The Czech Republic’s largest utility, ČEZ Group, should scale up its domestic solar PV portfolio over the next decade instead of pursuing new nuclear power plants, the Institute for Energy Economics and Financial Analysis (IEEFA) has said.
An immediate and continuous investment in solar from the company would add much-needed renewables capacity, “transform ČEZ Group from laggard to leader” in renewables production domestically and achieve both Czech and European Union climate targets, the think tank said in a new report.
As part of a strategy announced last year to decarbonise its power generation, ČEZ aims to construct 6GW of renewables by 2030, phase out coal by 2033 and build a new nuclear power plant by 2037.
IEEFA, which said the utility is currently “playing catch-up on renewable energy”, warned that the proposed nuclear facility “could lead to a downgrade” of ČEZ’s credit rating, especially given the likelihood of construction delays and cost overruns.
Instead, the think tank said the majority state-owned ČEZ “should strongly commit to investing in new, large-scale solar PV capacities, which would deliver better value to the company, its shareholders and Czech taxpayers”.
“The decarbonisation plan’s financial risks outweigh its benefits for ČEZ and Czechia’s residents,” said Mihaela Grubišić Šeba, an energy finance analyst at IEEFA Europe. “Our findings suggest it may be more effective to be more aggressive on utility-scale solar photovoltaics than planned, which would be more cost-effective in the context of the company’s proposal.”
ČEZ’s efforts to bolster its presence in Europe’s solar sector saw its Elevion renewables arm complete the acquisition solar EPC and O&M service provider Belectric from German energy company RWE last month.
But domestically, IEEFA said the company has failed to establish a base of renewables generation over the last decade, and instead relies on its ageing coal and nuclear fleet.
Heightened solar PV investment from ČEZ would not jeopardise the Czech Republic’s electricity security, IEEFA said, because of power available from existing nuclear power plants, unused hydro potential and the accelerated development of battery storage technology.