Emissions up, CO2 unit holdings down for Czech utility CEZ in 2015

Published 15:15 on March 15, 2016  /  Last updated at 17:58 on March 15, 2016  /  EMEA, EU ETS  /  No Comments

Czech utility CEZ Group increased its EU-regulated emissions by 3.4% in 2015, while its carbon unit holdings dropped by 8.6% due mainly to smaller government allocations, the state-owned power generator said in its 2015 earnings report released Tuesday.

Czech utility CEZ Group increased its EU-regulated emissions by 3.4% in 2015, while its carbon unit holdings dropped by 8.6% due mainly to smaller government allocations, the state-owned power generator said in its 2015 earnings report released Tuesday.

The company said it emitted 29.1 million tonnes of CO2e across the group’s operations last year, up from 28.1 million in 2014.  The rise was due to more coal-fired power across its generation mix.

It said it held 33.5 million tonnes worth of emissions units at the end of 2015, below its holdings of 36.6 million at the start of the year.

This suggests that, taking into account its 2015 EU ETS compliance obligations, CEZ was net long 4.4 million units as of the end of last year.

CEZ was granted just under 14 million units by EU governments against its 2015 emissions, while recording net purchases of 11 million allowances and 81,000 carbon offsets last year.

In contrast, the firm was granted 35.5 million free allowances in 2014, leading it to record net EUA sales of 751,000 and net offset purchases of 2.4 million.

It added that it earned around CZK 16 million (€592,000) from carbon allowance and offset trading in 2015.

CEZ also reported that it was refunded CZK 3.8 billion by the Czech government for a gift tax that the company was forced to pay in 2011 and 2012.

This followed an appeal lodged by CEZ and other energy firms with a Czech court, which last July ruled that the 32% tax imposed on utilities on their freely-allocated EUA was in breach of EU law.

The verdict paved the way for the country’s power generators to recoup as much as CZK 7.4 billion from the government.

GENERATION

CEZ Group reported that it generated 60.9 MWh of electricity across all its operations in 2015, down 3% year-on-year.

Some 29.5 TWh of that was coal-fired, a rise of 5.7%, with a further 28.1 TWh from nuclear, an 11% year-on-year drop caused by unscheduled and extended plant outages.

Its renewables-based generation, which accounted for a tiny percentage of total output, dropped 2% due to lower flow rates at its hydro plants.

CEZ said it had hedged, as of Feb. 29, around 67% of its Y+1 power, around 35% of Y+2, and around 15% of Y+3.

The percentages were similar to respective figures of 70%, 33%, and 14% posted by the firm nearly a year ago.

The company said it forecasts net profit to drop by 35% this year to CZK 18 billion crowns, mainly due to lower power prices and more asset write-downs, which have also gutted utility earnings across the rest Europe.

CEZ has submitted a bid for the German lignite mining and generation assets of Swedish-owned utility Vattenfall.  A decision on that sale is expected this year.

By Mike Szabo – mike@carbon-pulse.com