Czech solar lobbyists were able to open bottles of expensive champagne over the weekend, as the way to another solar Klondike, which will provide them with multi-billion profits, was opened. At the same time, we have not even paid off the first solar tunnel, which, based on the crazy purchase prices of electricity (including an inflation clause) from intermittent energy sources (RES), will cost a trillion crowns between 2010 and 2030, of which 800 billion will be received by the operators of large solar sources. This is, among other things, the price for new nuclear blocks.
Czech households and businesses were upset that the government of the Czech Republic returned the fee for renewable energy (POZE) in the amount of CZK 0.60 for each kilowatt hour consumed to the regulated component of the electricity price from January 2024, when the state budget took over during the energy crisis. Unfortunately, however, it is only a “pledge” for new payments, which are certainly awaiting Czech taxpayers, either directly in the price of electricity or through tax contributions to the state budget. On April 11, the European Parliament approved the reform of the European electricity market (https://www.europarl.europa.eu/news/en/press-room/20240408IPR20316/parliament-adopts-reform-of-the-eu-electricity-market ). As part of it, solar and other RES received permission to use so-called contracts for difference. Producers of energy from new solar (FVE), wind (VTE) and other renewable energy sources actually receive a guaranteed purchase price thanks to these contracts.
This is to ensure the existence of these resources in an energetically uncertain situation, when the state, i.e. the taxpayers, will reimburse the producer if the electricity prices are too low, and on the contrary, the producer will compensate the state, i.e. the customers, for its excessively high electricity price. These contracts make sense for such capital-intensive investments with syndicated loans, such as typically nuclear energy, where, however, after 20-30 years of depreciation, with the life of the new blocks of 80-100 years, this investment will return richly with huge profits. This principle will also be applied during the construction of new nuclear units in Dukovany and Temelín. As the analysis of the world’s best investment fund Bank of America stated last May (chrome-extension://efaidnbmnnibpcajpcglclefindmkaj/Odkaz), nuclear energy is by far the best investment in all aspects, on the contrary, according to the 2nd largest US bank, solar and wind sources are inefficient and cannot exist without “perpetual endowments”.
Now, however, in the leadership of the European Union, where until now the green and left-wing majority gnashed their teeth and accepted the nuclear renaissance in 11 member countries under the leadership of France, which put peaceful energy from the atom on the same level as renewable energy sources, the aforementioned dirty compromise has been accepted. If you want CFDs on the core, you have to enable them on OZE as well. What is the immorality of such a solution? While, according to official statistics, nuclear sources work reliably 83% of the time in a year, unreliable, intermittent and unstable solar power plants only 13% of the time. This is clearly evident from the fact that last December the installed PV capacity as large as the Temelín NPP contributed 0.53% to the net production and consumption of electricity (the Dukovany and Temelín NPPs together accounted for 40%). Therefore, according to the intention of green planners everywhere in the EU, the capacity of FVE and VTE is to be fundamentally increased, so that those miserable fractions of a percent in the winter time of (non)production are at least partially increased to units of percent. As the Chief Economist of ČEZ Pavel Řežábek stated at the Energy Business Forum on April 16 in Prague as the correct vision for the Czech Republic for the year 2030, ČEZ already sees a solar capacity of 15 GW (2.15 GW in December 2023 so far according to ERÚ) and 3 GW in wind (so far 0.35 GW), of which ČEZ wants to build 6 GW within six years. The more sober National Energy and Climate Plan (MKEP) “only” calculates a fivefold increase in the current situation to 10.1 GW in FVE and 1.5 GW in VTE.
So let’s project the vision of the NKEP for the year 2030 for a nice summer day, which can easily happen again at Easter. The power of 4.3 GW from nuclear power plants will run at full power, which cannot be shut down or reconnected quickly, so for 10 GW of power (not to mention the power of 15 GW considered by ČEZ) there will be no market at home or abroad (overproduction is and will be everywhere in neighboring countries) inquiry. In order to prevent the grid from collapsing, most of the electricity production from PV plants will probably have to be shut down and fail. However, thanks to the contract for difference, solar owners will be paid for it as if their FVE (or VTE) were fully producing. Well, isn’t it a wonderful business? OZWE owners will also receive 50% of subsidy money for the installation of these unstable sources and then, thanks to guaranteed purchase prices, operational subsidies in guaranteed production prices. Entrepreneurial risk of projects repayable in a few years? Zero. At the same time, it is clear that the “big boys” in the solar business will fundamentally make it difficult, rather impossible, to overflow from absurdly large installations on family houses, whose owners naively thought that they would still value their subsidized investment by selling excess production. For Czech lobbyists, the model of another solar tunnel is Germany, which last year paid 320 billion CZK in guaranteed purchase prices to the owners of FVE and VTE, this year the payment is expected to be 430 billion, and in the following years, with the increasing capacity of RES, over 500 billion crowns per year.
To make matters worse, the newly planned gas-fired electricity sources (PPE) in the Czech Republic, where the NKEP plan envisages one extra large PPE, which should only be in operation for a limited period of the year as a “reserve” for intermittent RES, will be built by private investors only under the condition that they will receive so-called capacity payments. The state (or, of course, always only the taxpayers) must pay them the difference between the actual costs and revenues from the regulatory limited production, even with the profit. All of this will be framed by apparently unpayable investments in inefficient battery storage, as well as the need to invest 281 billion crowns in the strengthening and management of transmission and distribution networks by 2030 due to RES. However, this will not be enough and it will be necessary to “react on the demand side”, i.e. there will be a fundamental regulation of consumption, when the energy prosperity consisting in the fact that households and businesses could draw electricity freely 24 hours a day, according to their power consumption at the circuit breakers, will come to an end.
While the government and parliament are wasting energy and subsidizing projects on completely marginal projects of “community energy” in terms of energy, the collapse of coal-fired power generation destroyed by speculative emission allowances, i.e. taxes on CO2 production, is rapidly approaching in the Czech Republic without replacement of reliable sources. All of this will have a major impact on the growth of the price of electricity, including dependence on imports in winter, possibly even one third of consumption. At the same time, the government of the Czech Republic, caught in the trap of lobbied dependence on RES, is doing without an innkeeper: similarly to Germany, the departure of industrial companies from the Czech Republic, which cannot accept the energy prices and the uncertainty of stable supplies, is starting and they are looking for better conditions in the USA or Asia. Without industry, the Czech Republic can forget about prosperity.
The public in the Czech Republic should appeal to their politicians, MPs and senators not to allow another and possibly even bigger solar tunnel at a time when the first one has not even been paid off. This would undoubtedly lead to a fundamental disruption of the entire social order of the republic. The energy market reform has yet to be approved by the European Council at the level of heads of government of EU member states. How will the Czech Prime Minister behave?
