COMMISSION STAFF WORKING DOCUMENT Energy Union Factsheet Czech Republic Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK Third Report on the State of the Energy Union
Date: 2017-11-23
Institutions: European Commission, Secretariat-General
Subjects: Czechia, climate change policy, competitiveness, economic and social cohesion, energy cooperation, energy policy, innovation, investment, regional cooperation, single market

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 23.11.2017 SWD(2017) 388 final  COMMISSION STAFF WORKING DOCUMENT Energy Union Factsheet Czech Republic Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK  Third Report on the State of the Energy Union  {COM(2017) 688 final} - {SWD(2017) 384 final} - {SWD(2017) 385 final} - {SWD(2017) 386 final} - {SWD(2017) 387 final} - {SWD(2017) 389 final} - {SWD(2017) 390 final} - {SWD(2017) 391 final} - {SWD(2017) 392 final} - {SWD(2017) 393 final} - {SWD(2017) 394 final} - {SWD(2017) 395 final} - {SWD(2017) 396 final} - {SWD(2017) 397 final} - {SWD(2017) 398 final} - {SWD(2017) 399 final} - {SWD(2017) 401 final} - {SWD(2017) 402 final} - {SWD(2017) 404 final} - {SWD(2017) 405 final} - {SWD(2017) 406 final} - {SWD(2017) 407 final} - {SWD(2017) 408 final} - {SWD(2017) 409 final} - {SWD(2017) 411 final} - {SWD(2017) 412 final} - {SWD(2017) 413 final} - {SWD(2017) 414 final}  
 
 
                              Energy Union – Czech Republic 

 Czech Republic 
    Energy Union factsheet1 

1.  Macro-economic implications of energy activities 

Energy and transport are key sectors for the overall functioning of the economy as they provide an 
important input and service to the other sectors of the economy. Together the activity in these two 
sectors2 accounted for 8.7 % of the total value added of the Czech Republic in 2015. Similarly, their 
share in total employment3 was 6.8 % of total employment in 2015, of which 6.1 % in the transport 
sector and 0.7 % in the energy sector.  

The  decarbonisation  of  the  energy  and  transport  sectors  will  require  significant  investments  and 
economic  activity  beyond  the  remit  of  these  sectors  themselves.  The  energy  transition  implies  a 
structural  shift  in  economic  activity.  Energy-related  investment  and  jobs  will  in  part  migrate  from 
traditional  fossil  fuel  based  activities  towards  construction,  equipment  manufacturing  and  other 
services related to the deployment of low carbon and clean energy technologies. At the moment the 
efforts  related  to  the  energy  transition  in  other  sectors  cannot  be  reliably  quantified  and  are 
therefore not included.  

(Source: Eurostat) 

1   The indicators used in this country factsheet largely build on indicators developed for the Commission Staff 
Working  Document  "Monitoring  progress  towards  the  Energy  Union  objectives  –  key  indicators" 
(SWD(2017)  32 
final)  https://ec.europa.eu/commission/sites/beta-political/files/swd-energy-union-key-
indicators_en.pdf  

2     Gross value added and employment in NACE sectors D-Electricity, gas, steam and air conditioning supply 

and H-Transportation and storage 

3   National accounts, Eurostat 

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In the case of renewable energy sector, both the direct as well as the indirect effects on employment 
are  being  estimated.  According  to  EurObserv'ER,  in  2015,  the  share  of  renewable  energy  related 
employment in total employment of the economy in the Czech Republic was at about 0.33 %, below 
the  EU  average  of  0.54  %.  The  turnover  of  the  renewable  energy  industry  in  the  same  year  was 
estimated at  around EUR  1  595  million,  the  biggest  part  being attributed  to  the biomass  (EUR 860 
million) followed by biofuels (EUR 330 million), and biogas (EUR 150 million) industries. 

(Source: EC based on Eurobserv'Er and Eurostat) 

An indication of the level of efforts and challenges encountered by the Czech Republic in the energy 
sector  is  given  by  the  gross  fixed  capital  formation  (GFCF)4.  Investments  in  the  electricity  and  gas 
sectors,  which  are  taken  as  reference  sectors,  peaked  in  2010  at  2.3  %  and  have  been  decreasing 
since to 1.5 % in 2015. 

(Source: Eurostat) 

In terms of trade, the Czech Republic is a net importer of oil and gas and a net exporter of electricity 
and  coal.  The  trade  deficit  in  oil  has  fallen  from  3  %  of  GDP  in  2006  to  2%  in  2015  influenced  by 
improvements in energy efficiency and a decrease in the prices of energy commodities, whereas the 

4 Gross fixed capital formation consists of resident producers´ acquisitions, less disposals, of fixed tangible or 
intangible assets. This covers, in particular, machinery and equipment, vehicles, dwellings and other buildings. It 
also includes foreign direct investment (FDI). Steam and air conditioning supply are also included in the figures 
mentioned above as Eurostat reports electricity, gas, steam and air conditioning supply together. 

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deficit in gas increased from 0.2 % to 0.6 % of GDP. At the same time the trade surplus in electricity 
and coal has declined from 0.8 to 0.2 % of GDP. 

(Source: Eurostat) 

2.  Energy security, solidarity and trust 

2.1. Energy Mix 

In  comparison  to  the  average  energy  mix  in  the  EU,  the  Czech  Republic's  energy  mix  of  primary 
energy products had in 2015 a lower share of renewable energy (9.8 % vs 13 %) and a higher share of 
nuclear energy (16 % vs 13.6 %). Conversely, natural gas had lower importance in the energy mix of 
the Czech Republic than the EU average (14.9% vs 22.0%). The same applies to oil (20.6 % vs 34.4 %). 
The Czech Republic uses more than the double of solid fuels than the EU average (38.1% vs 16.2%).  

 (Source: Eurostat) 

2.2. Import dependency  and security of supply 

31.9  %  of  the  Czech  Republic's  energy  consumption  came  from  imports  in  2015,  less  than  the  EU 
average. This is due to the high importance of domestic coal and lignite as well as of nuclear energy 
in the energy mix, which assure together about 60 % of the country's energy needs. 
The overall import dependency of the Czech Republic recorded an increase of about 4.1 % between 
2005 and 2015, which is more than the import dependency increase (1.9 %) at the EU level over the 
same period. Still, the Czech Republic imported virtually all its natural gas and oil needs in 2015. 

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Russia  supplied nearly  two  thirds  of  natural  gas  and  56.4  %  of  the crude oil in the  Czech  Republic, 
therefore it could be considered as dominant supplier. In 2015 Russian supplies were complemented 
by Norwegian gas supplies (34.5 %) - that wasn't the case during the previous years - and Azerbaijan 
and Kazakhstan oil supplies (together 43.2 %). The Czech gas network is very resilient and is able to 
support further source diversification. Its relatively high commercial gas storage capacity of 3.6 bcm 
further improves the country's security of gas supply. 

 (source: Eurostat) 

The  two  nuclear  power  plants  (JE  Temelín,  JE  Dukovany)  in  the  Czech  Republic  are  currently  using 
fuel of Russian origin. In the past, it has been possible to procure such fuel from a decommissioned 
nuclear plant in Europe and one of the Czech nuclear plants has invested into the capacity to use fuel 
of US origins. The American fuel was used in JE Temelín from 2000 to 2010. 

The security of gas supply regulation requires that, if the single largest gas infrastructure fails in one 
Member  State,  the  capacity  of  the  remaining  infrastructure  is  able  to  satisfy  the  total  gas  demand 
during a day of exceptionally high gas demand. The Czech Republic complies with this rule, principally 
relying on its good interconnections with neighbouring countries. 

(source: gas coordination group) 

3.  Internal market 

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3.1. Interconnections and wholesale market functioning 

3.1.1.  Electricity 

(source: EC services based on ENTSOE         source: EC services based on Eurostat       source: EC services based on Platts and 
European power exchanges) 

The  Czech  Republic  is  part  of  the  electricity  system  of  Central  Eastern  Europe,  and  its  wholesale 
electricity  market  is  coupled  with  Slovakia,  Hungary  and  Romania  since  2014.  The  Czech  electricity 
system is directly connected to all of the country's neighbours. In 2017 the electricity interconnection 
level5 of the Czech Republic was 19.3 %, having increased from 17 % in 2014 and being well above 
the 2020 and 2030 EU targets of 10 % and 15 % respectively. The Czech Republic is exposed to loop 
flows  from  Germany,  which  cause  its  transmission  system  operator  to  bear  significant  costs  of  re-
dispatching. Consequently the Czech Republic has put into operation phase-shifting transformer at its 
interconnectors  with  Germany.  Congestion  management  remains  an  issue  particularly  for  seven 
Member  States  (Austria,  Czech  Republic,  Denmark,  Germany,  Hungary,  Poland  and  Slovakia).  This 
needs  a  solution  that  will  facilitate  cross-border  electricity  flows  in  Central  Europe  and  across  the 
Union while ensuring system security. 

Concentration  of  the  power  generation  market  is  slightly  above  EU  average.  Wholesale  electricity 
prices  are  below  the  EU  average  (31.2  vs  38.7  EUR/MWh),  and  between  2013  and  2016  they 
recorded a slightly bigger decrease than the EU average (almost 15.1 % vs 14.8 %). 

Cluster of electricity transmission internal lines PCIs in the Czech Republic 

The “Czech North South Corridor” consists of PCI projects which will be implemented gradually until 
2028.  This  reinforcement  strategy  enables  the  power  flow  from  the  North-Western  border  to  the 
South-Eastern border of the Czech Republic. The implementation of this cluster is required in order 
to  facilitate  power  flows  in  the  direction  North-South  and  East-West,  to  enhance  the  grid  transfer 

5 The interconnectivity level is calculated as a ratio between import interconnection and net generation capacities 
of the country (i.e. the 2017 value is the ratio between simultaneous import interconnection capacity [GW] 
and net generating capacity [GW] in the country at 11 January 2017, 19:00 pm as resulted from ENTSO-E 
Winter Outlook 2016/2017) 

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                              Energy Union – Czech Republic 

capability  between  the  Czech  Republic  and  Germany  and  to  connect  the  future  thermal  and  RES 
generation facilities (including the connection point of wind generation at the substation Vernéřov). 
In  addition,  these  projects  ensure  enhanced  security  of  supply  of  the  North-western  part  of  Czech 
Republic in general terms. 

3.1.2.  Gas 

Wholesale gas prices in the Czech Republic remained at a slightly higher level than average EU gas 
prices over the last few years; however, they have been strongly correlated with German prices due 
to significant interconnectivity with Western European markets. Between 2011 and 2015, the market 
index  for  wholesale  gas  supply  significantly  dropped  due  to  a  progressive 
concentration 
diversification  of  supplies,  moving  away  from  the  historical 
incumbent  and  owing  to  the 
establishment of physical reverse flow on all interconnection points. This was also made possible by 
the implementation of reverse flow capability on the network. 

(source: ACER for the left graph and EC services based on  Platts, gas hubs, Eurostat for the right graph) 

The Czech Republic transits significant amounts of gas from Slovakia and also from Nord Stream back 
towards  Germany  (Waidhaus).  Regional  cooperation  on  the  North-South  gas  corridor  concept 
connecting  Poland,  Czech  Republic,  Slovakia,  Hungary  and  Croatia  has  been  a  priority,  though  its 
implementation seems to have lost momentum. There are also intentions to create a closer regional 
cooperation to potentially create a common trading zone between the Czech Republic and Austria, 
with the potential inclusion of Slovakia. 

3.2. Retail electricity and gas markets 

3.2.1.  Electricity 

In  2015  retail  electricity  prices  for  household  customers  in  the  Czech  Republic  were  significantly 
below the EU average. Between 2013 and 2016, average band retail electricity prices for households 
decreased,  but  to  a  lesser  extent  than  the  wholesale  prices.  This  may  be  partially  explained  by  a 
slight  increase  in  taxes  and  levies.  The  share  of  taxes  and  levies  in  retail  electricity  prices  for 
households in the Czech Republic was much lower than the EU average between 2013 and 2016. The 
switching  rates  by  consumers  from  one  electricity  supplier  to  another  significantly  dropped  below 
the EU average between 2011 and 2015. There were several pilot projects of deployment of smart 

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                              Energy Union – Czech Republic 

meters  in  the  Czech  Republic;  however  on  the  basis  of  cost-benefit  analysis  no  broad  deployment 
was yet accepted.  

(source: ACER) 

(source: Eurostat)  

(source: Eurostat) 

3.2.2.  Gas 

In  2016  retail  gas  prices  for  households  in  the  Czech  Republic  were  slightly  below  the  EU  average. 
There  were  no  significant  changes  in  average  retail  gas  prices  for  households  and  the  wholesale 
prices either between 2013 and 2016. The share of taxes and levies in retail gas prices for households 
was slightly lower in the Czech Republic than the EU average. The switching rates by consumers from 
one gas supplier to another significantly dropped below the EU average over the same period. 

(source: ACER) 

(source: Eurostat)  

(source: Eurostat) 

3.2.3.  Market performance indicators 

According to DG JUST, the satisfaction of the Czech consumers with the services received on energy 
retail markets remains stable and comparable to the average EU satisfaction level. 

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                              Energy Union – Czech Republic 

Source: DG JUST survey) 

3.3. Energy affordability  

In the Czech Republic the share of energy in total household expenditures of the lowest quintile of 
population  is  significantly  higher  than  in  the  EU.  This  can  be  explained  by  lower  purchasing  power 
and  a  significant  potential  to  improve  energy  performance  of  the  residential  building  sector. 
However, in 2015 only a limited part (up to 13.5 %) of citizens below the at-risk-of poverty threshold 
considered  that  they  were  unable  to  keep  their  home  adequately  warm,  even  showing  a  decrease 
since 2005. 

(Source: ad-hoc data collection of DG ENER based on HBS with the support of Eurostat and national statistics) 

4.  Energy efficiency and moderation of demand 

After a decrease in 2014, both primary and final energy consumption have risen again in 2015. The 
inter-annual  increase  in  final  energy  consumption  was  caused  by  significant  fluctuations  in 
temperature  on  annual  basis.  Final  energy  consumption  in  2015  was  influenced  by  high  values  of 
heating  degree  days  in  the  heating  season  compared  to  2013  and  2014.  The  value  of  final  energy 
consumption  in  2015  is  in  line  with  the  trend  of  the  long-term  decline  in  energy  consumption.  
Primary energy consumption in the Czech Republic reached 39.9 Mtoe and final energy consumption 
24.2 Mtoe in 2015. Since 2005, even though the economic growth was greater than the EU average, 

8 

 
 
 
 
 
 
                              Energy Union – Czech Republic 

the Czech Republic decreased its primary energy consumption by 6 % by 2015. Over the same period, 
final energy consumption also decreased by 8.1 %. 

(Source: Eurostat) 

Although primary energy intensity decreased over the 2005-2015 period faster that in the EU, it still 
remains one of the highest in the EU, more than the double of the EU average. In 2015 industry was 
the largest energy consuming sector in the Czech Republic, representing a share of 31.2 % in the total 
final energy consumption, which was well above the EU average (i.e. 25.3 %). Similarly, the energy 
consumption of the residential sector in the Czech Republic was slightly above the EU average, with a 
share in total final energy consumption of 27.2 %. As a consequence of the high energy consumption 
in the industrial and residential sectors, the share of energy consumption in transport and services is 
lower than the EU average. 

(Source: Eurostat) 

Energy intensity in services sector and in particular in the industry in the Czech Republic managed to 
measurably  decrease  and  got  closer  to  the  EU  average  between  2005  and  2015.  However,  in  the 
residential sector, the progress towards better energy performance of buildings is slower than in the 
rest of the EU, despite significant allocations to this sector from the EU structural funds and from the 
national  budget.  Furthermore,  the  national  energy  efficiency  actions  and  programs  need  to  be 
properly implemented in order to meet the cumulative saving requirements stemming from Article 7 
of the Energy Efficiency Directive. 

9 

 
 
 
 
 
 
 
                              Energy Union – Czech Republic 

(source: Eurostat)  

  (source: Eurostat) 

       (source: Odyssee database) 

Between  2005  and  2015  final  energy  consumption  in  the  transport  sector  varied  significantly  from 
one year to another in the Czech Republic. It recorded an average annual increase of 0.7 % over this 
period, which was slower than the 2.1 % average annual increase of the GDP. 

(source: Eurostat)  

        (source: Eurostat and DG MOVE pocketbook) 

The  share  of  collective  passengers'  land  transport  in  total  passengers'  transport  increased  from 
24.5% to 25.9 % between 2005 and 2015, being higher than the EU average of 17.3 %. 

10 

 
 
 
 
 
 
 
 
 
 
 
                              Energy Union – Czech Republic 

(source: Eurostat)  

In  order  to  further  elaborate  solutions  and  methods  for  funding  individual  transport  areas,  the 
Government adopted in January 2017 a Concept paper for freight transport 2017-2023 with a view to 
2030. It sets the government's priorities for logistic and freight transport in the context of the long-
term  strategy  for  transport  policy  in  the  Czech  Republic.  Among  others,  it  sets  as  a  priority  use  of 
alternative energy in transport (CNG, LNG, hydrogen and electricity). 

5.  Decarbonisation of economy 

5.1. GHG emissions 

In March 2017, the Czech Republic adopted its strategy for mitigation of climate change. The strategy 
defines a GHG emission reduction target for the year 2030 (-30 % compared to 2005) as well as an 
indicative emission level of 39 MtCO2eq for 2050 which corresponds to an indicative target of -80 % 
compared to 1990. The strategy also lists sectoral measures which could ensure the transition to low-
carbon  economy,  such  as  electro-mobility  and  increased  share  of  renewables,  energy  efficiency  in 
buildings, recycling, more ecological agriculture and afforestation. 

The  Czech  Republic  continues  to  over-achieve  its  emission  reduction  targets  –  with  total  GHG 
emission reductions of 36 % in 1990-2016. In sectors not covered by the EU ETS, the Czech Republic 
overachieved  its  2016  target  by  10  percentage  points,  and  is  projected  to  further  overachieve  its 
2020 target by 9 percentage points. 

Despite  the  general  reduction  trend,  GHG  emissions  continue  to  rise  sharply  in  the  following  two 
sectors of the economy: landfilling and refrigeration / air conditioning. Waste emissions continue to 
grow,  in  particular  emissions  (mainly  methane)  from  the  treatment  and  disposal  of  municipal, 
industrial  and  other  solid  waste  have  increased  by  68  %  since  1990.  Emissions  of  F-gases  have 
increased over the last 10 years from 0.9 to 3.5 MtCO2eq, mainly due to use of HFCs in refrigeration 
and air conditioning. 

(Source: EC and EEA)   

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                              Energy Union – Czech Republic 

Despite certain investments in energy efficiency, the Czech Republic remains one of the most energy 
intensive  and  carbon  intensive  economies  in  the  European  Union  –  mainly  due  to  a  high  share  of 
industry in GDP, and a majority share of coal in electricity generation.  

(Source: EC and EEA)   

Preliminary accounts under the Kyoto Protocol for Czech Republic show overall removals of -1.6 Mt 
CO2-eq. as an annual average in the period 2013-2015. For comparison, the annual average of the 
EU-28 accounted for removals of -119.0 Mt CO2-eq. It should be noted that in this preliminary 
simulated accounting exercise, removals from Forest Management did by far not exceed the 
accounting cap.  

Removals by Afforestation are clearly higher than emissions by Deforestation. In 2013 and 2014, 
their relative importance was small as compared to the removals by Forest Management; however, 
the notable reduction of removals by Forest Management in 2015 put removals by Afforestation in 
first place. Overall, the graph suggests a clear reduction in removals, in particular for 2015 as 
compared to previous years due to declining removals by Forest Management. Afforestation shows 
an increase in removals while emissions by Deforestation decrease over the course of the three-year 
period. 

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Note: Forest Management credits are capped and presented as yearly averages when the total Forest 
Management credits of the considered period exceed the simulated cap over the same period. 

(source: EC and EEA)  

CO2 emissions in transport and alternative fuelled vehicles 

In  Czech  Republic,  the  CO2  emissions  from  road  transport  were  in  2015  by  175  %  above  the  1990 
levels, and slightly reduced compared with 2005. 

Although  average  CO2  emissions  of  new  cars  in  the  Czech  Republic  decreased  between  2005  and 
2016, the pace of decrease was slower than the EU average, and emissions remained higher than in 
the EU. 

(Source: European Environment Agency) 

Alternative Fuels Infrastructure 

The share of electric cars in total sales on the Czech market was still marginal in 2015, but increased 
considerably as comparing to 2014. In 2015, 0.16 % of new cars sold in the Czech Republic have been 
hybrid-electric and electric cars. 

Over the last four years the number of electric charging points in the Czech Republic has more than 
tripled, while the largest increase was observed between 2015 and 2016 when the number increased 
from 320 to 435 units. 

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(European Environment Agency)  

       (European Alternative Fuels Observatory) 

National Policy Frameworks under Directive 2014/94/EU on  alternative fuels infrastructure have to 
establish targets, objective and measures for the development of the market of alternative fuels in 
the  transport  sector  and  the  deployment  of  the  relevant  infrastructure.  The  Czech  Republic  has 
submitted its National Policy Framework as requested under article 3 of the Directive 2014/94/EU. 

A  detailed  assessment of the Czech  National  Policy  Framework in terms of  its  compliance  with the 
requirements  of  Directive  2014/94/EU  on  alternative  fuels  infrastructure,  its  contribution  to 
achievement  of  long-term  energy and  climate objectives  of  the  Union  and  coherence of  its  targets 
and objectives in terms of cross-border continuity has been published as part of the Communication 
on  Alternative  Fuels  Action  Plans  (COM(2017)652)  and   the  related  staff  working  document 
SWD(2017)365.  

5.2. Adaptation to climate change 

The  Czech  Republic  adopted  its  Strategy  on  Adaptation  to  Climate  Change  (NAS)  in  2015.  The 
National Action Plan on Adaptation  to  Climate Change was developed on the basis of this Strategy 
and  approved  in  2017.  The  following  priority  sectors  were  included  in  the  strategy:  water 
management,  agriculture,  forest  management,  biodiversity  and  ecosystem  services,  urbanized 
landscape,  health  and  hygiene,  crisis  situations,  protection  of  the  population  and  environment, 
tourism and recreation, and the transport, industry and energy sectors. The monitoring and reporting 
system is being developed. The default status of indicators, for monitoring the NAS, is defined and 
the whole monitoring system should be operational by the end of 2017. 

5.3. Taxes on energy and transport and fossil fuel subsidies 

The  overall  tax  burden  on  energy  and  transport  in  the  Czech  Republic  amounts  to  2.1  %  of  GDP, 
which is 0.3 % below the EU average. The tax burden on transport fuel is higher than the EU average, 
while  taxes  on  transport  vehicles  as  well  as  heat  and  electricity  are  well  below  the  EU  average. 
Taxation of heat and electricity has shown an increase since 2005 while the tax burden on vehicles 
and  transport  fuels  has  in  contrast  fallen  since  2005,  leading  to  an  overall  decrease  in  energy  an 
transport related taxes since 2005. 

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(Source: Eurostat 

In  the  Czech  Republic,  fossil  fuel  subsidies  have  been  relatively  stable  over  the  last  decade,  with 
however a sharp and dramatic increase in 2009: that year, about CZK 37 billion (EUR 1.5 billion) of 
public  money  were  allocated  to  fund  environmental  clean-up  projects  on  abandoned  coal  mines 
throughout the country. 

For instance, a state aid of CZK 600 million (EUR 24 million) was granted to cover exceptional costs 
arising from the process of closing the uncompetitive Paskov mining unit and that are not related to 
coal production. In particular, the aid was intended to cover the expenditure on workers who have 
lost or who will lose their jobs at the coal production unit and to workers entitled to such payments 
before the closure6  

(source: OECD Inventory of Support Measures for Fossil Fuels 2015) 

] 

5.4. Renewable energy  

The  Czech  Republic  has  already  met  its  2020  targets  for  renewable  energy,  primarily  due  to 
significant investments  in the sector  over  the recent  years,  and  to  the high  share  of  renewables  in 
heating  and  cooling  and  electricity  generation.  Renewable  energy  accounted  for  15.1  %  of  final 

6 http://ec.europa.eu/competition/state_aid/cases/254578/254578_1680719_130_2.pdf  

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energy consumption in 2015, being above the 2020 target of 13 %. Although the share of renewable 
energy continued to grow until 2014, changes to renewables support schemes in the energy sector 
have  negatively  impacted  their  potential,  and  in  2015  the  Czech  renewable  energy  development 
stagnated. The main changes were that feed-in tariffs or premium tariffs for new power plants were 
abolished by the end of 2013. Only renewable energy plants put into operation before 31 December 
2013  receive  the  feed-in  or  premium  tariff.  For  wind,  hydro  or  biomass  plants  put  into  operation 
since 2014, they only benefit from support if the building permit was issued before 2 October 2013. 
Also  since  January  2011,  PV  plants  over  30  kWp  put  into  operation  in  2010  are  subject  to  the 
payment of a retroactive solar tax. 

Renewable energy share was nearly 20% in 2015 in the heating and cooling sector and it was 14.1 % 
in  electricity  generation.  The  use  of  biofuels  in  transport  decreased  in  2015  to  6.5  %  and  it  stayed 
below the specific target of 10 % renewable energy in transport. 

(source: Eurostat-SHARES) 

(source: Eurostat-SHARES) 

Due  to  a  consistent  deployment  of  renewables  since  2005,  it  is  estimated  that  the  Czech  Republic 
avoided  in  2015  about  9  %  of  the  fossil  fuel  in  gross  inland  consumption  and  about  8.2  %  of  GHG 
emissions at national level. 

16 

 
 
 
 
 
 
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 (Source: EEA) 

5.5. Contribution of the Energy Union to better air quality 

Air  quality  in  the  Czech  Republic  continues  to  give  cause  for  concern.  For  the  year  2013,  the 
European Environment Agency estimated that about 12,030 premature deaths were attributable to 
fine particulate matter (PM2.5) concentrations and 330 to nitrogen dioxide (NO2) concentrations7.  

For  both  pollutants,  the  Czech  Republic  reported  exceedances  of  the  binding  EU  air  quality 
standards8. For the year 2015, the Czech Republic reported exceedances of the limit value for PM10 in 
5 out of the 10 air quality zones in the Czech Republic, while exceedances of the limit value for PM2.5 
were reported in 3 out of the 10 zones, and exceedances of the NO2 limit value in 1 zone. 

(Source: EEA) 

The health-related external costs from air pollution in the Czech Republic have been estimated to be 
more  than  6  billion€/year  (income  adjusted,  2010),  which  includes  the  intrinsic  value  of  living  a 

7  European  Environment  Agency,  2016,  Air  Quality  in  Europe  –  2016  Report,  table  10.2.  The  report  also 
includes details as regards the underpinning methodology for calculating premature deaths.    
8 Directive 2008/50/EC of the European Parliament and of the Council of 21 May 2008 on ambient air quality 
and cleaner air for Europe, OJ L 152, 11.6.2008, p.1-44 

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healthy life without premature death as well as the direct costs to the economy such as healthcare 
costs and lost working days due to sickness caused by air pollution9. 

The  Energy  Union  can  substantially  contribute  to  addressing  these  air  quality  problems  through 
measures reducing emissions of both GHG and air pollutants such as PM and nitrogen oxides (NOx) 
from major contributing sectors such as (road) transport, energy production, industry and residential 
heating (e.g. stoves and boilers) as shown in the figure below10. 

(Source: EEA. This table reflects only sources of primary PM2,5 emissions.)  

6. Research, innovation and competitiveness  

6.1. Research and innovation policy 

Energy research in the Czech  Republic is informed  on one hand by the EU's  policy of CO2 emission 
reductions  and  on  the  other  by  Czech  energy  policy  developing  a  secure  and  independent  energy 
supply for the country. 

The  current  National  Research,  Development  and  Innovation  Policy  identifies  eight  main  research 
priorities.  The  third  priority  focuses  on  energy  sources,  with  an  emphasis  on  nuclear  fission; 
thermonuclear  fusion;  renewable  and  alternative  energy  sources  (biomass,  wind,  geothermal  and 
solar energy); energy systems and networks; and fossil fuels (combustion and multi-fuel operation). 
Other  research  areas,  such  as  materials,  the  environment,  security  and  defence  issues,  also  have 
close links to energy. 

A new comprehensive programme on R&D in energy was adopted in 2017, spanning over the period 
2018-2025  with  total  funding  from  the  national  budget  amounting  to  150  million EUR  (approx.  20 
million EUR per year). The first call is expected to be launched in the second half of 2017. 

The Czech Republic is not very active in the ongoing work of the Strategic Energy Technology (SET) 
Plan; it only participates in two (out of fourteen) temporary working groups for the implementation 

9  See  also  the  EU  Environmental  Implementation  Review  Country  Report  for  the  Czech  Republic, 
SWD(2017)37 final of 3.2.2017 
10 National emission data as reported by the Member States to the EEA (available on the EEA's Eionet/Central 
Data Repository), http://cdr.eionet.europa.eu/fi/eu/nec_revised 

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of  the  integrated  SET  Plan,  the  ones  dedicated  to  nuclear  safety  and  energy  efficiency  in 
buildings/renewable heating and cooling. 

Regarding  the  Horizon  2020  programme,  the  Czech  Republic  has  received  so  far  0.7  %  of  the  EU 
contribution  devoted  to  the  'secure,  clean  and  efficient  energy'  part  of  the  programme.  As  of 
September 2017, 63 participations from Czech organisations have been awarded EUR 13.1 million in 
Horizon  2020  energy  projects.  This  includes  four  grants  totalling  over  EUR  1.6  million  to  Czech 
beneficiaries participating in project InterFlex (demonstration projects on energy system flexibility), 
and  a  grant  of  over  EUR  0.6  million  to  the  University  of  Chemistry  and  Technology  (Vysoka  Skola 
Chemicko-Technologicka V Praze) for its participation in project BioMates (innovative biofuels). 

6.2. Investments and patents in the Energy Union R&I priorities  

Based  on  provisional  reporting,  in  2016,  public  (national)  investments  in  the  Energy  Union  R&I 
priorities reached EUR 18 million, which corresponds to about half of the public investment in 201511. 
The Smart Systems and Nuclear Safety R&I priorities of the Energy Union attracted the largest share 
of investments, with 36 % and 35 % of the total respectively. In the period 2007-2016, the maximum 
public investment was EUR 44 million in 2012. In 2014, the most recent year for which data for most 
Member States are available, public investment per GDP was lower than the EU average. 

Private investment in the Energy Union R&I priorities in 2013 was estimated at EUR 63 million (0.4 % 
of  the private R&I investment  in Energy Union  R&I  priorities  in the EU).  The focus  was  on  Efficient 
Systems, which attracted 53 % of these investments, followed by Sustainable Transport with a share 
of 21 %. 

In 2013, the most recent year for which complete patent12 statistics are available, 33 companies and 
research  organisations  based  in  the  Czech  Republic  filed  26  patents  in  low-carbon  energy 
technologies (0.4 % of the EU total). The focus was on Efficient Systems (50 %), followed by Smart 
Systems (22 %) and Sustainable Transport (15 %). 

In 2013, both private investments and patents in Energy Union R&I priorities were lower than the EU 
average when normalised by GDP and by population respectively. In the period 2007-2013, private 
R&I investments decreased by 9 % per year on average, contrary to the respective EU indicator that 
increased at an average rate of 6 %. For the same period, the number of patents increased by 3 % on 
average, a rate of increase being lower than the respective EU indicator (15 %). 

11 The values reported for 2016 are provisional; the respective figure for 2015 was EUR 34 million, 6% lower 
than 2014. Additionally, data in the 2015/16 submission correspond to the application of an improved 
methodology by the MS. 
12   In  the  context  of  this  document,  the  term  'patent'  refers  to  patent  families,  rather  than  applications,  as  a 
measure  of  innovative  activity.  Patent  families  include  all documents  relevant to  a  distinct  invention (e.g. 
applications to multiple authorities), thus preventing multiple counting. A fraction of the family is allocated 
to each applicant and relevant technology. 

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Note:  The  international  comparison  (right)  is  shown  for  2014  (Czech  Republic  had  reported  EUR  36  million). 
Reporting at EU level for 2015 is not as complete, and very few countries have reported for 2016. 

(Data sources: Public investment as available in the International Energy Agency RD&D Statistics database13 for 
codes  relevant  to  Energy  Union  RIC  priorities.  Patent  data  based  on  the  European  Patent  Office  PATSTAT 
database14. Private investment as estimated by JRC SETIS. Detailed methodology available from the JRC15.) 

6.3. Competitiveness 

Since 2005 the real unit energy costs (RUEC)16 in the Czech Republic were decreasing. In 2014 they 
were at 17.4 %, being above those at the EU average (15.3 %), more than twice of those in the US but 
below  those  in  Japan,  Russia  and  China.  This  can  be  partly  explained  by  the  specialisation  of  the 
Czech  Republic  in  energy  intensive  industries.  In  the  second  half  of  2016,  electricity  prices  paid  by 
industrial customers in the Czech Republic were below OECD and slightly below the EU averages. Gas 
prices  for  industrial  consumers  were  slightly  below  the  EU  and  were  comparable  to  the  OECD 
average. 

13   http://www.iea.org/statistics/RDDonlinedataservice/  
14   https://www.epo.org/searching-for-patents/business/patstat.html#tab1  
15   https://setis.ec.europa.eu/related-jrc-activities/jrc-setis-reports/monitoring-ri-low-carbon-energy-

technologies  

16   This indicator measures the amount of money spent on energy sources needed to obtain one unit of value 

added. 

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                              Energy Union – Czech Republic 

(Source: ECFIN) 

                   (Source: ESTAT and IEA) 

Regarding  the  competitiveness  in  wind  and  solar  energy,  the  Czech  Republic  has  a  comparative 
advantage in the solar sector as indicated by a value above 1 of the revealed comparative advantage 
(RCA) indicator17. This  can  be attributed  to  a  comparative  advantage  in power  electronics  for  solar 
photovoltaic  panels.  The  Czech  economy  is  not  specialised  in  wind  energy  as  indicated  by  the  RCA 
indicator  below  1  in  2015,  a  change  compared  to  2005  when  the  Czech  Republic  still  had  an  RCA 
indicator above 1. This is mainly due to a loss in comparative advantage in key components of wind 
turbines such as generators and gearboxes .The Czech Republic expanded its comparative advantage 
in  power  electronics  between  2005  and  2015  for  both  wind  and  solar  photovoltaic  technologies. 
Despite  the  comparative  advantage  in  solar  energy,  the  Czech  Republic  has  a  slightly  negative 
relative  trade  balance18  for  solar  energy  components,  whereas  they  are  a  net  exporter  of  wind 
energy components, although below average EU levels.  

(Source: UN Comtrade) 

17 The RCA index for product "i" is defined as follows: RCAi =

Xj,i
∑ Xj,i
i
Xw,i
∑ Xw,i
i

 where X is the value of exports, and j is 

the country and w is the reference  group, the World economy. 2005 refers in the text to the indicator average 
over the 2000-2009 period, while 2015 represents the average over the 2010-2016 period. The same applies for 
the RTB indicator - see below. 
18 The RTB indicator for product "i" is defined as follows: 𝑅𝑇𝐵𝑖 =
exports and 𝑀𝑖 imports. 

 where 𝑋𝑖 is the value of product's "i" 

𝑋𝑖−𝑀𝑖
𝑋𝑖+𝑀𝑖

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7. Regional and local cooperation 

The Czech Republic is part of the North-South, electricity interconnections in the following regional 
cooperation initiatives:  

-  Central Eastern and South Eastern Europe regional priority corridor for electricity,  
-  North-South  gas  interconnection  in  Central  Eastern  and  South  Easter  Europe  as  well  as 

South Gas Corridor regional priority corridors for gas, 
South South-East Gas Regional Initiative (GRI),  

- 
-  Continental Europe ENTSO-E system operation regional group,  
- 
-  GRIP Central-Eastern Europe. 

TSC Regional Security Coordinator (RSC), and 

The EU macro-regional strategy for the Danube Region in which the Czech Republic takes part can be 
used  as  a  basis  for  regional  cooperation  on  energy.  The  Czech  Republic  is  a  co-coordinator  of  the 
priority area 'To encourage more sustainable energy'. European Territorial Cooperation – 'Interreg' – 
under  EU  cohesion  policy  also  provides  further  opportunities  for  cross-border,  transnational  and 
interregional cooperation, including in the Energy Union areas. 

Cities and urban areas have a key role in the energy and climate challenge. The Urban Agenda for the 
EU,  established  by  the  Pact  of  Amsterdam  in  May  2016,  better  involves  cities  in  the  design  and 
implementation of policies, including those related to the Energy Union. It is implemented through 
partnerships, in which the Commission, Member States, cities and stakeholders work together on a 
number  of  important  areas,  including  on  Energy  Transition,  Urban  Mobility,  Air  Quality,  Climate 
Adaptation and Housing. The Czech Republic is participating in the partnerships on Urban Mobility, 
as the co-coordinator, and Air Quality, as a member. 

By  2016  sustainable  energy  action  plans  delivered  by  5  Czech  municipalities  had  been  assessed  by 
the Covenant of Mayors. Overall, these municipalities cover 344 thousands inhabitants. All together, 
these  municipalities  committed  to  reduce  by  2020  the  GHG  emissions  by  24.7%  (as  compared  to 
1990 baseline).  

(source: JRC 2016. Notes: SEAP=sustainable energy action plan, GHG=greenhouse gas emissions) 

In  the  Czech  Republic,  by  September  2016,  3  cities  (covering  1.38  million  inhabitants)  have 
committed  to  conduct  vulnerability  and  risk  assessment  and  develop  and  implement  adaptation 
plans in the framework of the Covenant of Mayors for Climate and Energy. 

8. Cohesion policy and EU clean energy investments 

EU  cohesion  policy  makes  a  key  contribution  to  delivering  the  Energy  Union  objectives  on  the 
ground,  including  important  investment  possibilities  to  implement  energy  policy  objectives  in  the 
Czech  Republic,  which  are  complemented  by  national  public  and  private  co-financing,  aiming  at 

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optimal  leverage.  It  also  ensures  integrated  territorial  solutions  to  energy  and  climate  challenges, 
supports capacity building and provides technical assistance. 

Over  2014-2020,  cohesion  policy  is  investing  some  EUR  2  508  million  in  energy  efficiency 
improvements  in  public  and  residential  buildings  and  in  enterprises,  as  well  as  in  high-efficiency 
cogeneration  and  district  heating,  renewable  energy  and  smart  energy  infrastructure  in  the  Czech 
Republic. Cohesion policy is also investing significant funds in R&I and in SME competitiveness in the 
Czech Republic, based on the national strategy for smart specialisation. For the Czech Republic, the 
strategy  includes  a  focus  on  sustainable  and  safe  production  and  distribution  of  electricity.  At  this 
stage,  at  least  EUR  164  million  is  foreseen  for  investments  in  R&I  and  adoption  of  low-carbon 
technologies in the Czech Republic, but this might increase further in line with the evolving content 
of the smart specialisation strategy. A further estimated EUR 3,040 million is invested in supporting 
the move towards an energy-efficient, decarbonised transport sector. 

(source: DG REGIO) 

These  investments  are  expected to  contribute  to  around 75,000  households  with improved energy 
consumption  classification,  a  decrease  of  around  26,862,000  kWh  per  year  of  primary  energy 
consumption of public buildings, 100 MW of additional capacity of renewable energy production, as 
well as to around 100 km of reconstructed or upgraded railway lines and 8 km of new or improved 
tram and metro lines. Overall, the EU cohesion policy investments in the Czech Republic over 2014-
2020  are  expected  to  contribute  to  an  estimated  annual  decrease  of  GHG  emissions  of  around 
1,105,000 tonnes of CO2eq. 

For  example,  the  project  to  increase  energy  efficiency  of  the  elementary  school  building  in  Horní 
Benešov involved thermo-modernisation of the school, with the city of Benešov as beneficiary. The 
project objective was to reduce energy consumption used for heating by improving insulation of the 
civil structures and envelope of the building. The cohesion policy funding contribution amounted to 
EUR 54,000 EUR. 

As  another  example,  the  project  in  the  milk  production  facility  in  Jaroměřice  aimed  to  reduce  the 
energy intensity of the company's operation, mainly by realizing heat-saving measures. The company 
has a present daily production capacity of around 120 000 litres of milk. This company's production 
programme  includes  cheeses,  cottage  cheese,  traditional  spread  butter  and  classic  butter  of  high 
quality  raw  materials.  The  measures  taken  were  mainly  gas  heat  pump  installations  for  combined 
heating and refrigeration. The cohesion policy funding contribution amounted to EUR 39 000. 

23 

 
 
 
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Through  its  support  to  sustainable  transport  systems,  the  Connecting  Europe  Facility  (CEF)  also 
contributes to the goals of the Energy Union. Following the Czech participation in the CEF – Transport 
programme 2014-2015, the Czech action portfolio comprises 38 signed grant agreements, allocating 
EUR  842.4  million  of  actual  CEF  Transport  Funding  to  Czech  beneficiaries  (state-of-play  February 
2017)19.  The  transport  mode  which  receives  the  highest  share  of  funding  is  rail  (92.8  %  of  actual 
funding). The rail actions have three main objectives, of which the most important is to upgrade the 
rail  infrastructure  in  order  to  eliminate  the  existing  capacity  and  interoperability  bottlenecks  along 
the three Core Network Corridors crossing the country. The second targets the deployment of The 
European  Railway  Traffic  Management  System  (ERTMS),  while  the  third  addresses  interoperability 
and implementation of Rail Freight Corridors. In the road sector, the Czech Republic developed and 
modernised  the  motorway  infrastructure,  implemented  Intelligent  Transport  Systems  and  Services 
(ITS), and made innovation aiming at greening the road transport.20  

19 Note that European Economic Interest Groups and International Organisations are excluded from the analysis. 
20 Source: INEA 

24