ČEZ: Czech coal-fired power generation will become uneconomic around the turn of 2027 and 2028

According to current forecasts, electricity generation from coal at ČEZ power plants will become uneconomic around the turn of 2027 and 2028. The main reason is rising prices for emissions allowances, which by then are expected to cost more than the electricity generated. ČTK, the Czech News Agency, was told this by ČEZ Chief Financial Officer Martin Novák. ČEZ does not plan to close any coal-fired units this year.

"The economics of generation at coal-fired power plants are gradually worsening. A decline in operating profit is already evident in quarter-on-quarter comparisons," Novák said.

According to current analyses, coal-fired generation is expected to become definitively uneconomic around the turn of 2027 and 2028, Novák said. By then, an emissions allowance is expected to cost around 83 euros per tonne of carbon dioxide, while revenue from the electricity generated this way is expected to be approximately ten euros lower.

The government of Petr Fiala (ODS) previously said that coal-fired power generation in Czechia would end no earlier than 2033. However, Czech energy companies have acknowledged that rising costs will make a move away from coal necessary much sooner. ČEZ has long presented 2030 as its target for ending coal-fired generation, while other producers have announced possible closures of coal-fired units in the coming years.

The state plans to base the Czech energy mix in the future on nuclear and renewable sources. These will first have to be built, however. Until then, gas is expected to serve as the main transition fuel. ČEZ also plans to convert most of its coal-fired power plants to gas.

ČEZ is gradually preparing to scale back coal mining. Recent talks between representatives of the partly state-owned company and the Ministry of the Environment indicated that mining at the Bílina open-pit lignite mine in northern Czechia will end earlier, in 2033 rather than the originally planned 2035. According to ČEZ Chief Executive Daniel Beneš, this should also mark the end of coal-fired power generation in Czechia. He expects it to be the last coal mine or open-pit mine to close.