Bloomberg News

CEZ to Complete Pocerady Gas-Fed Power Plant Later Than Expected

June 20, 2013

CEZ AS will complete its Pocerady natural gas-fired power plant later than planned amid record-low profitability of burning the fuel to generate electricity in the Czech Republic.

The 841-megawatt facility in the northwest of the country should be completed by the end of the year instead of in June, according to CEZ Trading Director Alan Svoboda.

“It’s only a small delay,” Svoboda said in an e-mailed response to questions. “It depends on the outcomes of the scheduled test runs.”

A surplus of subsidized renewable energy has damped electricity prices in the Czech Republic. The loss from using gas to generate power in the central European nation dropped to a record last week as a slump in carbon permits made it more attractive to burn coal, according to broker and exchange data compiled by Bloomberg.

Czech power for 2014 has dropped 16 percent this year, broker data show. The loss from burning gas to generate power, or clean-spark spread, for sale next year in the Czech Republic dropped to a record 19.42 euros a megawatt-hour on June 14 and was at 18.64 euros yesterday, according to data compiled by Bloomberg. That compares with a profit of 6.93 euros using coal.

“Many utilities invested so many billions of euros in clean, especially combined cycle gas power plants, yet all of these assets are stranded. They don’t produce because they’re out of the cost curve,” Svoboda said at a conference in Prague yesterday. “It’s a wasted investment opportunity and a wasted opportunity to cut emissions.”

The flow of subsidized renewable power is undermining the functionality of the European Union’s carbon emissions market and has been one of the main drivers of carbon prices declining to “practically zero,” Svoboda said yesterday.

“We will see what market situation will prevail next year,” Svoboda said when asked if the Pocerady plant could be idled because of low margins. After completion, the plant will go through a series of operational tests, he said.

To contact the reporter on this story: Marek Strzelecki in Warsaw at mstrzelecki1@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at Paulsson@bloomberg.net


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus