ČEPS changes its mind: Chvaletice no longer needed for the Czech transmission grid

The potential closure of the Chvaletice and Počerady coal-fired power plants would not threaten the Czech transmission system. This is the conclusion of an updated analysis by ČEPS, which revised its original assessment that two of Chvaletice’s four units would need to remain temporarily operational to ensure the safe operation of the grid. This would have required compensation of more than one billion crowns next year. The Czech Energy Regulatory Office (ERÚ) reported this today.

Businessman Pavel Tykač’s Sev.en Group announced in late November last year that it would shut down the Počerady and Chvaletice coal-fired power plants, as well as the power plant and heating plant in Kladno, this December or by March 2027 at the latest. It cited the threat of sustained losses due to the outlook for electricity market prices and the cost of emissions allowances. However, in light of current market conditions, the group has indicated in recent months that it will extend generation at the Počerady and Chvaletice plants at least until 31 March 2027, and possibly longer. According to the Sev.en Group website, the plants have a combined installed capacity of around 2400 megawatts (MW), while the Kladno facility also has a thermal capacity of more than 950 MW.

In January this year, ČEPS recommended temporarily keeping two of the four units at the Chvaletice coal-fired power plant operational. The regulatory office then launched administrative proceedings that could require the operator to keep the units running in return for financial compensation.

However, according to the ERÚ, external conditions have changed significantly since the start of the year, so the office requested an updated analysis from ČEPS as part of the administrative proceedings. The ERÚ said the analysis found that the system could be kept secure even without Chvaletice, through a combination of technical, operational and coordination measures.

"The administrative proceedings are still under way, but are likely to be concluded without requiring the Chvaletice power plant to continue operating. Thanks to recent developments and the measures taken by ČEPS, the system could be kept secure without having to compensate the plant for continued operation. This would also have a positive impact on regulated electricity prices and ease upward pressure on them. For next year, we are talking about savings of more than one billion crowns, which would otherwise be paid by consumers," said Jan Šefránek, chairman of the ERÚ.

This year, the ERÚ also addressed the related threat of the Kladno heating plant shutting down. Although the January ČEPS analysis did not deem its operation necessary for the power system, the plant is also an irreplaceable source of heat for the entire city. The city eventually reached an agreement with Sev.en Group on the plant’s temporary continued operation.