Kamil Čermák, CEO of CEZ ESCO, outlines how the company has evolved into a leader in modern energy over the last decade. He explains how increasing demand for efficient solutions is the primary catalyst for further growth and highlights the future significance of heating projects, flexibility, and energy storage.
Over the past decade, the company’s revenues have in creased dramatically from a few billion to tens of billions of Czech crowns, with EBITDA surpassing a key milestone. How has the company evolved during this time? What do you see as the most crucial driver for future growth?
CEZ ESCO has transformed dramatically over the past ten years. Initially, it had two subsidiaries and six hundred employees. Now, it has grown into a holding company with 2,500 employees and dozens of subsidiaries. We have emerged as the leader in the Czech modern energy market, with our greatest strength being the comprehensive range of services we offer. These include renewable energy sources, lighting replacement, energy savings, the modernisation of ventilation and heating, cogeneration units, and integrated heating services, which are a key focus for us in the years ahead. The main driving force behind our development is the genuine demand from customers for efficient and modern energy solutions across industries, businesses, and the public sector. Our customers do not want ideology; they want real results we can deliver and guarantee. Companies are upgrading their energy systems because it benefits their future competitiveness, enabling them to calculate real savings and reap other advantages such as improved safety, comfort, and reduced energy consumption. I am pleased that we are also innovation leaders, which we view as a key driver for the coming years. Areas such as energy storage, power balancing services, and flexibility will become increasingly important as renewable sources expand. Healthy market competition motivates us to aim higher, continually advancing in digitalisation and technology. For instance, our innovation site in Ivančice integrates modern heating systems, renewable energy sources, heat pumps, and smart energy consumption management. This project earned us an award in the Smart Cities 2023 competition.
At this point, the company is concentrating on energy savings, reducing carbon footprints, and solutions related to electromobility, cogeneration, energy storage, and heating. Which of these areas do you view as your most significant competitive edge and simultaneously the biggest challenge for the next two to three years?
We see significant potential in all these areas, and our customers regularly seek our advice and consultations on similar solutions. However, one of the major challenges in the coming years will be integrated heating services. For us, district heating is one of the most substantial investment opportunities in recent decades, and we are ready to in vest tens of billions of CZK into it. The depletion of coal in a few years does not imply that the CEZ Group’s activities in coal-mining regions will diminish. On the contrary, we are progressively updating our heating sources to guarantee reliable heat delivery to customers in cities, towns and villages throughout the Czech Republic. This includes locations like Dětmarovice, Tušimice, Prunéřov, and other key heating sources, especially in northern Bohemia and northern Moravia. We extend our gratitude to all our partners from cities, towns and villages for their challenging but fair negotiations on long-term heat supply contracts, which allow us to make these investments and remain a significant employer in these regions. Heat systems are quite complex nowadays, and we approach each situation individually based on the specific location. Where economically viable, it is crucial for us to sustain a centralised heat supply, which about 40% of consumers in this country depend on. Our heating plants will primarily rely on natural gas and biomass. However, we are also integrating modern technologies like cogeneration units, photovoltaics, and others into our heating source mix. Furthermore, we are collaborating with cities on comprehensive projects that include modernising heat distribution systems and exploring other potential energy services, such as energy management, EPC projects, and renewable sources. This approach enables us to achieve the greatest synergies and efficiency, leading to optimal consumption on the customer’s side.
Your energy-saving service through EPC (Energy Performance Contracting) ensures customers achieve guaranteed cost savings. How are the needs of clients – such as large companies, cities, or hospitals – evolving regarding measurement, sustainability, financing, and risk? Additionally, how is CEZ ESCO preparing for regulatory pressures, energy inflation, and changes in the energy market to provide its partners with genuinely relevant long-term solutions?
In EPC projects, the motivation for customers is consistently similar – they aim to save money and enhance the comfort of their indoor environment. This has been consistently confirmed by hospitals, which are frequent clients. A key benefit for public institutions is that they do not need to cover initial costs, as the project can be repaid over the years from the savings, which we guarantee contractually. additionally, subsidy programmes are available for EPC projects. Our strength lies in providing truly comprehensive solutions that are currently available on the market with guaranteed savings. We help our customers stay competitive and save money by developing their own renewable energy sources, modernising ventilation and heating systems, and implementing building modifications and temperature control. Through these integrated services, we have saved our customers over three billion Czech crowns in energy costs. Additionally, we constantly monitor market trends and new products to offer to our clients.
