ACTA UNIVERSITATIS AGRICULTURAE ET SILVICULTURAE MENDELIANAE BRUNENSIS Volume 64 114 Number 3, 2016 http://dx.doi.org/10.11118/actaun201664031001 PRICING ELECTRIC POWER IN THE CZECH REPUBLIC AND IN SELECTED COUNTRIES Eva Mazegue Pavelková1, Iva Živělová2 1 PPG Industries Czech Republic, s. r. o., Holandská 6/8, 639 00 Brno, Czech Republic 2 Department of Regional and Business Economics, Faculty of Regional Development and International Studies, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic Abstract MAZEGUE PAVELKOVÁ EVA, ŽIVĚLOVÁ IVA. 2016. Pricing Electric Power in the Czech Republic and in Selected Countries. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 64(3): 1001–1011. This paper focuses on state intervention in the pricing of electricity from renewable power sources in the Czech Republic when compared with the pricing in the Slovak Republic, Germany, France and Italy. In these countries the state intervention is implemented in diff erent forms, but the critical part of the price is regulated everywhere by the state. The price of electricity is determined by its production costs, which depend on the source from which electricity is produced. The highest cost of electricity is required to generate renewable energy, particularly solar power, while the lowest costs of power are associated with its production by coal-fi red and natural gas-fi red thermal power plants. However, hydroelectric power plants attain clearly the lowest cost for generating electricity. State intervention includes supporting power generation from renewable power sources by guaranteeing purchase prices. Keywords: the price of electricity, power generation from renewable power sources, the cost- eff ectiveness of power generation, state intervention in the electricity market INTRODUCTION A substantial factor that has an impact on the The ever-increasing need for electricity for decisions of politicians and national governments industry, transport and households can only be met on which resources of power generation will by power plants with suffi cient output. Electricity be supported, is its cost eff ectiveness, which is converted from heat, from the energy of fl owing signifi cantly aff ects the subsequent price of water, from nuclear energy (the fi ssion of uranium electricity. The price of electricity in the Czech nuclei), from wind or sunlight (Goňo, Král, 2008). Republic is currently relatively high in comparison The available resources for generating electricity in with other countries (Federal Network Agency, the Czech Republic include in particular thermal, 2012). nuclear, hydroelectric and solar power plants. As The main aim of this contribution is the analysis far as renewable power sources are concerned, of the system of electrical prices paid by households apart fromhydroelectric plants, it is mainly solar in the Czech Republic in comparison with prices in and wind power which has the greatest importance Slovakia, France and Italy and assessment of impact and prospects. Due to its geographical conditions, of state intervention on this commodity price. the Czech Republic has a relatively limited use of wind and solar energy (Mastný et al., 2011). MATERIAL AND METHODS However, the use of solar energy for generating The price of electricity is aff ected not only by the electricity from solar photovoltaic panels received cost of its production, but also by state intervention, a high level of state support, which unfortunately whose share on the fi nal price varies in diff erent was not eff ectively monitored and regulated in the countries. The paper fi rst looks at the structure of Czech Republic, unlike in Germany, France or Italy, power generation from diff erent media segmented and it experienced a sharp uncontrollable growth into thermal and nuclear power plants, and plants (Pavelková, 2013). 1001 1002 Eva Mazegue Pavelková, Iva Živělová generating electricity from renewable energy does not come to contact with other respondents sources, which include hydroelectric, wind, solar interviewed. The optimal group size for the Delphi and bio-gas power plants. Each of the production method varies between ten and twenty participants- media determines to a large extent the cost of experts. production, where the performance is measured The study uses the responses received by by an indicator of the power density in kWh/m², questionnaires (see Pavelková, 2013). With the help which is defi ned for diff erent types of plants. The of a questionnaire interview was conducted with production costs are shown in EUR per 1 MWh, ten experts from the fi eld of energy sector from the again according to the type of power plant. In Czech Republic, Slovakia, Germany, France and selected countries (the Czech Republic, the Slovak Italy. Part of the issues asked also included questions Republic, Germany, Italy and France) the structure like “What are the key factors infl uencing the price of energy of electricity prices for households is compared, in your state?” and “What are the key factors in your opinion, including various items, some of which are regulated aff ect the price of production of energy from photovoltaic by state intervention. The level of regulation varies power plants?” From each country two experts were in diff erent countries. The structure of prices for approached. electricity is assessed in the Czech and Slovak Republics in the years 2009 to 2012, in Germany RESULTS AND DISCUSSION – due to the availability of data – in the years 2010 and 2011, and in France and Italy for similar reasons in 2011 and 2012. The reference data were drawn Comparison of the Structure of Power from available resources and were subsequently Generation According to Sources processed into graphs shown in the article. in the Czech Republic and Selected Countries To confi rm results obtained by comparison the The cost of electricity generation depends on the Delphi method has been used which belongs to source from which it is produced. The structure a group of intuitive prognostic methods. It involves of electricity generation in the Czech Republic the gradual discovery and sequential comparisons according to sources is evident from Fig. 1. of experts’ opinion on the future development of The diagram above shows the increasing share chosen area while a mutual anonymity, feedback of power generation from renewable sources. Until control of information and statistical identifi cation 2000, the primary source of renewable power in consensus of expert group are guaranteed. The the Czech Republic was hydroelectric power. Since method is implemented through the sophisticated 2000 other sources have been used to generate system of chosen questions in the fi eld of the study electricity – bio-gas and waste heat. Since 2009, which are asked a selected group of experts in the electricity has been produced in solar power plants. form of questionnaires or personal interviews In 2012, out of a total amount of 87,947 GW, 5,927 of survey organizer with individual experts to GWh of electricity was produced from renewable identify individual opinion. The survey participant sources, representing 6.7% of the total amount of 1: The structure of electricity generation in the Czech Republic from 2012 data (GWh) Explanation: Parní elektrárny včetně spalovacích = Steam power plants (including combustion) Jaderné elekrárny = Nuclear power plants Vodní elektrárny = Hydroelectric plants OZE bez vodních elekráren = Renewable sources (except for hydroelectric) Source: http://issar.cenia.cz/issar/page.php?id=1560 Pricing Electric Power in the Czech Republic and in Selected Countries 1003 electricity produced in the Czech Republic, while, bio-gas and waste heat, which represents 1% of the for example in 2009 this portion was only 2.8%. total. Power generation in solar power plants is The question is what impact the planned very low in this country, representing less than one expansion of nuclear power production will have percent of total production. France can be labelled on the price of electricity, and also how it will be unequivocally as the nuclear superpower of the taken by other European countries, some of which European Union. However, in the future they must (e.g. Austria, Germany, Italy, etc..) seek the maximum take into account the high costs to retrofi t existing elimination of nuclear energy in the future. It is nuclear reactors to meet the international safety likely that the price of electricity will also refl ect standards set by the International Atomic Energy the new costs linked to ensuring adequate safety of Agency (IAEA). nuclear power plants operation. In Italy generation of electricity from thermal The above-mentioned increasing share of power plants has dominated since 1990. Regarding renewable sources in generating electricity in the renewable power resources, due to its geographical Czech Republic corresponds with the expected location and natural conditions, this country development outlined by the provisions of the quite understandably uses hydroelectric and wind European Parliament and Council Directive power plants. Since 2008 up to the present, the 2009/28 / EC on promoting power generated from share of thermal power in the country has been renewable sources and amending and subsequently decreasing and the generation of electricity from repealing Directives 2001/77 / EC and 2003/30 / EC. renewable resources has been increasing. In 2010, The Directive divided among the EU Member States the production of renewable energy in this country the common goal of achieving a 20% share of power attained 41% of the total amount of electricity from renewable sources in fi nal power consumption produced. Power generation in nuclear power plants by 2020. The target for the Czech Republic was set in Italy is minimal. The country has also expressed at 13% of power from these sources in fi nal energy its intentions, along with Germany, to turn away consumption by 2020. from nuclear energy produced in its territory in In Slovakia generation of electricity from nuclear the future. For this reason, a substantial portion of power plants currently dominates, which makes electricity is imported from France and Switzerland, up 53% of total production.