The Czech Republic needs to prepare for an earlier phase-out of coal than previously planned and develop low-carbon energy sources to replace it while taking steps to cushion the economic and social impacts in coal-producing regions.
This is according to the latest report by the International Energy Agency reviewing the country’s energy policies.
According to IEA, coal accounts for almost half of the Czech Republic’s power generation and a quarter of its residential heating demand, with coal set to continue to play an important role well into the 2030s under existing policies.
But new European Union energy and climate policies including the “Fit for 55” package are likely to force an earlier phase-out, as rising prices for CO2 emissions will make coal less competitive.
This phase-out of coal, however, poses energy security challenges, as coal is domestically sourced and provides for dispatchable generation capacity. The IEA highlights that continued diversification of energy sources is essential to ensure energy security while weaning the economy off coal.
“I encourage the Czech government to start making better use of the various low-carbon energy sources that can help it transition in a secure way to a cleaner energy system and power its economy for decades to come,” said Fatih Birol, the IEA’s Executive Director, who is launching the report today at an online event with Karel Havlicek, Minister for Industry and Trade of the Czech Republic.
“The shift from coal power to low-carbon alternatives must be done in a way that supports the people and communities impacted by the changes. In this context, I welcome the Czech government’s comprehensive framework for the economic restructuring and equitable transformation of the affected areas,” said Dr Birol.
For this to happen, the economic potential of all forms of low-carbon generation must be assessed and roadmaps developed to exploit the most promising options. Moreover, the legal and regulatory framework will need to be adjusted to facilitate the emergence of new business models, such as local energy communities.
The report finds that the phase-out of coal and coal mining in the Czech Republic poses economic and social challenges, as the sector is an important employer, particularly in regions with relatively weak economies. In order to ensure public support for its energy transition, the Czech Republic can make use of available European Union funds and mechanisms to help affected communities.
Since the IEA’s previous review of the Czech Republic’s policies in 2016, the country has improved its energy efficiency by deploying an increasing number of programmes, especially in the building and industry sectors. Looking towards 2030, the report recommends placing energy efficiency at the centre of the Czech Republic’s energy policy making.
Energy efficiency will help with the phase-out of coal by reducing concerns about heating and electricity generation adequacy. The report encourages the Czech government to study examples from other IEA countries and consider the creation of a dedicated energy efficiency agency for the implementation of its support programmes.
The IEA report recommends that the Czech Republic make better use of carbon price signals to encourage the use of less carbon-intensive fuels and increase energy efficiency. The IEA recommends that the government redirect at least part of the carbon tax revenues to economically weaker households to alleviate the burden of this tax for them.