Innovative Solutions

The current emphasis on environmental protection is accelerating the need for energy savings. Smart solutions, advanced technologies, and digital transformation reduce energy consumption. Supporting innovations and digitalization corresponds to our strategy of VISION 2030—Clean Energy of Tomorrow.

ČEZ ESCO and its subsidiaries offer sustainable products and services that help customers reduce their carbon footprint and increase energy efficiency. CEZ ESCO fully aligns itself with the VIZE 2030 - Clean Energy for Tomorrow goals and helps customers reduce CO2 emissions and realize energy savings.

One of the products offered is Emission-free electricity, which assures customers that electricity comes only from CEZ Group's nuclear power plants. Another product is Photovoltaics for 1 CZK, which allows customers to purchase a photovoltaic power plant without an initial investment, thus supporting clean energy production. ČEZ ESCO covers all costs, and the customer pays only for the green electricity consumed.

In 2022, ČEZ ESCO started to offer a modernization service of public lighting and a comprehensive electric vehicle charging solution for the corporate and public sectors and development projects. It is also developing new products to address the impacts associated with the energy crisis. CEZ ESCO is committed to reducing emissions, implementing a decarbonization strategy for its subsidiary EP Rožnov, and leading decarbonization teams for clients such as Liberty Ostrava and US Steel. It also educates clients on self-sufficiency and innovative technologies and is part of the Alliance for an Emission-Free Future, which emphasizes the importance of transitioning to a zero- or low-emission economy while remaining competitive. We are also developing new opportunities in the areas of green steam, heat pumps, innovative cogeneration combined with hydrogen, batteries or CPC (Carbon Performance Contract) projects.

The core of ČEZ ESCO’s business is the implementation of ecological and energy-saving technologies, which improve energy efficiency. Notable achievements in 2022 are listed below:

• Modernization of one of the largest hospitals in Czechia:  Thomayer Hospital in Prague: The largest energy-saving project in Czechia saves the hospital up to CZK 7 million annually in operating costs and reduces CO₂ emissions by 2,500 tonnes.
• Construction of the largest rooftop photovoltaic power plant in Prague for the Prague Congress Centre: Installation of 2,080 solar modules, which saves more than CZK 5.5 million annually and contributes to the generation of clean energy.
• 32 active Energy Performance Contracting (EPC) projects: EPCs provide energy services with guaranteed financial savings. Customers saved CZK 304 million and the equivalent of 45,400 tonnes of CO₂

ČEZ ENERGO has created a new communication and control infrastructure to provide Frequency Reserve Restoration (FRR) infrastructure and dispatching services for ČEZ ESCO and its customers. And ČEZ Energo’s 109 CHP units are certified for the FRR project, which is now in the implementation phase. As a flexibility aggregator, ČEZ ESCO, in cooperation with CEZ Group's trading unit, also provides communication between the support service provider and the transmission system operator ČEPS.

In VISION 2030—Clean Energy of Tomorrow, CEZ Group commits to large-scale digitalization of distribution networks. The company wants to deliver the best customer experience in the market and bring all key customer processes online by 2025.

The CEZ Group digitalization program follows the National Action Plan for Smart Grids and requirements of the State Energy Policy. The digitalization program and its solutions will benefit renewables, energy storage, e-mobility, and new related services.

The CEZ Group digitalization program follows the National Action Plan for Smart Grids and requirements of the State Energy Policy. The digitalization program and its solutions will benefit renewables, energy storage, e-mobility, and new related services. The program focuses on two primary areas:

1. transforming distribution networks into smart automated networks,
2. transforming and digitalizing internal processes.

Modernizing CEZ Group distribution will require massive investments: smart digital electricity grids and fiber-optic networks account for most of them. For example, the company develops optical infrastructure to simplify remote control of stations and fault detection. Smart elements enable automation, which is the key to remotely controlled components and distribution system monitoring. Eventually, such smartification significantly reduces the failure rate and increases the reliability of the power supply.

ČEZ Distribuce, a distribution system operator, spent CZK 14.6 billion on network modernization in 2022 (9% increase year-on-year). Between 2023-2025, ČEZ Distribuce plans to invest more than CZK 15 billion annually to ensure a high-quality and stable electricity supply. In the short term, the company wants to start implementing systems for metering, control, and management of nodal and loop distribution stations. ČEZ Distribuce envisions becoming a leader in digitalization and thus contributing to the decarbonization of the Czech energy industry.

CEZ Group also supports digitalization in its internal processes, e.g., in the legal area.

In CEZ Group, R&D is mainly performed by the Research Centre Řež (RCŘ) and the ÚJV Řež. The RCŘ is a research organization focused on research, development, and innovation in the energy sector. The main research infrastructure consists of two nuclear research reactors and a set of laboratories and experimental facilities, including hot cells, experimental loops, and facilities for nuclear fusion research. The ÚJV Řež focuses on services and research for operators and manufacturers of energy equipment (especially nuclear power plants), on radioactive waste treatment, and on diagnostic radiopharmaceuticals for positron emission tomography. The ÚJV Řež is active in the development of hydrogen technologies for energy and transport. Both organizations are involved in many international research projects and activities, such as the EU Framework Programmes, the International Atomic Energy Agency, and the OECD/Nuclear Energy Agency.

In 2022, total R&D operating expenditures reached CZK 982.1 million (3% increase year-on-year), of which subsidies formed 44%. Details about specific projects, results, and memberships are available in the CEZ Group 2022 Annual Financial Report.

Inven looks for start-ups in Europe and Israel, a country with an extensive start-up community. The companies Inven invests in are fast accelerating businesses with a potential to create great impact or enable other businesses to be impactful.

All start-ups funded by Inven Capital engage in sustainable development and strive to be driving forces in their industries. They either change the way existing industries operate or create new hi-tech products. Inven portfolio companies have launched green projects related to hydrogen technology, solar energy, energy efficiency and savings, e-mobility, etc. Some of them are regularly included in the Global Cleantech 100 survey conducted by the consultancy Cleantech Group.

Being part of CEZ Group, start-ups can draw on extensive expertise in the energy sector, technology synergies, and client base. At the same time, the know-how and innovation of start-ups brings a huge added value to CEZ Group.

In addition to financial factors, Inven Capital regards sustainability as an essential part of its investment strategy. Inven Capital is a member of Leaders for Climate Action (LFCA), an international initiative that fights global climate change by decarbonizing its member companies. As an LFCA member, Inven Capital commits to including a sustainability clause in new investment contracts.

In 2021, Inven Capital joined VentureESG, a community of European venture capital funds, striving to consolidate ESG principles for sustainable investments. During 2022, Inven Capital developed its own ESG framework and an evaluation tool to assess and monitor its portfolio companies throughout the whole investment process. Inven Capital continuously supports portfolio companies in developing and applying ESG best practices.

Inven Capital itself operates in an eco-friendly manner. In 2021, the company became the first holder of a carbon-neutral business certificate in CEZ Group.

We are building an open innovation ecosystem in CEZ Group as well as outside: our goal is to develop and provide modern, efficient, and useful solutions for customers in B2B and B2C segments. Decarbonization, cost savings and digitalization of processes are our long-term focus areas in our development plans. These development plans are in synergy with our partners. We have professional partnerships with companies within CEZ Group (ČEZ ESCO, ČEZ Prodej, Inven Capital, and others) as well as outside. We can share innovative know-how to create new products and services with high added value.

We seek memberships in professional associations, societies, and platforms connecting experts on innovations. Examples of our involvement include professional relationships with Electric Power Research Institute, vgbe energy e.V., and Sustainable Nuclear Energy Technology Platform.

We are active or co-founding members of platforms that bring together entities from the energy, hydrogen, automotive, and research sectors to support e-mobility development, such as the E-mobility Platform or the platform of the National Action Plan for Clean Mobility.

We also draw innovative inspiration from outside the energy sector. For instance, we participate in the Innovation Roadshow and are founding members of the I2US cooperation platform. Together with other Czech and international innovation leaders, we share our experience and use the knowledge gained for our innovations. This helps us benchmark our activities, share lessoned learned, and it has a positive impact on our effectiveness.

Our primary mission in e-mobility is to co-develop and support sustainable transport ecosystem in Czechia. Our vision is that end-product is easy to use and enables the end user to travel sustainably and conveniently.

We are trying to achieve this through our presence in all parts of the e-mobility value chain where the end user meets any form of energy interface: (1) public charging infrastructure; (2) e-mobility service provider, and (3) supplier and operator of the private, home or office, charging infrastructure.

Public charging infrastructure is a major contribution of CEZ Group to the sustainable transport development. We are the largest charging point operator (CPO) in Czechia with over 515 public charging stations (over 1,500 charging points), most of which are DC (direct current) or HPC (high power charging) chargers. In 2022 alone, we have installed 126 charging stations and opened six charging hubs with 12 or more charging points.

We develop the network in line with our strategy to primarily enable and support intercity travel in electric vehicles, and we are focused on high performance charging hubs. By 2025, we plan to have 800 charging stations with over 60 MW of installed capacity.

This strategy directly supports Czechia in delivering the obligations set by Alternative Fuels Infrastructure Regulation (AFIR). Besides supporting regulatory targets, our strategy also:

• Provides a stabilization factor to renewable power production as the demand for fast charging in charging hubs (i.e., day hours) strongly coincides with the solar power production (as suggested by evidence from more developed e-mobility markets)
• Responds to customer demand for fast charging based on the evidence from our existing chargers (75% of charging sessions are ultrafast in locations with a choice of available charging speeds)

By building the public charging infrastructure, we make the sustainable and climate-friendly mobility available even for people without the possibility to charge at home or at work. As our public charging network is robust and supplied by 100% renewable energy, we support the penetration of EVs and contribute to faster transition towards BEVs. We fully support interoperability to make charging of electric vehicles a flawless experience. Connectivity is key in delivering this experience, since it provides significant benefits for urban e-mobility solutions and long-distance travelling, it leads to customer satisfaction with sustainable charging services provided. Our FUTUR/E/GO charging service is fully interconnected (roamed) with other CPOs in Czechia, with clearly defined steps towards future provision of our services abroad as well.

Our strategy is to offer a product with a single identity, which is driven by 100% sustainable energy and leads to an extraordinary customer experience, helping us achieve the TOP 3 rating in e-mobility provider (EMP) services in Czechia.

We provide open access to our physical charging infrastructure to other EMPs on a non-discriminatory basis, enabling smooth charging experience for local, inter-city and cross-border travel independent of drivers’ e-mobility service provider.

We are a proud founding member of the E-mobility platform, an association of major representatives of the e-mobility ecosystem in Czechia. The mission of the platform is to open and moderate public discussion on e-mobility-related topics including but not limited to vehicle affordability, availability of charging services, support of education, innovation, and research. The ultimate goal of the platform mission is to help create a favorable environment for the development of a sustainable transport ecosystem.

We are also an actively participating signatory of the Memorandum on Cooperation in the Development of Electromobility in Czechia. The memorandum defines main areas of cooperation among the relevant governmental ministries, state owned companies responsible for road and railway infrastructure development, and companies invested in the development of charging infrastructure and production of electric vehicles.

Our energy-saving commitments, which are described in the CEZ Group Energy Policy and approved by the Board of Directors, set the framework for energy management and efficiency. Fulfilling these commitments will also help us achieve our target to reduce our CO₂ emission intensity (from 0.38 tCO₂e/MWh in 2019 to 0.16 tCO₂e/MWh in 2030).

Since 2015, the Energy Management System (EnMS) has been a key tool for energy savings in CEZ Group. EnMS fully aligns with the Environmental Management System (EMS), and together they help fulfill our responsibilities.

Since 2015, the Energy Management System (EnMS) has been a key tool for energy savings in CEZ Group. EnMS fully aligns with the Environmental Management System (EMS), and together they help fulfill our environmental policy. In particular, EnMS aims to:

• improve energy efficiency
• optimize operations
• reduce greenhouse gas emissions

EnMS follows the ISO 50001 standard and is set up at most of our sites. Alternatively, regular audits are carried out. Regular internal and external EnMS audits check that energy management requirements are met. Every year, the EnMS – its conditions and targets - is subject to a second review by the management and in case of a significant change (e.g., new technologies and inputs), the EnMS conditions or targets are reviewed.

We have targets and action plans for energy savings at sites with EnMS and regularly monitor energy flows critical to overall energy efficiency. We review our energy consumption annually and evaluate progress against energy targets and action plans. In 2022, while CEZ Group’s total energy consumption decreased by 2% compared to 2021, the energy intensity ratio increased. This was due to more energy-intensive condensing production of heat sources in the winter months, when gas supplies were limited, and electricity demand was high. Condensing production also led to an increase in water consumption for cooling.

Employees at sites with an implemented EnMS receive training (in person or online) at least once every two years. Employees learn about energy consumption indicators in office buildings and different technologies, including energy efficiency indicators, and find out how to approach them responsibly. Our suppliers performing site-specific activities also attend EnMS training. In their case, the training primarily focuses on becoming familiar with energy management requirements.

In line with the Czech National Energy Efficiency Action Plan, we implement energy efficiency initiatives with our customers. We install modern technologies, smart products, and systems that intelligently manage energy consumption. We also raise customer awareness of energy savings through information campaigns.

Below are the major energy-saving projects we implemented for our customers in 2022:

• high-efficiency cogeneration of electricity and heat
• heat pumps in residential buildings
• energy services with guaranteed financial savings
• energy-efficient lighting in non-residential buildings
• energy-efficient outdoor lighting in industrial premises

In the next few years, we will focus primarily on digital transformation and decentralized energy generation. Seeing digitalization as a driver for lower energy consumption, we have set a target to cover 80% of consumption with smart meters by 2030.