Czech Republic Energy efficiency report

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1 Czech Republic Energy efficiency report Objectives: o.3 TWh of end-user energy savings by 16 o 2.1 TWh of energy savings in industry by 16 Overview - (%/year) Primary intensity (EU=0)¹ % ++ CO 2 intensity (EU=0) % ++ CO 2 emissions per capita (in tco /cap) % ++ Power generation - (%/year) Efficiency of thermal power plants (in %) % + Rate of electricity T&D losses (in %) % + CO 2 emissions per kwh generated (in gco /kwh) % + Industry - (%/year) Energy intensity (EU=0) % ++ Share of industrial CHP in industrial consumption (in %) % -- Unit consumption of steel (in toe/t) % - ++ Among best countries + Better than the EU average 1 - Below the EU average 1 --Among countries with the lowest performances Latest update: April 12 1 The European Union, as the best performing region, is used as the benchmark.

2 1. Overview 1.1. Policies: 1.8 Mtoe of energy savings by 16 The first Czech National Energy Efficiency Action Plan (NEEAP) was adopted in and was revised in 11. The second NEEAP strengthens the targets of the first plan and sets an energy savings target of.3 TWh (1.8 Mtoe) by 16, which corresponds to 9 percent savings compared with the average consumption over - (about 2.3 TWh/year of energy savings). About 28 percent of those savings should be achieved in the household sector, 18 percent in the transport sector, 11 percent in the industrial sector, 9 percent in services and 1 percent in the agricultural sector; the remaining 33 percent would be achieved through transversal measures. The Energy Management Act took effect in and was amended in and. It sets minimum requirements regarding energy demand in buildings, energy audits in buildings and energy labeling of electrical appliances. It also promotes the use of CHP and renewable energy sources (a national program is elaborated and updated every four years). The Panel Program () grants subsidies for the retrofitting of buildings. Between and 12 the Czech Republic should invest about 1bn ($0.75bn) in the Green Investment Scheme, which provides grants covering up to 50 percent of residential insulation costs Energy consumption trends: high consumption per capita Energy consumption per capita in the Czech Republic is 18 percent higher than the EU average, at 4 toe in. After a decline between and, total energy consumption grew regularly between and (+1.7 percent/year); however, it decreased in and since the economic slowdown mainly affected the industrial sector. In, energy consumption grew slightly, by 1.1 percent. Fossil fuels cover nearly 80 percent of total energy consumption: coal and lignite account for 40 percent, followed by oil with 21 percent and gas with 19 percent. Nuclear power supplies 17 percent of primary energy needs (hydropower just 1 percent). Figure 1: Energy consumption trends by sector Other Industry Power generation 40 Mtoe 30 0 The industrial sector (non-energy uses included) was the largest energy consuming sector with 39 percent of energy consumption in, but in its share dropped dramatically, to 25 percent. This fall is due to a lower energy consumption in industry (halved between and ) but also to the rising consumption of the power sector, whose share in total consumption rose from 22 percent in to 31 percent in. Czech Republic Country reports 2

3 Electricity consumption per capita is close to the EU average (about 5,6 kwh in ). The share of electricity in energy consumption increased regularly between and, rising from 12 percent to 18 percent. After a slight decrease in -, electricity consumption increased by 1.6 percent/year until and fell during the crisis. The industrial sector is still the largest electricity consumer, although its share is declining rapidly, falling from 60 percent in to 43 percent in. Figure 2: Electricity consumption trends by sector Industry Others TWh Energy efficiency trends: energy intensity remains high Primary energy intensity (total energy consumption per unit of GDP), measured at purchasing power parity, is 44 percent higher than the EU average (). Primary energy intensity decreased at the rapid pace of 2.5 percent/year between and. Between and industry drove the decrease in energy intensity, with an average 1.5 percent/year drop in industrial energy intensity (60 percent of the total fall in energy intensity). Seven percent of the overall decrease can be attributed to a reduction in the energy intensity of the power generation sector (0.2 percent/year between and ). Figure 3: Energy intensity trends 0.0% - - %/year -0.5% -1.0% -1.5% -2.0% -2.5% -3.0% -3.5% Other Industry Power generation Czech Republic Country reports 3

4 2. Power generation 2.1. Policies: minimum energy efficiency requirements in power and heat generation The second Czech National Energy Efficiency Action Plan (11) includes existing measures that were implemented in and sets minimum energy efficiency requirements for power and heat generation (mainly directed at heat generation since the NEEAP does not expect large efficiency gains in the power sector over the next -15 years). It also includes minimum energy efficiency requirements for the transmission and distribution of electricity and heat; energy savings are estimated at 50 GWh/year (ie a total of 444 GWh between and 16). The NEEAP also includes measures under the Operational Programs (OPE) launched in, which target the construction of new facilities and the renovation of existing facilities to increase the use of CHP generation Efficiency of the power sector: low-efficiency technologies prevail The efficiency of the power sector is low (32 percent in ), owing to the large share of nuclear and coal-fired generation. The efficiency rate of thermal power plants is low (30 percent compared with 38 percent on average in the EU), since high-efficiency plants (gas combined cycles) account for just 7 percent of the thermal capacity. Figure 4: Efficiency of power generation and thermal power plants Figure 5: Thermal electricity capacity, by technology % 26 GW Steam Gas turbines Combined cycles Total power generation Thermal power plants The rate of network losses has regularly decreased since (-1.5 percentage points), reaching 7 percent in. It remains slightly above the EU average of 6.5 percent. Figure 6: Electric T&D losses 9 8 % Czech Republic Country reports 4

5 3. Industry 3.1. Policies: 2.1 TWh of energy savings by 16 The second Czech National Energy Efficiency Action Plan (11) sets an energy savings target for the industrial sector of 2.1 TWh by 16. Measures taken under the Operational Program Enterprise and Innovation (OPEI) are expected to save up to 1,250 GWh by 16. They include minimum efficiency requirements in buildings and in electricity and heat generation. Investment support is available to industrial companies that carry out projects for energy savings in buildings and energy-efficient industrial processes (including CHP), and financial support is provided for R&D programs in the area of energy savings. The Energy Economy Act, implemented in, required that new boilers in the industrial sector exceeding a certain specified size had to produce heat and electricity (CHP) with a minimum level of efficiency. The promotion of power generation from CHP and renewable energy sources was reaffirmed in, when the Energy Act was amended. In the Czech Ministry of Industry and Trade launched the Operational Program Industry and Enterprise (OPIE). Energy audits were made compulsory for companies consuming more than 35 terajoules (TJ)/year (or about 9.73 GWh/year); those audits are partially subsidized (up to 30 percent of the costs). Industrial companies can apply for soft loans for energy savings investments (up to 40 percent). Subsidies were also granted to small and medium enterprises (SMEs) to modernize their energy management systems, improve their energy efficiency and implement CHP generation. The second NEEAP expects the OPIE to contribute 28 GWh to the energy savings target of 2.1 TWh by Energy consumption trends: declining industrial consumption The energy consumption of the Czech industrial sector has been decreasing on a regular basis and was halved between and ; the decline was rapid between and (6.6 percent/year) but has slowed down since then (1.5 percent/year until ). Figure 7: Trends in industrial energy consumption Mtoe The energy consumption of the industrial sector is increasingly oriented toward gas (from 15 percent in to 27 percent in ) and electricity (from 13 percent to 24 percent over the same period). The consumption of oil and coal has fallen dramatically since ; consequently, their shares in the energy mix have fallen from 49 percent to 30 percent in the case of coal, and from 16 percent to 4 percent in the case of oil. Biomass consumption is increasing, although its share remains marginal (7 percent in ). Czech Republic Country reports 5

6 Energy-intensive industries account for two thirds of industrial energy consumption (). Steel is the largest consuming sector (30 percent of total industrial consumption). The shares of the chemical and non-metallic minerals sectors are currently 19 percent and 11 percent, respectively. The paper industry accounts for 7 percent of industrial consumption. 0% 90% 80% 70% 60% 50% 40% 30% % % Figure 8: Energy consumption of industry, by source 0% Biomass Heat Electricity Gas Oil Coal/Lignite 0% Figure 9: Energy consumption of industry, by branch 90% 80% 70% 60% 50% 40% 30% % % 0% Other Paper Non metallic minerals Chemical Steel 3.3. Energy intensity trends: structural changes improve industrial energy intensity Industrial energy intensity fell at the rapid pace of 6.1 percent/year between and. That improvement was mainly driven by the decrease in the energy intensity of the chemical industry, which ranks second in terms of energy consumption (4.9 percent/year), and to a lesser extent by improvements in the unit consumption of cement and steel. Contrarily, the unit consumption of paper rose by 0.5 percent/year, but this increase had only a minor impact on industrial energy intensity due to the limited share of the paper branch in the Czech industry. Figure : Trends in the energy intensity of industrial branches 1% %/year 0% -1% -2% -3% -4% -5% -6% -7% *Including construction and mining - Total* Steel Chemical Cement Paper, Odyssee The share of CHP in industrial electricity consumption is almost twice as high as the EU average (). It grew substantially between and (+24 percentage points) and has been declining since then (from 49 percent in to 35 percent in ). Czech Republic Country reports 6

7 Figure 11: Share of industrial CHP in industrial consumption 50% 45% 40% 35% 30% 25% % Between and the energy intensity of the manufacturing industry (ie excluding mining and construction) decreased sharply (-6.1 percent/year). Although about 40 percent of that improvement was achieved through efficiency gains in the industrial branches (-2.3 percent/year), it is mainly attributable to changes in the structure of industry: the share of energy-intensive sectors in the value added dropped to the benefit of equipment manufacturing, which over the same period saw its share gain 12 percentage points in the value added. Figure 12: Trends in the energy intensity of manufacturing and structural effect 0.0% -1.0% % %/year -3.0% -4.0% -5.0% -6.0% -7.0% Real variation Change at constant structure Structural effect Czech Republic Country reports 7