Czech energy giant ČEZ expects to boost power production by 6.0 percent this year amid tentative signs that electricity prices are recovering.
The state-controlled electricity company has set its target on production of 67.3 TWh this year against 63.3 TWh last year. The increased production should come from 7.0 percent rises in output from its coal-fired power plants and nuclear power stations. “We are looking forward at the prices. We think they will go up,” said ČEZ ’s director of trading Alan Svoboda on Tuesday when asked about the planned increase in output.
With most economic forecasts seeing at the best mild or zero growth in the Czech Republic this year, a large part of the extra electricity produced is likely to be exported. Czech demand for electricity increased just 0.3 percent in 2011 to 58.88 TWh when the figures are adjusted for variations in temperature.
‘We are looking forward at the prices. We think they will go up.’
ČEZ said Tuesday that its coal output from its mining company Severočeské doly will continue at its full limit of around 25.1 million tonnes this year. Production was raised 16 percent in 2011 due to a shortage of coal on the market and demand to burn the fossil fuel because of low prices for emissions allowances. High prices for allowances encourage the use of cleaner energy sources.
High Czech electricity exports, party based on increased use of coal-fired plants, is controversial with domestic environmental groups who accuse ČEZ and the mining companies of increasing pollution with the sole aim of boosting profits and not to meet domestic power demand.
The power company’s confidence about the outlook for power prices party stems from the slight rise in prices for its pre-sold electricity. ČEZ has sold 47 percent of its expected power production for 2013 at an average price of €53.5/MWh and 18 percent of 2014 output at €54/MWh. This compares with all of its 2012 production sold at an average price of €52.5/MWh.
ČEZ earlier announced a 13.2 percent year-on-year drop in net profit for 2011, adding though that they came in better than it had forecast. It expects a 1.0 percent rise in net profit this year to reach Kč 41 billion.