Poll: What is the optimal generation mix for the Czech Republic, and does it include nuclear? (4/4)

In cooperation with students of Security and Strategic Studies at Masaryk University, we interviewed four figures from different areas of the Czech energy sector. In this series of views on the future of Czech energy, we present their perspectives on the optimal energy balance for the Czech Republic in the coming years and their views on the construction of new nuclear capacity.

The fourth respondent whose views we are publishing is Milan Vaněček, a researcher at the Institute of Physics of the Czech Academy of Sciences, now retired. He worked on spectroscopy, materials research, nanotechnologies and photovoltaics.

Our country’s energy balance can be divided into two parts: essential and non-essential. We should secure the essential part needed for the operation of industry, agriculture, transport, large cities, healthcare and public administration ourselves in the Czech Republic. With the transition to widespread electrification and increased energy savings, we will be able to reduce oil imports and, after 2040-50, gas imports as well, when considering all energy.

The much smaller, non-essential part of the energy sector (enabling “greater comfort”) is best left to the market within the EU. Of course, even the essential part will operate in price terms within the EU single market.

Maintaining the current permanent long-term export of electricity (by which I do not mean short-term imports/exports as part of mutual assistance) is economically disadvantageous for the Czech Republic and has no added value; exporting energy systems is advantageous.

As part of the EU, we must join its efforts to phase out coal-fired power plants. Given the high share of coal-fired power plants in electricity generation, this will be difficult for us (as it will be for Poland). Any acceleration of the coal phase-out will entail additional costs. I see no reason why the Czech Republic should get rid of coal capacity faster than Germany. Nevertheless, the move away from coal is logical and inevitable.

And compared with Germany, we will have two major advantages:

• we will retain two nuclear power plants (until the end of their operating lives, around 2037 and 2052, or possibly both for 10 years longer),
• unlike Germany, which had already achieved more than half of its electricity generation from renewable sources in 2020, i.e. it built photovoltaic power plants (PV) and wind power plants when they were capital-intensive, we will build them at a time when they are becoming ever cheaper to invest in (and are by far the cheapest to operate). It is only necessary to end the high subsidies for photovoltaics from 2009-10, which distort competition (“overcompensation”), and whose review and remedy the EU is requesting (as Spain and France have already done).

For energy self-sufficiency in basic electricity consumption, in line with

• global developments,
• annual technological progress in renewable electricity sources, especially PV and wind power,
• EU efforts to meet the Paris climate agreements,

we should primarily build a new, modern energy system based on photovoltaic and wind power plants combined with storage (hydropower, batteries, and in the future also storage from the growing number of electric vehicles), with supplementary flexible generation from biomass, biogas, consistent combined heat and power generation in gas-fired power plants during the winter period, and, as a medium-term solution (for around 30 years), an increase in the number of flexible gas-fired and combined-cycle gas power plants.

We do not need additional nuclear power plants, just like Switzerland, Spain, Belgium, the Netherlands and Sweden. These are all countries that have decided to let their old nuclear power plants reach the end of their service life and not build new ones.

The world’s most economically advanced countries are proceeding in this way. Building new energy sources presents major technical challenges for the regulation of these sources and the optimisation of generation and producer-consumer relations. In the age of computers, automation and emerging artificial intelligence, this challenge has a technical solution, and our advantage will be the use of foreign experience from countries that already have experience with much higher levels of deployment of intermittent renewable sources such as PV and wind power.

An advantage of deploying PV, wind power and battery storage is the possibility of gradually installing increasingly powerful and cheaper equipment, something unavailable in the current construction of nuclear power plants (Generation III+). Battery storage in the Czech Republic is a reality; all carmakers producing vehicles in the Czech Republic have opted for it. One million electric vehicles can store roughly 50 GWh of electricity = the daily generation of two Temelín reactors. Flow batteries will be even more economically advantageous. Existing and newly built pumped-storage power plants will complement this new storage.

This question is currently unnecessary. But my academic answer is as follows: security risks would not increase through the participation of suppliers from Russia or China; I would not exclude them from the tender. The risks are already quite high at present, after all, our nuclear power plants were built according to Russian documentation, use Russian fuel, and Plzeň-based Škoda JS, which carries out a range of servicing work at them, is Russian-owned.

This is the critical point of all considerations about the future energy concept worldwide, and therefore also in the Czech Republic: what will the current and future economics of construction and operation be? Price relationships from the past are no longer valid; arguments based on prices from 10 or 20 years ago are entirely misleading compared with current reality in the world and the European Union. The capital cost of large PV plants has fallen to roughly one-seventh of its level in 2009-10 over the past 10 years. The latest price map (2021) for PPAs (power purchase agreements) in EU countries is, for example, available here.

These are electricity prices from large photovoltaic and wind power plants respectively (a long-term contract, typically for 12 years). These are commercial prices, below 50 EUR/MWh, without state subsidies, offered in 2021. Prices with which electricity from new nuclear plants being built or prepared for construction in the EU cannot compete at all. PPA prices in the US are even lower.

This means that large-scale (“utility scale”) wind and PV plants can be built on a purely commercial basis, without state assistance (direct or indirect subsidies), meaning that the state bears no financial risk.

By contrast, a new nuclear power plant project in the European Union is highly economically risky. And according to forecasts by reputable economic agencies (Bloomberg New Energy Finance, Lazard’s), electricity prices from PV and wind power will fall by a further half by the end of this decade. That is much sooner than the Czech Republic could have a new nuclear power plant built by foreign suppliers.

In the case of implementing Dukovany nuclear power plant 2, this would therefore mean: the most expensive possible investment, subsequent electricity generation at prices significantly above those in our region, and thus saleable only with the help of a state subsidy (which may not even be permitted in the EU). The more this nuclear power plant generates, the greater the economic loss for its owner.

Economic risk is also posed by the “Fukushima effect”. The Level 7 accident at Fukushima nuclear power plant shut down all nuclear power plants in Japan (more than 50 reactors) for many years, and most of them will be permanently closed and dismantled. A single Level 7 accident in the EU could have the same effect.

Building outdated, only partially improved (in response to the consequences of the Fukushima accident) third-generation (III+) nuclear power plants makes no sense. It is necessary to wait and see what the new fourth generation brings and whether some of its concepts prove viable in practice. Safer, recyclable and several-times cheaper nuclear energy, if feasible, should not yet be written off. It will depend on further research into new nuclear reactors, primarily in the US, Russia and China.

As for electricity storage, it is generally accepted worldwide and already proven in practice that the trend towards battery electricity storage is being implemented and is readily scalable; its falling price follows a similar downward price trajectory to that of photovoltaic panels (whose price has fallen to one-tenth since 2010, while mass production of these panels has grown exponentially). The EU is currently building several “gigafactories” for lithium battery production and its first “gigafactory” for the most efficient photovoltaic panels.

As for proposals to regulate consumption (“sustainable consumption”), I believe this path is not realistic in our economic system and is counterproductive. Nevertheless, preventing waste and the need to achieve energy savings through appropriate technical measures are of fundamental importance for the energy sector and sustainable development.