ČEZ and Třinecké železárny agree on power supplies from a solar plant 500 km away in Czechia

Energy company ČEZ ESCO has signed its first contract with Třinecké železárny for direct electricity supplies from a producer using a specific source located off the customer’s site. For at least three years, the steelworks will take 4,4 gigawatt-hours (GWh) of electricity annually from the Vrskmaň solar power plant in the Chomutov region, around 500 kilometres from the steelworks. The ČEZ group informed the Czech News Agency (ČTK) today.

The contract with Třinecké železárny is ČEZ’s first so-called off-site PPA contract, under which the electricity source is located off the customer’s site. The steelworks’ supplies will come from a solar power plant in Vrskmaň near Chomutov, 500 kilometres away. It was built on the site of the former Jan Šverma mine, in an area previously used for technical facilities; the mine shaft used the space to handle mining equipment. The solar plant, with an installed capacity of 4.78 MW, has been in operation since last summer.

„Demand for modern energy solutions among major industrial companies is growing rapidly. PPA contracts allow customers to lock in electricity prices at a stable level for the future, with supplies coming from a clearly specified source. This gives customers the best possible understanding of the origin of the energy they use,“ said ČEZ ESCO CEO Kamil Čermák.

For Třinecké železárny, the contract is part of its efforts to deliver on its pledge to cut carbon dioxide emissions by 55 percent by 2030 compared with 1990. „Making steel production greener involves implementing several projects and also aims to use green energy in production processes,“ said Třinecké železárny CEO Roman Heide. The steelworks is building its own solar power plants, briquetting lines and combined-cycle gas power plants. Overall, Heide said, the company plans to invest tens of billions of crowns in modernising and greening its operations.

To date, ČEZ has mainly implemented so-called on-site PPA contracts, under which it builds generation facilities directly at the customer’s site. Examples include rooftop solar at the Škoda Auto site, the Denso company solar plant in the Liberec region, and solar panels on the roof of the Prague Congress Centre. Other energy companies have also previously signed contracts for direct electricity supplies from a specific source. The first such agreement was between Ambient Energy and ŠKO-ENERGO.

ČEZ wants to sign similar contracts with other customers. The company says they make it possible to plan further investment in the sector and operate power plants with greater certainty. „We therefore see strong potential in this segment going forward, as both parties always benefit,“ said Jan Kalina, a ČEZ board member and director of its renewable and conventional energy division.

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. It employs more than 2100 people. Two years ago, the company reported a net profit of 1.6 billion Kč, compared with a loss of half a billion Kč in 2022.

Třinecké železárny is the largest steelmaker in Czechia. In 2023, it generated revenue of 49,692 billion crowns and a net profit of 44 million crowns. Its main products include long rolled products – wire rod, sections, special bar steel, drawn steel, rails, wide steel, seamless tubes and steelmaking semi-finished products. Including its separate operations, Třinecké železárny has nearly 6800 employees.