The Heat Supply Industry in the Czech Republic

Transcription

1 The Heat Supply Industry in the Czech Republic Energy Regulatory Office 4th ERRA Energy Regulation & Investment Conference April 11-12, 2005 Budapest, Hungary Content Central heating in the Czech Republic Privatisation in the heat supply industry Current situation on the thermal energy market Regulation in the Heat Supply Industry Thermal energy price control from 2005 Investments in the heat supply industry Energy legislation New trends in the heat supply industry Combined heat & power generation 2 1

2 Central heating in the Czech Republic The Czech Republic is one of the countries with the most widespread central heating systems As early as the beginning of the 20th century, industrial plants developed central heating systems and heat generation facilities for their technological processes Today, central heating accounts for 35% of household heating in the Czech Republic Great attention is currently being devoted to renewable sources of energy and combined heat & power generation 3 Privatisation in the heat supply industry The entire privatisation of the heat supply industry took place in the 1990s What formerly were state-owned enterprises are usually business companies today Smaller heating plants are usually owned and controlled by the towns and cities that receive the thermal energy from these heating plants Foreign capital holds ownership interests in the largest generators and distributors of thermal energy 4 2

3 Current situation on the thermal energy market The companies that provide thermal energy supplies are usually local monopolies The influence of competition, if any, on the thermal energy market varies in different localities For the final customers, changing the method of heating involves considerable costs The Energy Regulatory Office protects the consumer interests and substitutes the insufficient influence of the competitive environment by thermal energy price controls 5 Regulation in the heat supply industry Regulation on the energy market (the Energy Act) Conditions for the entry and exit of businesses (licensing) Conditions regulating the relationships between market entities; rights and obligations, including the means of enforcement Thermal energy price control The setting of the preconditions for mandatory thermal energy pricing Optimisation of the costs of thermal energy generation and distribution Long-term stability of thermal energy prices Adequate profitability of the companies that are subject to regulation 6 3

4 Thermal energy price control from 2005 The thermal energy price may contain: Economically justifiable costs Reasonable profit Value added tax The price level serves for comparison against the prices charged Below the price level the annual growth in fixed (non-fuel) costs, and profit, is not restricted Over the price level, the annual growth in fixed costs and profit is restricted If savings in variable (fuel) costs are achieved, 90% of the savings achieved may be used for covering the capital expenditure made Unification of prices of the thermal energy supplies having the same nature The ERO s Price Decision on thermal energy prices does not apply in 2005 only 7 Investments in the heat supply industry Investments in the heat supply industry are not specifically regulated (restricted) if made in accordance with the energy audit The conditions applicable to the mandatory thermal energy pricing support investments in improving the efficiency and reliability of the heat supply facilities and the quality of thermal energy supplies On 10 November 2004 the Czech Government endorsed the National Programme for Support of Energy Savings and Use of Renewable Energy Sources for 2005 The Czech Energy Agency supports some projects in the heat supply industry 8 4

5 Energy legislation The Energy Act and its implementing regulations lay down the conditions for business and state administration in the energy industries The Energy Management Act lays down the obligations related to the management of energies, especially the electric and thermal energies, contributes to the environmentally-friendly use of natural resources and environmental protection in the Czech Republic, and helps to improve the economy of energy uses A law on renewable energy sources is being drafted A public notice on combined heat & power generation is being drafted The requirements of the EU Directives are being implemented in the Czech energy legislation 9 New trends in the heat supply industry Extracting thermal energy from renewable sources, in particular by burning wood waste and quickly growing wood species Installing heat pumps for obtaining thermal energy from water, air, or the earth Extracting thermal energy from municipal waste by burning Using solar collectors for water heating Combined heat & power generation, which better utilises the fuel s primary energy Developing new technologies for clean burning, especially of coal Using waste heat from nuclear power plants in the heat supply industry 10 5

6 Combined heat & power generation A long tradition in the Czech Republic About 12% of electric energy is currently generated in CHP Electricity generation in CHP is increasing (8 TWh in 2003, 10 TWh in 2004) Structure of plants by capacity: 3% up to 1 MW e 1% from 1 to 5 MW e 96% over 5 MW The support of CHP consists mainly in guaranteed purchase prices of electric energy The latest amendment to the Energy Act (effective since January 2005) also contains the main principles of Directive 2004/8/EC of the European Parliament and the European Council on CHP support 11 Thank you for your attention Energy Regulatory Office Masarykovo námstí 5, Jihlava Prague office: Partyzánská 1/7, Praha