Modernization of Czech electricity grids will require CZK 476 billion by 2035

Modernizing the electricity grids in Czechia to accommodate the rise of green energy will require around CZK 475.7 billion by 2035. From this year, operators will have to increase investment by 38 percent to CZK 40 billion annually. The investments would increase economic output and household incomes. At the same time, they could boost public revenues and gross value added, and create thousands of new jobs. This is according to a study by Deloitte and calculations by the Czech Association of Regulated Electricity Companies (ČSRES), whose representatives presented the findings to journalists.

„The main benefit of the necessary investment in electricity grids is ensuring a stable electricity supply. Reliable and safe operation of the power system is a priority for all of us, but the economic benefits of the investments made are also significant,“ said ČSRES Council chairman Marian Rusko.

ČSRES brings together four electricity distribution system operators and the transmission system operator in Czechia: ČEPS, ČEZ Distribuce, EG.D and the PRE Group. ČSRES members’ investments are expected to contribute to GDP growth of 0.4 percent in 2023. From 2010 to 2023, ČSRES members invested an average of CZK 29 billion annually in infrastructure modernization. The association expects them to increase their annual investment to an average of CZK 40 billion from this year.

According to the study, investment is expected to increase the value of production by CZK 763 billion and public revenues by CZK 120 billion. „For every crown invested by electricity system operators, the state gains another two crowns. Investment in distribution and transmission systems will create an average of almost 21,000 new jobs, particularly in construction, manufacturing and market services. Households are also expected to feel the positive economic effects of increased economic activity and job creation,“ said Deloitte chief economist David Marek.

The European Union as a whole is expected to see a similar increase in investment. The European Commission has calculated that EUR 584 billion (CZK 14.5 trillion) will need to be invested in modernizing Europe’s energy grids by 2030. According to ČSRES, EU grants could cover some of the costs of Czech investment in modernizing electricity grids. However, the association says the current grant conditions are quite restrictive, so system operators make relatively little use of them. It is currently discussing securing additional funding with the Ministry of Industry and Trade (MPO) and the Ministry of the Environment.

Until now, support for investment by electricity system operators in the 2021–2027 period has been available through the Technology and Applications for Competitiveness programme, which allocated CZK 5 billion of its CZK 79.3 billion budget to them for the purchase of smart meters. Distribution system operators can also currently draw a total of CZK 6.7 billion through the MPO’s REPowerEU call.