Madeta and ČEZ to build a CZK 100 million steam pipeline in Jindřichův Hradec, Czechia, supplying 80 TJ a year

Madeta, the largest dairy in the Czech Republic, will build a steam pipeline that will supply energy to the company’s plant in Jindřichův Hradec from August 2024. It will run from the Jindřichův Hradec Energy Centre, which is part of the ČEZ Group and burns biomass. The investment will cost CZK 100 million and will be paid for by Madeta. The pipeline will be 2.5 kilometres long and will supply Madeta with 80 terajoules (TJ) of steam a year. Representatives of ČEZ and Madeta, who signed the construction agreement today, told journalists. Work will begin around the turn of the year.

Madeta expects its energy costs to rise by CZK 46 million year on year next year. The dairy’s annual energy costs are around CZK 400 million, Madeta CEO Milan Teplý said today in response to a question from the Czech News Agency.

“We currently produce steam here and heat our boilers with gas. During the periods when we were deciding whether to go ahead with the pipeline, there was a time when it was unclear whether there would be enough gas. We were terrified that we would be lighting candles and heating with a log in the middle of the living room. Things turned out a little differently, but even then we thought the steam produced would be financially attractive, secure and environmentally friendly, so why not go for it,” Teplý said.

Madeta is continuing its efforts to use more environmentally friendly inputs in production, he said. At the same time, it is strengthening its energy security and seeking to replace energy sources with unstable prices. “At the moment, we produce steam at our own boiler house in Jindřichův Hradec, where we use gas for heating. We will replace it with steam supplied by the Energy Centre. We will start building the pipeline around the turn of the year and expect to commission this investment next August,” Teplý said.

The average temperature of the steam in the pipeline will be around 180 degrees Celsius. Most of the pipeline will be underground. Madeta has an agreement with ČEZ under which ČEZ will buy the pipeline from the dairy roughly two to three years after its completion.

“The cooperation between the Energy Centre and Madeta in Jindřichův Hradec on the supply of biomass-based steam shows that energy self-sufficiency can be strengthened and energy costs reduced by finding solutions that are both effective and sustainable,” ČEZ Vice-Chairman of the Board Pavel Cyrani said in a press release about the project.

At its Jindřichův Hradec plant, Madeta mainly makes dairy desserts such as Lipánek, as well as curd cheese, yoghurts, sour cream, cottage cheese and Romadur cheese. Teplý said the food industry is under considerable pressure at present, with the dairy sector among those facing the greatest pressure. “We heat milk and then immediately cool it again, so energy consumption is enormous. And even today, we still have no idea what our energy requirements will be in 2024,” Teplý said.

Last year, Madeta’s revenue from sales of products, services and goods was CZK 7.23 billion, up 21.7 percent year on year. After-tax profit fell by 14 percent to CZK 212.9 million. The company described last year as very difficult. This is according to its annual report. The dairy’s return on sales fell by almost 30 percent last year. Madeta has four production plants: in Planá nad Lužnicí, Český Krumlov, Jindřichův Hradec and Pelhřimov. It employs 1,500 people and processes nearly one million litres of milk a day.

The Energy Centre, a member of the ČEZ Group, supplies the city’s two largest housing estates, Vajgar and Hvězdárna. It was established as an energy source for the Jitka textile company, meeting its heat and electricity needs. After 2002, the boilers were refurbished, and biomass replaced the previously used fuel oil and natural gas. Two biomass boilers use straw, hay and rapeseed to produce 40.000 megawatt-hours of electricity and 100.000 GJ of heat a year.