Free allowances will not save Czechia's Chvaletice plant; closure remains on the table

The proposed free allocation of emission allowances, which the European Commission wants to maintain after 2030, is unlikely to affect the planned closure of the Chvaletice coal-fired power plant. Energy group Sev.en plans to shut it down this December, or by March 2027 at the latest. Two of its four units are expected to remain in operation in the coming years; according to transmission system operator ČEPS, they are essential for the secure operation of the Czech electricity system. Sev.en is waiting for the European Commission’s final decision, group spokesperson Eva Maříková said.

“So far, it seems that (the EC plan) will have very little or no impact on existing coal-fired power sources, including the Chvaletice power plant. At this point, our earlier position still stands: operating our coal-fired power plants is no longer economically viable,” Maříková said.

The Energy Regulatory Office (ERÚ) is negotiating with the power plant operator over compensation related to maintaining partial operations. ERÚ spokesperson Michal Kebort said the office is calculating the demonstrable loss associated with continued operation of the plant.

Chvaletice is the country’s youngest lignite-fired power plant and has been fully operational since 1979. Its installed capacity is 820 megawatts. It also produced small amounts of heat for Trnávka and Chvaletice, but those supplies have since ended and been taken over by ČEZ Teplárenská, which built gas boilers. Sev.en’s subsidiary Severní energetická bought the power plant from ČEZ in 2013 for 4.12 billion crowns. The plant made more than a billion crowns in profit in 2022, then posted a loss of 492 million crowns in 2023. Last year, its loss widened to 1.428 billion crowns.