Energy Market Actors
Electricity Market
Structure of the Power Sector
CEZ a.s.
CEZ a.s. is the main electricity production company. It was founded by the National Property Fund in 1992 as a joint stock company. 67.61% of the shares are held by the National Property Fund, 21.94 % by institutional investors, 4.96 % by individuals, and 5.48 % by custodians.
In 2003, CEZ merged with the distribution companies, since 2006 CEZ is the sole stockholder of the Northern Bohemian coal mine company. CEZ group includes all in all over 90 companies, 24 of them foreign companies, among them three distribution companies in Bulgaria, one in Romania and two power plants in Poland. It operates 2 nuclear power plants, 15 coal-fired power sources in the Czech Republic, 3 coal-fired sources abroad, 34 hydro-power plants including 3 pumping stations, 2 localities with wind-power plants and 1 solar- power plant.
With 60 TWh per year CEZ accounts for more than two thirds of the country’s electricity generation. The rest of the electricity is produced by independent power producers, mainly in combined heat and power plants.
CEZ is among the three largest heat producers of Czech Republic. Furthermore, it is involved also in mining and processing of by-products.
CEPS a.s.
(Czech Transmission System Operator) is since 1999 responsible for development, management, operation and maintenance of the transport network. It was statutorily unbundled from CEZ. It controls the operation of interconnections, provides real time load dispatching services and is responsible for ancillary services. It is a subsidiary of CEZ.
Eight regional joint stock companies carry out electricity distribution to final consumers. These companies are partly owned by foreign companies, partly (34 to 59 %) by CEZ.
Status of Deregulation
Regulatory Body
In 2001, the Energy Regulation Office (ERU) was established in compliance with provision of energy law. Financed by the State Budget, its main tasks are to grant licenses, regulate prices, and to resolve disputes related to access to transmission or distribution networks. It is responsible for price setting;
Opening of the Market:
- The threshold 40GWh/a (approx. 30% of the market) (since January, 2001) was lowered to 9 GWh/a in 2003.
- Accelerated, to start January 2004: consumers using more than 100 GWh/a.
- Since January 2006, all customers are eligible.
Access to the Network
Regulated Third Party Access.
Competition in Generation
Authorisation procedure for plants above 30 MW, responsible authority: Ministry of Industry and Trade.
Unbundling and Unbundling of Transmission system operator
The Energy Law mandates separate accounts for each licensed activity that a company undertakes.CEPS was statutorily unbundled from CEZ. The new law prohibits the TSO from holding a licence in any other business activity in the sector. Licences for transmission are exclusive licenses for the whole Czech territory.
Tariff Setting
Responsible authority is the regulator.
Privatisation
In 2002, privatisation of CEZ failed because of too low offers from the side of the two bidders EDF and Enel-Iberbola.
Oil and Gas Market
Unipetrol is a group of companies operating in the chemical industries sector. The former state company was privatized in June 2004. In 2005, the share of the National Property Fund was transfered into the hands of the Polish company PKN ORLEN.
The group contains mainly:
- Ceská rafinérská (a joint venture with the multinational companies AgipPetroli, Conoco and Shell) and Paramo, the largest Czech producers of motor fuels, bitumens, lubricants and other products related to crude oil processing.
- Chemopetrol, Kaucuk and Spolana, involved mainly in the production of petrochemical products and plastics.
- Benzina, the largest network of petrol stations in the Czech Republic.
In 2003 the former state company Transgas is owned at 97% by RWE Gas, is responsible for transport, transit, and sale of natural gas. Gasexport, a subsidiary of the Russian Gazprom, supplies gas to Transgas. Besides contracts with Russia, there exist long term contracts with Norway and Germany. Eight regional companies take care of the distribution. In 2003, Transgas´s import monopoly is to expire, between 2005 and 2008 the Czech gas market is to be gradually opened to meet the requirements of the Gas Directive.
Coal Market
All former State owned coal production companies, after having been transformed into joint stock companies, are now held at more than 50 % by the National Property Fund. It is planned to privatise them.
Heat Market
In Czech Republic, about one third of the households are supplied with district heat. The electricity company CEZ is one of the main suppliers of (district) heat in the country. The companies active in the district heating sector are organized in the Czech District Heating Association.
