Czech state to support operation of 37 modernized district heating plants, with EPH and ČEZ among recipients

The state will support the operation of 37 modernized combined heat and power plants. Among the largest are the district heating plants owned by Daniel Křetínský’s EPH group in Opatovice and Komořany, the combined-cycle gas plant of the partly state-owned ČEZ in Mělník, and a new unit at Veolia Energie’s district heating plant in Ostrava-Třebovice. This is according to a report by the Ministry of Industry and Trade (MPO), which was highlighted today by Ekonomický deník. This was the first subsidy call, with further calls expected next year. The funding will go mainly towards modernizing the country’s district heating plants.

The MPO launched the first auctions for operating support for output from new or modernized combined heat and power (CHP) plants at the beginning of July this year. The aim of the overall program is to support electricity generation facilities with a total installed capacity of 3090 megawatts (MW). According to the ministry, the new facilities should help replace coal-fired plants.

Cogeneration units with capacities of 1.5 to 15 MW make up the majority of successful bidders in the first auction round. By contrast, support for electrical capacity is dominated by several large facilities. The largest is a new combined-cycle gas unit at Elektrárny Opatovice with a capacity of 390 MW, followed by the first phase of ČEZ’s combined-cycle gas plant near Mělník, with a capacity of 280 MW. The requested reference auction price ranges from 3838 Kč per megawatt-hour (MWh) to 4184,50 Kč per MWh. Most successful bidders chose natural gas for their modernized facilities.

According to Ekonomický deník, successful bidders will be entitled to receive the auction bonus for 15 years from the date their generating plant enters operation or its modernization is completed.

A total of 44 bidders applied for operating support in the first auction round. Three smaller facilities were excluded from the auction because they did not provide sufficient bank guarantees, while another four were unsuccessful because the maximum limit of 1280 megawatts of electrical capacity had been reached and the support they requested was relatively high.

The European Commission notified the state aid for electricity generation from new and modernized power plants capable of combined heat and power generation this spring. The measure is intended to help implement the Czech National Energy and Climate Plan and the European Green Deal, and to meet the EU’s energy efficiency target.