ČEZ plans to invest CZK 80 billion in Czech district heating decarbonisation by 2030

The ČEZ Group plans to invest CZK 80 billion in the decarbonisation and modernisation of district heating by 2030. This will be the company’s second-largest investment after spending on nuclear energy. The figure includes subsidies for modernising district heating plants in Czechia. Kamil Čermák, chairman of the board of the Modern Energy Union and CEO of ČEZ ESCO, said this at a meeting on the modernisation of Czech district heating in Prague today.

Hundreds of billions of crowns will be invested in modernising district heating plants in the coming years. CZK 87 billion has been earmarked from the Modernisation Fund for their decarbonisation.

In addition to using biomass, ČEZ sees the future of decarbonisation primarily in natural gas. According to Čermák, it is an essential commodity for reducing emissions from district heating while maintaining the centralised heat supply system. „Such an investment has to pay for itself, so natural gas needs to remain available,“ he said. The group is currently also blending hydrogen into some of its energy sources. However, it plans to build hydrogen-only facilities only in the next decade.

ČEZ is currently converting its coal-fired power plant in Mělník to a combined-cycle gas plant. It previously received EUR 308 million (roughly CZK 7.53 billion) from the Modernisation Fund for the transformation. The Mělník-based Energotrans is the largest district heating source in Czechia, supplying heat to the eastern half of Prague, Mělník and Neratovice.

Last May, ČEZ said it would invest CZK 100 billion in the transformation of the energy and district heating sectors in the Ústí nad Labem Region by 2030. This should preserve the centralised heat supply system, which operates in most of the region’s larger cities. ČEZ will build new heat and power sources and contribute to the development of education and the preservation of jobs. Further investment will follow through to 2040.

The European Commission established the Modernisation Fund to help speed up the shift away from coal combustion and reduce greenhouse gas emissions. The fund consists of money raised from the sale of emission allowances. Thanks to high allowance prices, Czechia is expected to have up to CZK 500 billion available from the Modernisation Fund by 2030. The funds are revenue for the State Environmental Fund of the Czech Republic and will be allocated gradually through ten subsidy programmes supporting low-carbon technologies, the modernisation of energy systems and improvements in energy efficiency.

ČEZ is the largest Czech energy company, and its majority shareholder is the state, which holds roughly 70 percent of its shares through the Ministry of Finance. In the first three quarters of last year, it earned CZK 23.4 billion, with the group’s net profit falling by CZK 6.4 billion year on year. ČEZ ESCO is a subsidiary of ČEZ. It focuses on services related to modern energy, decarbonisation and reducing the carbon footprint for industrial customers, municipalities and institutions.