The Czech heating industry supplies heat to both citizens and companies. Over the past month, it has become evident that this essential infrastructure is not only susceptible to vulnerabilities but also needs innovative approaches. In this double interview we conducted for you, we explore the collaboration between the heat supplier and the regional city. The perspectives of business and government leaders shared here offer insights on how to cooperate effectively and establish mutually beneficial priorities.
Kamil Čermák graduated from the University of Economics in Prague and Erasmus University Rotterdam. His career began as a reporter and presenter at Czech Television, after which he served as a spokesman and advisor to the Minister of Industry and Trade. Since 2016, he has been the Chairman of the Board of Directors and CEO of ČEZ ESCO. Additionally, Kamil Čermák is the Chairman of the Board of the Alliance for an Emission-Free Future and the Modern Energy Association. He is also a member of the College of the Post Bellum Memory of the Nation.
Petr Nedvědický graduated from the University of Economics in Prague and J. A. Comenius University in Prague, furthering his education through his own business ventures. He has been serving as a councillor since 2016 and became the mayor of Ústí nad Labem in 2018. In his free time, he enjoys engaging in various sports and outdoor activities with his family.
What implications does the end of coal have for the Ústí nad Labem Region?
Petr Nedvědický
I believe the end of coal represents a significant opportunity for the Ústí nad Labem Region. While the coal industry still provides many jobs and supports subcontractors, it is ultimately a relic of the past. This shift presents a chance to benefit the people, the landscape, the economy, and the environment. After serving as a resource base for over a century, our region in the north deserves a break. Coal can undoubtedly be replaced, as alternative technologies are already available. Personally, I favour nuclear power, but I am also a proponent of renewable energy sources.
Kamil Čermák
I share the same view. As the coal industry comes to an end, we need to find alternatives to replace its jobs and economic contributions. ČEZ is aiming to transition its coal sector employees into modern industries that have a sustainable future, such as the green heating industry or lithium production.
What are your company’s plans for modernising heating in the region?
Kamil Čermák
We recently celebrated 100 years of central heating supply in the Czech Republic. While Western European countries are not very familiar with it, East Germany and Scandinavia have some experience in this area. However, in this country, it is a significant phenomenon, supplying 1.5 million businesses and households nationwide, which means 4 million people. Where it works well, it should be preserved as much as possible. It is a unique system, and the Ústí Region is, without exaggeration, its showcase. By the way, the construction of the important Trmice heating plant in Ústí began as early as 1913 and started supplying central heat in 1920. Therefore, on behalf of ČEZ and ČEZ ESCO, I would like to make it clear that we intend not only to maintain this system but also to transform, optimise, and develop it so that it continues to function for decades to come. You will never hear from us that with the end of coal, ČEZ will withdraw from the North.
ČEZ aims to rebuild heating plants across the Czech Republic by 2030, investing tens of billions of Czech crowns. Where we find agreement with cities and customers, the heating plants will be decarbonised. Each location will have a tailor-made plan. In most cases, the core will be a biomass source, supplemented by gas boilers and cogeneration for the winter period when heat demand rises sharply. Additionally, new renewable sources will be constructed to complement this setup. The construction of new heating plants will have a positive environmental impact throughout the Ústí nad Labem Region. It will be greener and there will be large lakes instead of opencast mines.
Do you believe this extensive rebuild is achievable? What is the expected timeline for its completion?
Petr Nedvědický
I do not believe there is an option to not get it done. With coal resources depleting, we must find new sources to provide heat for our residents and businesses. I am pleased that ČEZ is planning these significant long-term investments with us. We are already addressing the future of the Trmice heating plant and the heating supply for the other bank in Ústí.
Kamil Čermák
Officially, coal is expected to be phased out by 2033, as per the government’s decision. However, economic factors suggest this could happen much sooner. We must be prepared for that eventuality and based on the current pace of preparations across the ČEZ Group, I am confident we will be ready. Evidence of our readiness is already apparent as we offer high-quality integrated solutions to sites and companies transitioning away from coal. These solutions encompass energy savings, lighting upgrades, cogeneration, new air conditioning systems, as well as photovoltaics and heat pumps. In essence, the central supply will need to be supplemented by decentralised local sources.
What level of investment will the city of Ústí and the entire region allocate for the transformation?
Petr Nedvědický
The Region is utilising resources from the Fair Transformation Fund to restructure the coal industry. Additionally, city budgets also include investments in energy transformation. However, we primarily depend on investments from our partners in the energy sector, such as ČEZ.
What investments will be necessary for the transformation of the heating industry?
Kamil Čermák
In our case, the investment will amount to tens of billions, with a significant portion directed towards the Ústí nad Labem Region. Let me provide some specific examples of our preparations for the transformation of the heating sector in the entire Ústí nad Labem Region. We have acquired Actherm Distribuce, the heat distributor for Chomutov and its surroundings. While this might seem like a small step on a national scale, it represents a significant advancement for our continued presence in the region. As a result, we have become the heat supplier for additional 16,000 households.
This provides us with greater confidence in the viability of investing in the construction of new heating sources in Prunéřov and Tušimice. In Prunéřov, we plan to utilise biomass and gas, with longterm biomass supply contracts already secured. The construction of the Prunéřov-Kadaň link will result in a truly comprehensive heat supply network. The Tušimice site will be maintained and will serve as an additional backup source for the entire system. We have also installed a large 4 MW battery in Tušimice, which acts as a stabilising element for the power system.
In Ledvice, we have initiated a comprehensive reconstruction programme utilising biomass and gas units. This will enable the new Ledvice facility to supply heat to 20,000 households.
Inauguration Ceremony of the Orange Playground by the ČEZ Foundation with representatives from the ČEZ Group and the City of Ústí nad Labem in attendance.
Let us get right to Ústí nad Labem. What are the city’s specific expectations from the heating industry overhaul?
Petr Nedvědický
The modernisation of the heating industry in Ústí is well underway. The initial project involves constructing a biomass boiler, supplemented by steam-gas sources, which will fully replace the existing coal boilers. I am confident that the city will soon have a heating system based on modern, sustainable sources.
As a resident of Ústí, I am particularly looking forward to the new heating plant in Trmice. However, my expectations are even higher for addressing the major issue of heat supply to the city’s right bank, which affects 16,000 residents. We are currently facing significant challenges with the existing supplier. Our efforts are focused on decentralising and transitioning from outdated technologies to Combined Heat and Power (CHP) units. Naturally, there are concerns regarding sustainability and the cost of heat for en customers. Nonetheless, I believe that Ústí will continue to be of interest to ČEZ.
Kamil Čermák
With a multi-billion dollar investment, we will establish a power source at the Trmice heating plant that will ensure a stable supply for Ústí’s left bank for many decades. The transition away from coal in the left part of the city will primarily be achieved through the aforementioned steam-gas cycles, supplemented by biomass. We anticipate that the heat supply to customers will be managed by the company Tepelné hospodářství města Ústí nad Labem (THMÚ), a joint venture with the city. Additionally, as the mayor has stated, we are prepared to serve the right bank of Střekov if necessary, following a preliminary agreement with the city management. This would involve decentralised sources, particularly cogeneration units, to meet the needs of the local 16,000 residents. Thus, the heat supply for the entire city of Ústí would be addressed through a combination of central supply and decentralised elements such as micro-cogeneration, heat pumps, and solar panels.
Obviously, the success of these initiatives will also depend on the cooperation of other major customers in the city, particularly Spolchemia, which currently consumes around half of the heat generated by the Trmice plant under a long-term contract. We are committed to retaining this crucial customer by ensuring reliable and efficient service. Our ambitions are high, and we aim to transform Ústí into a cutting-edge hub within the Czech Republic’s heating industry.
How does collaboration within the municipal heating sector function?
Petr Nedvědický
I believe the mutual trust is strong. Our collaboration with ČEZ through our joint venture, THMÚ, has been ongoing for quite some time, during which we have truly gotten to know each other and understand our capabilities. I regard ČEZ as a reliable and fair partner. We engage in open and honest discussions and are able to reach consensus. I value our joint dialogues, which help us overcome challenges and find compromises.
ČEZ has consistently maintained a friendly approach towards Ústí, engaging in discussions about plans and specific investment allocations. In my view, this exemplifies a strong relationship between an investor and the city. We have clear assurances that the heat supply will be sustained, which will also bring significant environmental benefits. Thus, we view the continued presence of ČEZ in this region positively, not just as customers but also as equal partners.
Kamil Čermák
What can I say? We essentially row the same boat, united by our mutual commitment to a coal-free heating industry. I must add that the collaboration with the city administration, the mayor, and my colleagues at THMÚ is excellent. We are grateful for that.
Ústí nad Labem is known as a coal region. How will this transition you both are discussing impact employment in the area?
Petr Nedvědický
Currently, ČEZ employs around 6,000 people in the Ústí nad Labem region. While the end of coal will undoubtedly lead to the loss of some jobs, new activities and industries hold significant potential for job creation. ČEZ plans to construct new heating and renewable energy plants, which will need skilled personnel for their operation and management. I am confident that the investments ČEZ is making in the region – not just in the heating sector, but also in the development of lithium and related industries, renewable resources, and small modular reactors – will have positive impacts and generate demand for a wide range of professions.
Kamil Čermák
It will certainly be challenging for us. However, we aim to offer our employees new perspectives and opportunities to retrain and transition into promising new energy industries. For instance, the heating industry is evolving beyond just supplying hot water or steam; it is becoming a part of a broader sector known as ESCO – advanced energy services. Today, when we approach customers, we look at their needs comprehensively. We assess whether they require energy-saving projects, photovoltaics, energy management, and so forth, in addition to heat. It is inefficient to simply replace one component without considering the entire system, so this presents an excellent opportunity to upgrade everything. The ESCO sector, in particular, holds the promise of good, sustainable jobs.
Thank you for the interview.
