The Ministry of Trade and Industry said that the Czech Republic may face serious electricity shortages by 2020 should no new nuclear blocks be build and current mining limits not extended while reliance on gas power plants and black coal power plants would mean dependence on third countries and higher costs.
Our view: We estimate that without new nuclear blocks and no extension of mining limits, the Czech Republic’s reserve margin would disappear by 2017. Replacement of the missing capacities by black coal and gas power plants would certainly increase either CEZ’s variable costs as we estimate that variable costs at gas power plants and the current lignite power plants are double or domestic electricity price would have to significantly increase more rapidly.