operation efficiency and production volume at existing emission-free hydropower plants. Storage and pumped-storage hydroelectric power plants ensure dynamic functions of the electricity system, and the power plants serve as an essential backup for the system. In Czechia, CEZ Group has approximately a two-thirds share in the utilized hydraulic energy potential. We operate hydroelectric power plants in the Vltava River Cascade and pumped-storage power plants in Dalešice, Štěchovice, and Dlouhé Stráně. We also operate small-scale run-of-river hydroelectric power plants on several rivers in the country
In 2022, CEZ Group’s modernized hydroelectric power plants retained stable level of production of emission-free electricity set in past 4 years. All CEZ Group hydroelectric power plants in Czechia generated more than 2.1 TWh of electricity.
Comprehensive modernization of CEZ Group hydroelectric power plants has been an essential part of maintaining a stable source of power and stability of the grid. It is the largest project of its kind in the history of the Czech hydropower industry, and it has spanned the past 15 years at the cost of more than CZK 3 billion. In this project, 38 units of 22 hydropower plants have been modernized, and the total capacity of the upgraded units is now 1,425 MW. The modernization has taken advantage of the latest science and technology, which enables the plants to improve energy efficiency by 5%. Under stable hydrological conditions, the upgraded units will produce tens of GWh more of emission-free electricity from water annually, thus contributing to sustainable management of a valuable resource. For example, Slapy power plant will save 80 million liters of water per year while producing the same amount of emission-free electricity. As part of the modernization, a 60-ton turbine block was installed in 2022. The completed modernization of Slapy power plant is another step towards an increased energy and resource efficiency.
Another positive environmental aspect of the modernization is reducing the volume of the oil fill in the hydraulic control of the units. An increase in the pressure in the control hydraulics causes a significant reduction in the volume of the oil fill. The power consumption of the pumps is reduced as well. For example, Kamýk power plant reduced the volume of the operating oil charge in the turbine control by 86% from the original 8,500 liters to today’s 1,200 liters. The modernization of hydropower plants includes the installation of online diagnostics, which enable the monitoring of up to ten technical parameters. So far, online diagnostics have been installed on 18 units. The diagnostics continuously measure the operating conditions of turbomachinery, generators, and transformers. They contribute to improved operational safety, optimized maintenance costs, and lifetime management.
CEZ Group is active in the wind energy sector in Czechia and abroad. The first modern wind power plants were launched in 2009. These units are located near Věžnice in the Vysočina region and near Janov in the Pardubice region. Their installed capacity is approximately 4 MW each.
In 2022, CEZ Group operated wind farms in Czechia and other countries with a total installed capacity of around 142 MW. In Germany, CEZ Group companies operate 53 turbines in 10 onshore wind farms with a total installed capacity of 133.5 MW. Wind power plants in Germany generated 255 GWh of emission-free electricity in 2022, 228 GWh in 2021, and 292 GWh in 2020. Wind power plants in Turkey have an installed capacity of 28.2 MW. By the end of 2022, almost 70% of CEZ Group’s portfolio in the wind power sector in Western Europe was in the development phase. In France, CEZ Group develops a portfolio of 15 onshore wind farm projects with an installed capacity of up to 207 MW, with the first completed project in Aschères (12 MW, 4 turbines) to be fully commissioned in March 2023. In Germany, CEZ Group co-develops in cooperation with local developers 12 wind projects with a potential installed capacity of up to 193.5 MW. The most advanced project – Datteln wind park (11.4 MW, 2 turbines) is expected to be commissioned by the end of 2023.
CEZ Group currently operates photovoltaic power plants in Czechia with a total capacity of 126 MW, covering the demand of about 40,000 Czech households annually. At the same time, CEZ Group is preparing a series of large-scale emission-free projects of new solar sources. These will have a capacity of thousands of MW, gradually replacing the phased-out coal-fired power plants and contributing to emission reduction. In line with VISION 2030—Clean Energy of Tomorrow, CEZ Group plans to increase new renewable energy sources, including photovoltaics, by 1.5 GW of installed capacity by 2025 and by 6 GW by 2030.
In November 2022, CEZ Group started the installation of the biggest photovoltaic power plant in Prague city center on the roof of Prague Congress Centre. The power plant covers an area of 7,000 m2 with 2,080 solar panels. This project is expected to provide annual energy savings of CZK 5.5 million.
CEZ Group also installed photovoltaic panels on the premises of ČEPRO (joint-stock company with 100% state participation). This power plant consists of 1,300 panels and has a total installed capacity of 516 kWp.
Another important photovoltaic power plant was installed on the roof of a Billa warehouse in Modletice near Prague, which annually contributes to an emission reduction of 471 tonnes.
At the very end of 2021, CEZ Group completed the acquisition of the German Belectric Group, a global leader in photovoltaic power plant design. Belectric is active in Germany, France, UK, Italy and Israel and constructed the Tramm Göthen photovoltaic power plant with an installed capacity of 172 MWp.
To test the properties and application of various types of panels, CEZ Group has established a new experimental photovoltaic power plant in Ledvice. New technologies and solutions are tested, such as double-glass and double-face panels (which allow illumination from both sides), half-cut solar panels for increased performance and durability, and PERC panels (which are effective in partial shade or dust accumulation). There are also panels tested for agrivoltaics (agrophotovoltaics) – these are vertically positioned panels suitable for combining clean electricity generation with agriculture. This cutting-edge technology creates a solution for sustainable farming systems. CEZ Group is testing and evaluating the properties and suitability of various types of panels intended for use in the upcoming development of large solar parks. Additionally, CEZ Group is currently testing floating solar power plant technology in the pumped-storage power station Štěchovice. In the pilot stage, the installed capacity is 87.36 kWp. Overall, the upper reservoir could house solar panels with a capacity of up to 2.5 MWp.
Nuclear Power
Nuclear power plants are a part of a carbon-neutral and stable portfolio. CEZ Group takes measures to increase their efficiency to ensure stable and reliable operation, such as the renewal of equipment and modernization of Dukovany Nuclear Power Plant. Between 2020 and 2021, separators at Temelín were replaced, increasing the output to 2×1086 MW and saving thousands of tons of CO2 emissions every year. Thanks to excellent maintenance and efficient management, the two nuclear power plants, Dukovany and Temelín, reached the highest daily production in history in December 2022, producing 1,639,647 MWh. In total, they produced 31.02 TWh of emission-free electricity in 2022, which is an increase of 0.94% year-on-year and also the highest ever annual production.
Since the launch of the T30T program in 2017, we aim to consistently achieve production of at least 30 TWh by nuclear power plants per year while maintaining safe and stable operation. In the coming years, we plan to increase nuclear emission-free production by another 2 TWh in some years (depending on the maintenance outage schedule) and aim for a 60-year lifetime.
We have gradually modernized and upgraded both nuclear power plants and managed to safely increase the output of both key nuclear sources without any emissions or land acquisitions otherwise necessary for the construction of new power plants. Currently, the Dukovany and Temelín plants supply emission-free power to the grid, covering more than 40% of the Czechia’s total annual consumption.
Another key element of the plan to strengthen Czechia’s energy security and self-sufficiency is the upcoming construction of a new nuclear unit in Dukovany. A tender for a contractor was announced at the beginning of 2022, and at the end of the same year, ČEZ, a. s., received a total of 3 bids for the completion of the nuclear unit at Dukovany. The bids are under evaluation. At the same time, preparations for the construction of a small modular reactor (SMR) accelerated. The most significant activities include the start geological surveys of the site and include the signing of a Memorandum of Understanding among ČEZ, a. s., the South Bohemian Region and ÚJV Řež, a. s., which established the South Bohemian Nuclear Park.
Gas
Gas plays an important role in the energy transition by allowing a gradual coal phase-out. A quarter of the total CO2 emissions in Czechia is generated by heat production, which historically relied heavily on coal. The transformation of CEZ Group’s heating plants is one of the key areas to achieving our environmental commitments and low-emission production that we have set out in our strategy VISION 2030—Clean Energy of Tomorrow. By 2030, all district heating facilities owned by CEZ Group (incl. the largest source of district heating in Czechia, the Mělník facility) will produce heat only from low-emission sources.
Heating Sector Transformation
CEZ Group plans to invest an estimated CZK 30 to 40 billion in transforming heating sites into low-emission ones in the coming years, including Mělník facility as the significant part of the transformation. The first step in the planned transformation was the shutdown of Mělník III (2021), the largest coal-fired power plant unit of Mělník facility. Its closure transformed the site into a pure cogeneration plant, resulting in both higher energy efficiency and emission reduction. At the same time, preparations are underway for the construction of high efficiency combined cycle gas turbine (CCGT) plants, where we aim for EU taxonomy-alignment. The site is expected to use other low-emission technologies in the future, such as biomass boilers, heat pumps, and waste-to-energy facilities. These will gradually replace the cogeneration plants Mělník II and Mělník I. The Mělník II lignite unit will operate partly as a backup source until its shut-down. The existing coal storage yard of the Mělník III facility will be converted into a photovoltaic plant. These planned environmental measures will not affect the quality of heat supply to customers.
As coal-fired power plants are being phased out, buildings that are no longer useful will be demolished, generating large quantities of waste. CEZ Group is conducting pre-demolition waste screening to identify recoverable and hazardous waste before demolition starts, and the demolitions will be performed to maximize material recovery.