Want cheap electricity? We can have it: the wind blows and sun shines in Czechia

We need to build more renewable energy sources in the Czech Republic. There are three main reasons for this: cost, the competitive position of Czech industry and, last but not least, security.

Czech energy must simply change. For entirely pragmatic reasons. We want cheap energy so that we do not have to pay too much for it. We want to maintain the competitiveness of Czech industry. And we want energy with supplies secured from reliable sources, so that we do not have to fear another energy crisis like the one triggered by Putin's war in Ukraine. Renewable sources meet all these requirements.

Let us start with cost. Renewable sources produce cheap electricity. Their construction costs have fallen dramatically over the past decade.

Try answering the following riddle: in which market is the wholesale electricity price higher? A) Germany, or B) Czechia? Unfortunately, B is correct. The reason is simple – wind farms. They are a good example: Germany is building them rapidly, while Czechia has almost nothing in wind power. So when the wind blows in Central Europe and free energy flows through the region, Germany can use it and Czechia cannot.

We saw this very clearly this year as well. For example, on 15 January, the wind was blowing exceptionally strongly. Germany's wholesale electricity price was therefore nine euros per megawatt-hour. German wind farms were running at full capacity and flooded the country with cheap electricity. It also flowed to all neighbouring countries, including Czechia, to the maximum possible extent. No more electricity could reach Czechia because of the limited capacity of the transmission lines.

With further cheap generation, prices fell only in Germany, while in Czechia the remaining demand had to be covered by power plants with higher generation costs. The Czech wholesale electricity price was thus ten times higher than in Germany: 92 euros. The figures for the whole of last year speak clearly: last year, the average German wholesale electricity price was 12 euros per megawatt-hour lower than the Czech price.

An advantage for industry

Then there is competitiveness. The aforementioned effect of falling prices due to renewable sources will be a major future advantage for German industry. To avoid losing competitiveness against German companies, Czech industry will also need plenty of cheap electricity, both nuclear and renewable.

In the future, zero-emission electricity will affect the competitiveness of our industry in another way besides its price. In recent years, the global emphasis on sustainability has been growing, leading an increasing number of multinational corporations to use green energy to produce their final products.

Companies demand the same from their suppliers. To compete globally and in supply chains, Czech industry will need zero-emission electricity. No longer as a competitive advantage, but as a necessity. We can compare it, for example, to English: speaking English used to be an advantage in the labour market. Today, it is a necessary entry requirement for many employers.

Energy security

And the final important reason for building renewable sources is energy security. The wind blows here (the view that it does not blow strongly enough here for wind power is nonsense), and the sun shines here too. Wind and sunlight are therefore our local resources; no one can take them away from us. And that is precisely why they are secure.

Yes, we import components to install various renewable energy generation facilities, but this is the same as with many other products. Once a solar panel reaches us, it can generate electricity for 30 years regardless of the political situation. What matters is that the panel does not need fuel that external suppliers can use to blackmail us. Solar power generates more in summer, while wind generates more in winter, so these two sources complement each other perfectly and are ideally built together.

The Czech Republic needs a balanced energy mix in which photovoltaics, wind and nuclear power are significantly represented, supplemented by flexible gas or hydrogen sources and batteries. This will ensure that energy is secure, zero-emission and affordable.

Wind and sunlight are our local resources; no one can take them away from us. And that is precisely why they are secure.

Pavel Řežábek, director of ČEZ's analysis and forecasting department