About
Prunéřov power plant
The largest single source of CO2 in the Czech Republic is the Prunéřov brown coal (lignite)-fired power plant complex. The power plant consists of Prunéřov I (6 x 100 MWe) and Prunéřov II (5 x 210 MWe), which combined emit more than 9 million tonnes of CO2 every year.
The energy company which operates Prunéřov, ČEZ Group, is pushing through a plan to extend the life of Prunéřov II by replacing all machinery in three of Prunéřov II’s blocks using cheaper technology which will not meet the minimum legal requirements on efficiency.
This will result in increased combustion of dirty lignite (brown coal) to reach the required energy output, and hence CO2 emissions will be higher than if the legally required technology were used. The price of the technology which would reach 42% energy efficiency has been estimated to be approximately CZK 10 billion more expensive compared to the project proposed by ČEZ, i.e. 0.4% of the company’s total net income over Prunéřov’s proposed extended lifetime of 25 years.
Since 2008 lawyers at the Environmental Law Service (ELS, i.e. Czech public interest law NGO - www.eps.cz), together with Greenpeace Czech Republic (www.greenpeace.cz) and local Group Chomutov pod pokličkou ČEZ have been running a campaign to stop the plan to completely renew Prunéřov II in a way which is outside of Czech and EU law and would result in at least another quarter of a century of large amounts of pollution. This pollution not only has environmental impacts local area around the power plant, but also communities around the world which are particularly vulnerable to the impacts of climate change and other transboundary environmental impacts which are caused by emissions of carbon dioxide.
Why won’t ČEZ follow the law?
ČEZ Group is central Europe’s largest and most profitable energy company and operates a virtual monopoly in the Czech energy market largely thanks to preferential treatment and strong links to decision makers enjoyed due to the 70% of ČEZ Group’s shares owned by the Czech state.
ČEZ’s business decision to build the three new blocks using out-dated and inefficient technology was made in 2005 and soon after contracts were signed worth millions of dollars for equipment for the proposed “reconstruction”, even though no permission to build had been given to ČEZ. For the boilers and related equipment alone ČEZ has contracts with the company Vítkovice Power Engineering worth up to CZK 7 billion, and the engineering company has warned that ČEZ would face heavy fines if these contracts were to be broken.
This puts ČEZ is an unenviable position: on the one hand, the project does not have the required permissions necessary to realise the plan to build with lower efficiency – and if the law if followed, ČEZ will not be able to get these. But on the other hand, ČEZ has been threatened with a backlash if contracts are broken and the project is changed to meet the legal requirements of BAT.
The Ministry of the Environment asked ČEZ to submit a proposal which could reach the legal minimum energy efficiency level. However, these requirements were repeatedly refused by ČEZ. The technical and legal deficiencies of ČEZ’s plan were exposed, and the Prunéřov renewal project was in danger of not receiving an affirmative EIA statement.
ČEZ then determinedly used its unrivalled political connections to organise a coalition of unions, businesses and the state engineer an agreement on supposed “short-term anti-crisis measures of highest priority”. This agreement gave ČEZ a new way to argue for approval of the illegal project on the basis that somehow by investing huge amounts of money in dirty and out-dated power plants, which would not begin construction for several years at the earliest, ČEZ is helping the short-term economic recovery of the country. This claim has subsequently been shown as unjustified as the new government cancelled this agreement in December 2010, signalling that the economics of the project are not really what the country needs at a time of crisis.
By forcing through the illegal project with lower efficiency, ČEZ demonstrates clearly that it is more concerned with saving money than it is about the significant climate, environmental and health impacts of Prunéřov. Not to mention the law!
It is hard to see how any other company would be able to avoid regulations and laws which are supposed to apply to everyone. That ČEZ receives preferential treatment by the authorities is no secret in the Czech Republic; but the way in which governmental decision making, expert assessment and legal processes and have been manipulated to suit the business plan of the country’s largest company is perhaps most clearly and dramatically exemplified in the Prunéřov case.
Independent expert assessment
In response to concerns raised about the validity of ČEZ’s plan for Prunéřov, the Ministry of the Environment commissioned an independent expert assessment by the Norwegian risk management company Det Norske Veritas (DNV). DNV were asked to look inter alia at whether ČEZ is obliged to meet the 42% energy efficiency level, whether the proposal would meet this efficiency limit and what the consequence of not meeting it would be in terms of additional CO2 emissions.
DNV confirmed that ČEZ is obliged to reach 42% net energy efficiency; that the proposal does not conform with legally required BAT in this regard; and that the impact of not reaching 42% efficiency would be equivalent to 205 082 tonnes of CO2 per year, or approximately 5.13 million over the proposed 25-year extended lifetime of the power plant. DNV also concluded that “the technical reasons for deviating on net unit efficiency have not been fully explored by the investor.”
This put Minister Dusík in a difficult position: on the one hand he had the country’s most powerful company, a host of industrial lobbyists and the Prime Minister, breathing down his neck and telling him to quickly award approval – but on the other hand, not only had a climate-vulnerable country made a plea for a rational decision to deny approval for the project, he also now had expert confirmation that the concerns raised about the project were completely justified.
However, on 18th March 2010, at the press conference where DNV’s conclusions were announced, the Minister did the incredible. Instead of issuing a decision, he chose to resign from his position as Minister without issuing a final EIA statement, blaming the “pressure of business” for forcing his resignation. This left the case unresolved and the position of Minister of the Environment empty. ČEZ quickly moved to use its powerful influence in Czech politics to arrange the appointment of someone who would be completely compliant with the demands of the company. The position was temporarily held by the Minister of Agriculture, Jakub Šebesta, but just a few weeks later, on 16th April 2010, a former spokeswoman for ČEZ’s coal fired power plants, Ms. Rut Bízková, was appointed as the new Minister of the Environment.
The EIA statement
On 29th April 2010, the Czech Republic’s newly appointed Minister for Environment held a press conference in Prague and gave an affirmative statement on the Prunéřov II EIA, meaning that the Czech state gave the go-ahead to the project. This was in the ČEZ power company’s favour; but was condemned for its obvious disregard of expert advice and Czech law and because it demonstrated a clear manipulation of the Ministry of the Environment’s decision making process by ČEZ.
However, it must be emphasized that the main substantive objection to the proposal – that the project would result in unacceptable additional CO2 emissions caused by the use of non-BAT technology – was recognized in the EIA statement.
The Czech Ministry acknowledged that the proposal does not conform to BAT for energy efficiency, and that this would lead to additional CO2 emissions. Consequently, the Ministry required that ČEZ reduce the generation of 205 082 tonnes of CO2 every year (5.13 million tonnes over the proposed 25-year extended lifetime) in projects other than Prunéřov II. This compensation plan is designed to off-set Prunéřov II’s contribution of CO2 emissions into the atmosphere and, hence, to reduce the transboundary environmental impacts, such as climate change, of the plan.
(Former) Minister Bízková justified the decision based on the Ministry of the Environment’s finding that air quality in Prunéřov’s local region would improve. However, the Ministry stated that reductions of these pollutants will be less than ČEZ had officially declared, and a study by Dr Šuta shows that more than 100 000 people, including more than 18 000 children in the Czech Republic, will continue to be exposed to levels of SO2 in excess of the World Health Organization’s recommended limits.
The Federated States of Micronesia is mentioned in the EIA statement, which demonstrates that the Ministry accepted FSM as a legitimate participant in the formal EIA process as an “affected state” which requested a transboundary proceeding, and therefore legitimizes the precedential transboundary EIA process.
Ms. Bízková also claimed that economic factors of the plan outweighed the environmental impacts, even though ČEZ did not submit analysis of the economic aspects of the proposal. Subsequent economic analysis conducted by independent expert organization, CityPlan , shows that the ČEZ’s plan to use less efficient technology would result in an additional CZK 10 billion of costs over the proposed extended life-span, compared to a power plant of minimum legal efficiency levels.
CO2 Compensation Offsets
On 20th October 2010, the Czech Ministry of the Environment announced that it had accepted a proposed compensation plan from ČEZ to offset the CO2 emissions resulting from the deviation from BAT. ČEZ claims that its plan will reduce emissions from Prunéřov by 84% more than BAT would. But closer analysis shows that these claims are speculative at best.
It is also far from clear if ČEZ’s offset plan will in fact genuinely reduce emissions. ČEZ is proposing the extended operation of one of the oldest and dirtiest power plants in the country, Prunéřov I. This is in direct conflict not only with the development of European legislation, but also ČEZ’s long-term and approved strategy, which had previously committed to the decommissioning of this coal-fired power plant by 2016. ČEZ is saying that it originally planned to close the older Prunéřov I power plant in 2023, but that now it proposes to close it in 2019. This is in complete contradiction to internal documents that show that all along ČEZ planned to close the power plant by 2016.
Moreover, it does not correspond with the amount of available coal deposits in the mine serving the Prunéřov power plant. If ČEZ’s original plan were to be realized then the retrofitted Prunéřov and nearby power plant Tušimice would be operational only for 20 years – which, according to ČEZ, is below the return rate of the project.
Formal permitting process
The environmental impact assessment (EIA) was by no means the end of the approval process which Prunéřov must complete in order for ČEZ to have permission to build. ČEZ must now apply for three further permits: a Land Use Permit (LUP), an Integrated Pollution Prevention and Control (IPPC) permit and finally a Construction Permit (CP).
Meeting the criteria of Best Available Techniques (BAT) is an essential prerequisite for obtaining an IPPC permit according to the law. Given that the project presented by ČEZ is below the BAT requirements for energy efficiency, ČEZ cannot obtain an IPPC permit without breaching the law. This is an insurmountable hurdle for ČEZ in its application, so it would make sense not to begin proceedings for the other permits until a decision is made on the IPPC permit.
However, ČEZ applied for a LUP on July 30th, 2010 but proceedings were suspended on August 9th for completion of the documentation. At a public hearing held at the Kadaň Building Office (map), objections to ČEZ’s LUP application were formally submitted by ELS, Greenpeace and PPČ to the local authority.
We object to the application for a Land Use Permit on the following grounds:
• The plan will have significant adverse impacts on the health of local people
o ČEZ’s own data on health risk assessment of the project, which were submitted as part of the EIA documentation, show that even after reconstruction Prunéřov will remain a major source of pollution in the area.
o Even with the new blocks, Prunéřov II would emit enough sulphur dioxide (SO2) to expose more than 100 000 inhabitants in the local towns of Chomutov, Jirkov, Kadaň and Klášterce nad Ohří to 24-hour SO2 concentrations far exceeding the values recommended by the World Health Organization – even in the hypothetical situation where all other sources of SO2were removed.
o According to the same data as presented in the EIA documentation, the proposed complete renewal of Prunéřov II would contribute to an increase in the daily maximum of SO2 in the cities of Chomutov, Jirkov, Most and Žatec.
• Flaws in the process and findings of the EIA burden the Land Use Permit documentation
o The final EIA statement is factually incorrect and illegal, therefore cannot a relevant basis for the Land Use Permit decision making process
- The documentation submitted does not adequately reflect the fact that ČEZ’s intention is to install new equipment, and not to reconstruct existing facilities.
- The proposal does not fulfil Best Available Techniques criteria for energy efficiency.
• According to the reference document BREF Energy efficiency is the most important criterion for judging the projects are large combustion plants.
• Brown coal power plant projects which intend to install new equipment are required to meet net energy efficiency of 42-45%.
• ČEZ originally declared in the EIA documentation that the new blocks would reach just 38.17% net energy efficiency, and therefore fall well below compliance with Czech and EU law. ČEZ has not yet even proved that it can reach even 40% energy efficiency at Prunéřov, and is certainly unable to reach higher levels with the sub-critical technology it proposes.
o Conditions set out in the EIA statement are not sufficiently reflected in the LUP documentation
o Some of the opinions of the administrative officials towards the LUP documentation are formally and factually flawed.
o Incorrect assessment of transboundary environmental impacts
- Zero transboundary impacts could be achieved only in a hypothetical situation where Prunéřov was shut down and replaced by a power supply with zero emissions into the atmosphere.
Because of the flaws in the EIA process and the failure for ČEZ to meet the legal minimum energy efficiency level, it is not possible for permits to be awarded legitimately. However, given the strong power and unrivalled access to key decision makers which ČEZ enjoys, it is very likely that the authorities will find it extremely difficult to say “no” to the company. Nevertheless, Environmental Law Service and its campaign partner Greenpeace, along with local NGO Chomutov Pod Pokličkou ČEZ, will continue to challenge the project on the grounds of the illegalities, bad economics and adverse environmental impacts which will certainly result.
CEZ, a Czech power company, is planning a complex renovation of its lignite-fired power plant Prunerov II, which is the biggest industrial source of CO2 emissions in the Czech Republic. Prunerov II currently emits about 7.1 million tonnes of CO2 per annum.
What is the problem? Well, CEZ is planning to modernize 3 of the 5 current blocks of the power plant (5x 210 MWe currently, 2x 210 MWe + 3x 250 MWe in the future) by using out-dated technology that would fail to reach the required level of “best available techniques” (BAT) as set out by the EU and Czech IPPC (Integrated Pollution Prevention and Control) legislation. This legislation requires a minimum of 42 % net energy efficiency for the new power plant, while CEZ proposes only about 38 %.
In order to bypass this efficiency requirement (or in other words, an argument for using older technology), CEZ management is trying to portray the renovat
ion of Prunerov II as a “retrofit”, i.e. modernization of existing plan (or installation), and not as a completely new construction of 3 blocks.
Their argument in favour of not using BAT is based on the aforementioned legislation that requires lower limits of efficiency for reconstruction projects than for projects involving the construction of new installations. However, from an analysis of IPPC legislation, this project will in fact build new machinery because all major parts (boilers, turbo set, generators, desulphuriser etc.) of the 3 blocks of the power plant will be totally replaced. There should remain only the steel structures of the boiler-room from the three blocks of the power plant.
