ČEPS changes its mind: Closing Chvaletice will no longer threaten the Czech grid

The possible closure of the Chvaletice and Počerady coal-fired power plants would not threaten the Czech transmission grid. This is the finding of an updated analysis by ČEPS, which revised its original assessment that two of Chvaletice’s four units would need to remain temporarily in operation to ensure the safe operation of the grid, requiring compensation of more than a billion crowns next year. The Energy Regulatory Office (ERÚ) announced the findings today.

Last November, Pavel Tykač’s Sev.en Group announced that it would shut down the Počerady and Chvaletice coal-fired power plants and the power plant and heating plant in Kladno this December, or by March 2027 at the latest. It cited the prospect of sustained losses due to projected electricity and emissions allowance prices. However, in light of current market conditions, the group has said in recent months that it plans to 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 output 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 in operation. The regulator subsequently opened administrative proceedings that could require the operator to keep the units running in return for financial compensation.

However, external conditions have changed substantially since the start of the year, according to the ERÚ, so as part of the administrative proceedings it requested an updated analysis from ČEPS. The ERÚ said the analysis found that the grid could be operated securely without Chvaletice through technical, operational and coordination measures.

"The administrative proceedings are still ongoing, but they will probably be concluded without requiring the Chvaletice power plant to continue operating. Thanks to recent developments and measures by ČEPS, the grid could be operated securely without the need to compensate the plant for continued operation. This step should also have a positive effect on regulated electricity prices and ease upward pressure on them. For next year, we are talking about savings of more than a billion crowns, which consumers would otherwise have to pay," said ERÚ Chairman Jan Šefránek.

Environmental group Hnutí Duha welcomed the news, saying it was good news especially for electricity consumers. "An order to keep the plant running would mean that we would all pay Pavel Tykač for loss-making operations—and pay enough to make a profit, at that. We also welcome ČEPS’s proactive approach in taking measures to replace all the potential functions of the two units at Chvaletice," said the group’s energy programme director, Jiří Koželouh.

This year, the ERÚ also addressed the related threat of the Kladno Heating Plant ceasing operations. Although ČEPS’s January analysis did not classify its operation as essential 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 for the heating plant to continue operating temporarily.