Czech heat pipeline from Dukovany to Brno will not need European Commission state aid approval

Construction of a heat pipeline from the Dukovany nuclear power plant to Brno, planned by the municipal company Teplárny Brno in cooperation with ČEZ, will not need European Commission approval for funding from public sources. The State Environmental Fund, working with the Office for the Protection of Competition (ÚOHS), consulted the European Commission on the matter. The antitrust authority reported this in a press release. Construction costs for the heat pipeline are expected to reach CZK 19 billion.

"The Czech authorities consider this extension of the existing energy infrastructure of the heat network to meet the conditions for the existence of a natural monopoly. The European Commission’s Directorate-General for Competition confirmed this view. Project financing therefore does not constitute state aid that would require notification to the European Commission and a subsequent Commission decision authorising the aid," the authority said.

Construction of the heat pipeline was considered in the 1980s. At the time, low gas prices meant it was not economically viable. The consequences of Russia’s aggression against Ukraine changed those plans. The project is included in the spatial planning documents of the Vysočina Region, the South Moravian Region and Brno.

Construction costs for the heat pipeline are expected to reach CZK 19 billion. Teplárny Brno will be the main investor and aims to secure a grant of up to CZK 10 billion from the European Union for the project. The company says the heat pipeline will make heat production more environmentally friendly by reducing carbon dioxide emissions by up to 230,000 tonnes a year. ČEZ is expected to invest around CZK 3 billion of the total in building a heat exchanger station on the power plant site.

Last March, Teplárny Brno signed an implementation agreement for the heat pipeline with ČEZ, a partly state-owned company that operates the Dukovany power plant. Under the agreement, ČEZ will supply heat to Brno for as long as the Dukovany plant is in operation; in the future, the heat pipeline is expected to be connected to new nuclear units.