You mentioned that previous governments wasted time on the construction of new nuclear reactors and that experts who were under 50 ten years ago are now approaching retirement. Construction of the reactors in Dukovany is scheduled to begin in 2029. Will we be able to prepare enough people to handle this by then?
We missed the boat in that we had a team of experts ready to build nuclear power plants at the time. On the other hand, we shouldn't underestimate what we have now. That is, technical education and many technical experts with operational experience. If we focus on post-communist countries, look at where the automotive industry has been maintained and developed. The Germans entered Škoda Auto and taught us, for example, how to realistically manage production quality, and now it is one of the most successful car manufacturers in the world. In the Czech Republic, we have a technical history dating back to Kolben, Daněk, and the Škoda Works.
I would have preferred the tender to have been signed in 2013 rather than now, but the main thing is that it was signed in the end. We still have the personnel, technical expertise, supervision, and research base that are capable of actively participating not only in the construction but also in the operation and modification of nuclear power plants.
Three companies participated in the tender, but North American Westinghouse ultimately did not submit a bid. Do you think this was because it had already prepared an agreement with the winner, South Korea's KHNP, on its share in the construction?
Every company has a limit to how many units it can build at the same time. And in my opinion, Westinghouse had a lot on its plate. It assessed its options after finalizing an agreement with Poland to build three nuclear units. In addition, the units that the Korean side is basing its plans on are based on Westinghouse's AP1000, which has been improved and modified. Westinghouse will still be involved in the construction, perhaps in terms of fuel or the control and management system. An agreement between Westinghouse and the Korean side was bound to happen eventually.
And how do you assess the selection of KHNP, which beat France's EDF?
Both companies are capable. Of course, it was not only a question of technology, but also of price and selection criteria, and KHNP came out on top. Let's accept that as a fact and learn to work with KHNP. And they, in turn, must learn to work with us.
Looking at the price you mentioned, it should be just over CZK 400 billion for two units. However, some people question this. Will it be possible to stick to it?
I have been in the energy sector for thirty years. When I started, some financial analysts said we should shut down two units at Dukovany because it was not profitable to operate them. Then other analysts came along and said that it wasn't worth building Temelín at all and that paying 100 billion for two units was an absurdly high amount. Now they probably won't stand by their predictions, which they claimed with certainty.
Nuclear power is a strategic long-term investment. If anyone knows what the prices and availability of primary raw materials will be in fifty years, they either have a working crystal ball or are simply making things up. Based on what we know, assessing whether something is worthwhile or not is like fortune telling, and I wouldn't pay any attention to it at all.
A strategic investment is not calculated like a standard investment with a fifteen-year return. Of course, there are investors who invest in ČEZ in order to have a seven or fifteen-year return, and they may not like investments with a longer return period. That is why the state had to get involved.
What about the option for two more blocks at Temelín? Should the government exercise it?
We are facing the decarbonization of heating, partly through gas, but after 2050 it will have to be through electricity, and gas will gradually decline. Then there is the trend toward electromobility, which will sooner or later increase consumption, not to mention the advent of AI and the need to build massive computing power and data centers. Electricity consumption will simply grow significantly. And the new units in Dukovany will only replace those that are currently in operation.
Half of our production comes from coal, we will switch to gas, and in time it will be necessary to produce electricity from another source. And at the moment, nuclear power seems to be the most suitable technology. We are talking about a minimum of three to six gigawatts of installed capacity. We are talking about the horizon of 2050. (This corresponds to three to six existing units at Temelín - editor's note.)
What do you think about the blackout in Spain in the first half of the year?
What happened in Spain could happen again. It is gradually becoming apparent that if there is not a sufficient proportion of rotating machines in the grid, i.e., spinning turbines located in the right place in the grid, the grid loses its flexibility and ability to respond to fluctuations, increasing the risk of its collapse. I apologize to the experts for such a simplification. In the future, rotating machines, i.e., turbines, will be nuclear or gas power plants that will keep the grid in a mode that is not overly sensitive to fluctuations in the grid and prevent its collapse. These are the laws of physics, and we must obey them.
In this context, what do you think about Germany, which has shut down all its nuclear reactors? Is it possible that they will be restarted?
It would be very difficult. It's a question of staff availability. Between 2004 and 2006, we had problems recruiting staff at Dukovany because studying energy, especially nuclear energy, wasn't exactly sexy. It was said that Temelín was completed, Dukovany would reach the end of its life, and who knows what would happen next.
Then we began to communicate intensively about the future of nuclear power and energy. For example, we announced a long-term operation program for Dukovany, and high school students gradually began to enroll in technical fields, simply in fields with a future. Now it turns out that they did the right thing. In Germany, however, it is not sexy now, almost no one is studying energy there, and they are losing their expertise. Restarting the reactors is technically possible, but they don't have the personnel.
Energy is a long-distance run, nuclear power is a marathon, conventional energy is a half-marathon, and hydropower is a lifestyle, and working with personnel must reflect that. The fact is that energy is the foundation of every economy, and it is undergoing fundamental technological changes. Something like telecommunications in the 1990s. So, for me, focusing my education on energy definitely makes sense.
There is also talk of modular reactors. ČEZ wants to build the first one in Temelín, then in locations where there are coal-fired power plants. Aren't you afraid of resistance from people in the area?
It is a nuclear facility and all the principles for nuclear facilities apply to it without exception, i.e., emergency planning, physical protection, nuclear safety, and radiation protection.
The aim is to facilitate licensing and operation so that a number of reactors can be built, which will reduce the cost of the initial investment, spare parts, and maintenance. I would most welcome a single European license for such a reactor. That would be an advantage.
On the other hand, the energy sector has developed in such a way as to minimize the investment costs per installed megawatt, so logically, development has moved from small power plants to large ones.
The same is true for wind turbines. They used to be ten meters on average, and now they are as big as a football field. This is to reduce the investment costs per unit of installed capacity.
With modular reactors, this can be done by producing many of them, simplifying their design and licensing, and then their placement may logically follow the opposite trend of reducing installed capacity. And yes, it will always require public approval.
Unlike Poland or Germany, Czechia did not negotiate the possibility of capacity payments for coal-fired power plants in the European Union. This is to be addressed by an amendment to the Energy Act, Lex Plyn, which allows the Energy Regulatory Office to order production and determine compensation if production does not cover costs. Do you think this is sufficient?
It is a substitute solution because we missed out on capacity payments. If you want to build a gas cogeneration unit in Poland and prove its efficiency, the capacity payment is based on that, and it is a mechanism that works.
Unfortunately, in our country, the Ministry of Industry and Trade did not consider this appropriate, and this is only a substitute solution. It is not a standard solution that works in the EU.
What changes in the Czech energy sector will need to be made as quickly as possible, and which ones in the longer term?
Of course, investment in nuclear power and the transition to gas. Investments will also be needed to strengthen the distribution and transmission systems. It is not that the investments are not technically ready, but if you look at the investment plans, they are mainly delayed by administrative proceedings, court delays, and the fact that people in the given location do not want them.
The solution is to emphasize the concentration of administrative proceedings, which means that comments can only be made for a certain period of time and must be relevant. However, this is still not being complied with, and as a result, most projects are being delayed.
Germany is a negative example: it has wind farms in the north and industry in the south, but it has not built a single kilometer of very high voltage lines and is sending electricity through Poland and Czechia.
ANO deputy chairman and candidate for Minister of Industry and Trade Karel Havlíček says he wants to limit or cancel subsidies for the purchase of domestic photovoltaic systems or heat pumps, for example within the New Green Savings program, and use European funds to strengthen transmission networks. According to him, this should lead to a decrease in the regulated part of the price and total payments by about a fifth. Is this realistic?
I would like to hear him speak now after the elections. The problem lies elsewhere. If we want to have a well-organized energy sector and offer flexibility and performance in photovoltaics, the regulated price of electricity will rise.
The second issue is how costs are distributed. The setting of fees is now somewhat communist in the sense that everyone contributes equally. If you build a photovoltaic plant in a remote location, you will get a connection even in a zone that was consumer-oriented and not production-oriented, and this incurs additional costs to ensure the stability of the system. However, you pay the same connection costs as someone who does it in an industrial zone.
It is about intervening in tariffs, in the conditions and how much I pay in distribution and transmission fees, depending on how much I burden the grid and what externalities I bring to the system.
Those who bring additional costs to the grid should pay proportionally more than those who only have standard consumption. Owners of photovoltaic systems, which cause unevenness when connected to the grid, should contribute to the externalities they bring. And this applies to all sources and consumers.
First, it is necessary to have information about the grid, then analyze it and decide how it would be fair to distribute the costs. It will be a very complex technical discussion, perhaps quite politicized, but it is the direction in which European energy companies are heading.
For years, there has been talk that the competitiveness of European companies is dramatically threatened by expensive energy, and some companies are even moving their production to the United States. Now that energy prices are set to rise again, can European industry survive?
The price of energy is only one factor. Anyone who has not tried to open a business in America or China will encounter other things that will give them pause. I think some production may move to America, but not because of cheaper energy, but because of fears about what will happen with tariffs.
America generally has low energy prices because it has its own gas fields, but you have to look at the possibilities of connecting to the distribution system and, in general, the level of electrification in individual states. We keep forgetting that it is a federation and we somehow average the conditions across the entire United States. Some states have cheaper electricity, but in New York, for example, it is more expensive. If you look at Texas, there are a lot of producers who generate electricity for themselves because they do not have access to the grid and therefore have a highly developed system of distributed sources.
And in China?
I had the opportunity to participate in the inspection of the construction of new power plants there, and I was put in charge of economics. In China, the price of electricity is set when the deputy director of the power plant for political affairs meets with the political leader of the region. The latter says, we have plans to build a factory and housing here, and I need the price of electricity to be such that I can finance it. The price of electricity in China is definitely not market-based, but is planned and decided in a directive manner.
You mentioned that even the big players will have to start behaving differently, for example, factories will have plant holidays in winter and not in summer as they have done until now...
The price for distribution will vary. We will probably switch from longer-term contracts to spot contracts. A change in behavior will have to take place, but I believe more in the market, which means that the change will come when companies calculate that it will pay off for them.
In connection with events in Spain, there have been voices saying that a high share of renewable sources in production is dangerous...
Spain is a larger country than Czechia, and its population is concentrated differently in terms of consumption. We have a very robust transmission and distribution system and, logically, a spread share of rotating sources. For me, it's about how many islands we can divide the country into so that if something happens in one, we can separate it and the rest of the network won't collapse. In other words, each island should have some spinning source that ensures the flexibility of the system and absorbs outages.
The second thing is how the grid is managed to prevent something from happening, and the third thing, which is often overlooked, is that you can build a lot of renewable sources such as photovoltaics, but if you have inverters from two manufacturers that have similar protection and control settings, and it runs out of the control band, they will all behave the same way at once. This is called system resilience against a single failure. All photovoltaics will behave the same way, and then the whole thing will crash.
It's not about percentages, but about how you have your resources distributed across the individual parts of the distribution system.
All of this is related to distributed energy and renewable sources, which have not yet been tested in operation, but this is not an insurmountable problem. It is definitely worthwhile to "push" as many renewable sources as possible into the grid, as long as the grid can handle it while maintaining its stability, because they have zero variable costs and do not burden the environment.
What does your company do?
We optimize and green energy. We have long sought to combine technical expertise with data analytics. Ultimately, this led us to develop our own software, so we created ORGREZ Data, which will focus not only on predictive models and optimization models for our customers, but above all on analytics.
Our first job was automated processing of ESG data for large customers, which is making a big splash, but it's actually pretty simple because you have all the data, you just have to put it in the right boxes and generate data for the report.
We made the Envision platform, which is just for that. Now we're doing a decarbonization study in Bratislava. The original idea was to send questionnaires to all housing cooperatives asking about their plans, but we took a different approach.
We took all public sources from Google Maps to subsidy titles, because they tell you what needs to be done in terms of investments in each cadastral area, and then we were able to calculate the actual losses in the building.
We took the cadastral map, which often has energy labels, data from the Slovak regulator and heat distributors, and so we put together the whole of Bratislava and, without sending a single questionnaire, we have 85 percent of the data and are able to start building Bratislava's decarbonization strategy. In other words, what needs to happen so that by 2050, the city's heating has a minimal carbon footprint.
Martin Procházka, editor, Novinky