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Czech Republic braces for difficult coal exit by 2033

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Prague, Czech Republic – The Czech Republic could be moving towards a more sustainable future. After years of hesitations, the new government of Prime Minister Petr Fiala (ODS) finally set a date for a Czech coal phase-out.

“We will create the conditions for the energy transition and development of coal regions to make the coal phase-out possible by 2033,” reads the Czech government policy statement, approved in early January.

Czech government announces 2033 coal phase-out date

In a move that took some commentators by surprise, the five-party coalition government did not follow the recommendations of the Czech Coal Commission, which suggested a 2038 exit. The commission’s work had however been harshly criticized by non-governmental organisations, who argued that its stance had no scientific base and was mainly driven by the industrial lobby. In 2020, when the Commission was expected to approve its final recommendations, the two NGO members even left the Commission.

“A clear word on the coal phase-out date is an important change in the approach of the new government compared to the previous government, which left citizens and companies in uncertainty. The 2033 declaration also definitively consigns to the dustbin of history the Coal Commission’s recommendation to keep coal until 2038,” said a former member of the Commission, Jiří Koželouh, who is an expert on energy from Hnutí DUHA – Friends of the Earth Czech Republic, a leading Czech environmental organization.

The Czech Republic follows similar steps taken by Germany. Not only did it establish the Coal Commission in the manner of its neighbour’s, but it also brought the expected date of coal phase-out forward. While the former German government aimed for 2038, the new cabinet led by Olaf Scholz (SPD) intends to close coal mines “ideally” by 2030.

Environmentalists remained cautious, advocating for an even earlier coal exit. The Czech Republic is among seven EU member countries that plan coal phase-out after 2030. Slovenia and Croatia also intend to shut down their mines in 2033, while Romania promised to meet this goal one year earlier. Bulgaria mulls 2038 or 2040, and Poland is sticking to its 2049 target.

Other states, including France, Italy, Sweden, and Spain, plan coal phase-out by the end of this decade.

“Across Europe, we see an accelerating shift away from coal, and we believe that the Czech Republic will eventually be able to phase out coal mining and burning by 2030 like other responsible and developed European countries. But even the 2033 deadline, which the government has now adopted, will have implications for current coal industry projects,” Lukáš Hrábek, spokesperson of Greenpeace Czech Republic, noted in a press release.

Hard times ahead

The Czech Republic currently produces around 40% of its electricity from coal. In 2019, coal also accounted for more than 25% of residential heating. Considering the high level of dependence, the envisaged change of the country’s energy mix will require massive investments and policy efforts.

In the Czech Republic, there are three coal mining regions – Ústecký kraj, Karlovarský kraj and Moravskoslezský kraj – which faced structural economic problems even before the current transformation efforts. Households in these regions are particularly vulnerable and could face rising energy poverty in the near future.

All three regions prepared the so-called plans of just transition. In these strategic documents, regional authorities drafted projects to boost their economic development. These plans will additionally give them access to the Just Transition Fund established by the European Union to support coal mining regions across the continent. For the three Czech regions most affected, around €1.6 billion are allocated in the fund.

Together with coal mining regions, the whole energy sector could face a revolution. The existing coal plants producing electricity and heating need to be replaced by sustainable energy sources, and the entire process now must speed up to align with the 2033 target.

Source: Eurostat

“According to analysis provided by [Czech Transmission System Operator] ČEPS for the Coal Commission, it is possible to end the use of coal in the Czech energy sector by 2033. This means replacing a higher number of coal-fired sources with gas-fired sources,” Ondřej Charvát, Czech Environment Ministry spokesman, told Kafkadesk. Besides natural gas, renewable energy sources and nuclear plants will become the backbone of the Czech energy mix.

With the more ambitious government’s plans for coal phase-out by 2033, the Czech energy sector remains cautious.

“There is no doubt that coal is coming to an end, but the date of the end of coal combustion in practice does not depend only on the decision of politicians,” Sev.en Group spokesperson Gabriela Sáričková Benešová emphasized.

Sev.en Group operates a wide range of energy business units, including coal-fired plants. The company will be directly affected by the forthcoming phase-out. “It is indisputable that the Czech energy sector cannot yet do without coal. In December, for example, coal-fired power plants produced almost half of the Czech electricity,” Benešová explained.

Renewables in question

“Our power plants will remain in operation as long as there is no adequate replacement for them in the Czech energy mix,” she added.

The transformation of the Czech energy sector will be primarily funded from EU funds. According to the Czech Environment Ministry, around €12 billion should be available in the Modernization fund financed from the EU’s Emission Trading System (EU ETS). Other funding will be provided by the EU cohesion funds and the state budget. Moreover, affected companies will have to support the transformation with investments of their own.

“We are preparing large-scale investments in renewable energy, storage, hydrogen and other innovations. However, as responsible energy managers, we also feel obliged to ensure stable, reliable and affordable energy for the people of the Czech Republic. Only in this case is it possible to end the extraction of coal and the production of energy from it,” Benešová from Sev.en Group said to Kafkadesk.

Still, experts are convinced that the country should close down the coal mines as soon as possible to avoid costs connected with the EU ETS. According to the International Energy Agency, the Czech Republic should quickly develop renewable energy sources as it is a much more viable solution than the expensive construction of new nuclear power plants. The Prague-based Association for International Affairs (AMO) shares such a view.

“In the long term, the scenario to phase-out coal by 2030 is the most economically advantageous because it brings significant financial savings compared to the slower phase-out, mainly due to savings on emission allowances that will have a positive impact on the whole economy,” a study by the think-tank reads.

According to the researchers, coal phase-out in 2030 would require a large wave of wind and solar power investments. However, the Czech government is sceptical and prefers to see nuclear energy as its top priority, arguing that the country’s geographical conditions are less favourable for the massive development of renewables, which today account for only 15% of electricity production (nearly 20 points lower than the EU average).

The announcement of an exit from coal by 2033 may be a step in the right direction. Now comes the hard part.

This article is published as part of a project to promote independent digital media in Central and Eastern Europe funded by the National Endowment for Democracy and coordinated by Notes from Poland.

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By Aneta Zachová

A journalist based in Prague, Aneta is the editor-in-chief of Euractiv.cz. You can follow her on Twitter here.

Headed by Kafkadesk's chief-editor Jules Eisenchteter, our Prague office gathers over half a dozen reporters, editors and contributors, as well as our social media team. It covers everything Czech and Slovak-related, and oversees operations from our other Central European desks in Krakow and Budapest.