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Position of the Czech Republic to the Green Paper on European Strategy
for Sustainable, Competitive and Secure Energy COM (2006) 105 in its
final version of 8 March 2006
The Czech Republic appreciates the Commission’s work on the Green Paper on European
Strategy for Sustainable, Competitive and Secure Energy (hereinafter „the Green Paper“),
which it considers to be a reasonable basis for an open pan-European debate at all levels.
The Czech Republic views the issue of energy security as a very significant problem affecting
economic and political stability of the European region. The prospect of EU’s increasing
dependence on imports of energy sources, adverse increase of greenhouse gas emissions and
limited readiness for reacting to crisis situations are the most important reasons for speeding
up the work on developing common approach to energy policy in Europe.
The Czech Republic fully supports creating the Energy Policy for Europe and agrees to
the objectives set by the European Council in March 2006, based on preserved
sovereignty of the Member States over their energy sources and energy mix and full
respect for their local conditions.
The Czech Republic appreciates the drawing up of a regular Strategic EU Energy Review as
suggested in the Green Paper that should become the basis for future energy policy. In our
opinion, such review should contain both medium-term and long-term outlooks and analyses
subject to financial and economic calculations and strategic plans. Furthermore, it should be
supplemented with a technical and economic analysis reflecting current and future
geopolitical conditions and should differentiate between short-term needs and medium-term
and long-term outlooks.
With respect to individual priority areas of the Green Paper:
Ad 1) Energy for growth and jobs in Europe: completing the internal European electricity
and gas markets
1. What new measures should be taken at Community level and at national level to create real
single market?
The Czech Republic fully supports completion of the single energy market - under the
conditions of the existing legislation. Unless the impact of the existing legislation is
sufficiently assessed and tested in practice, no new legislative rules or additional institutions
should be introduced. Energy efficiency is an exception to this - particular attention needs to
be paid to it and further special efforts should be made.
The Czech Republic considers the regional level as a logical intermediate stage between
national markets and the single market. For this reason, we support the creation of regional
energy markets and initiatives leading to this objective. More intensive cooperation and
coordination of transmission system operators and convergence of national regulators
competences represent additional steps to secure a single European market. At this stage,
however, we do not deem it necessary to establish a new institute of European regulator. The
Czech Republic supports consistent approach towards cross-border issues. For this reason, we
appreciate Regional initiatives commenced by regulators this year which are aimed at
removing barriers to the integration of regional markets in the first instance. We also support

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the development of common rules that would supplement the existing legislation, such as
Guidelines of Best Practices in the area of “transparency”, “unbundling”, etc. which are
prepared within ERGEG.
Intensive interconnection between individual Member States is an important element in the
creation of a single energy market. The Czech Republic supports the preparation of a Priority
Interconnection Plan targeted at infrastructure leading to the strengthening of investments and
diversification of energy sources and transmission routes.
In comparison to the target set by the Barcelona European Council for minimum
interconnection levels between Member States, the Czech Republic’s interconnection is
currently at 25 %. We expect that the quality of interconnection is going to be improved in
compliance with the Barcelona target also among other Member States. For this purpose, it is
necessary to identify all bottlenecks in transmission networks (in particular within
interconnections of the UCTE network) and set the hierarchy of priorities for their
strengthening. In connection with this objective, it is necessary to prepare a detailed proposal
for projects for the purpose of their implementation, including the principles of economic and
technical support for these projects.
The interconnected electricity networks will require high level of coordination and control of
electricity flows from producers to consumers. In this context, we have to mention the issue of
network overload that is often resolved at the expense of stability of the Czech Republic‘s
power grid. The necessary speeding up of interconnection between transmission systems
should meet its both economic and security criteria. At the same time, it is necessary to ensure
sufficient spare capacity for power generation.
With the aim of securing reliability of electricity supplies and preventing their serious
blackouts, we support the creation of common information and coordination centres for
transmission system operators at regional levels. The Czech Republic has its specific
geographic and strategic position in the EU, in particular in terms of transit of energies, and at
the same time it has a well-functioning transmission system operator who ensures reliable
transmission of electricity not only in the Czech Republic, but in the whole Central Europe.
The Czech transmission system operator has also experience in cross-border auctions and
plays an important role in cooperation with other transmission system operators of Member
States, in particular in the Central European region.
2. What should the „European Transmission System Code“ contain in order to create a single
European system?
A proposed European grid code should set in the future common principles for all
transmission system operators and must be proposed by joint working group of experts of EU
25, discussed and approved at the relevant EU levels in order to become a binding instruction
for the management of transmission systems.
3. How can the European Union, apart from securing the well-functioning market, stimulate
investments in infrastructure and production capacities?
The Czech Republic is of the opinion that due to the long-term return on investments it is
necessary to ensure a stable, long-term and transparent regulatory framework. As far as the
steps leading to the strengthening of support for investments in the energy sector are
concerned, the Czech Republic is ready to support in particular:

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• developing a common plan for priority actions targeted at security of energy
infrastructure;
• adoption of common rules for the use of long-term contracts;
• enforcing the incorporation of actions supporting diversification of energy sources and
transmission routes into the existing EU programmes and funds, including possible
preparation and adoption of new specific programmes;
• increasing budget in the area of Transeuropean Energy Networks;
• inclusion of energy projects into "Public private partnership".
4. How to ensure that all Europeans enjoy access to energy at reasonable prices?
In the Czech Republic’s opinion this can be achieved best by completing the integrated and
competitive electricity and gas market. It is also important to endeavour to achieve stability
in world oil and gas markets and other energy commodities markets. For the EU, building
stable relationships with third countries is of key importance, namely both with energy
suppliers and energy consumers, with whom the EU increasingly competes over access to raw
materials. Also massive putting into practice of new technologies will be essential for EU
consumers, while their increasing use should result in economies of scale and therefore
reduction of unit costs.
Ad 2) Security of supply and solidarity between Member States
6. Which measures can be taken at Community level to prevent energy supply crises
developing?
The Czech Republic considers promoting dialogue, cooperation and coordination with third
countries to be of key importance for ensuring energy security of the EU:. The EU needs to be
able to define its strategic objectives, both with respect to energy suppliers and energy
consumers. The Czech Republic considers the measures proposed in the Green Paper as
essential basis that may be further deepened and expanded in the future.
In order to secure reliable supplies of electricity, gas and oil, it is necessary to have in place at
Community level technical and information systems allowing the prevention of energy supply
crises and flexible control if such situations arise (based on principles of the emergency
situation solution system with respect to oil according to the IEA). We support measures that
would lead to making better use of existing mechanisms, or – following an impact assessment
- consider new mechanisms. Not only from the viewpoint of the Internal Market but also from
the viewpoint of ensuring security of supplies we consider it necessary to speed up
interconnection between transmission systems that will take into account, in particular,
economic and security criteria.
In order to ensure reliable supplies and solution of crisis situations, it is advisable to review
the entire gas system with the aim of establishing a system of emergency gas supplies,
including for instance the building of sufficient capacity of storage tanks (natural gas or
liquefied natural gas, LNG) and the required infrastructure. It is necessary to take into account
the existing reality in the gas market, to reflect local geological, geographic and climatic
conditions, funding and economic and operational aspects. Consequently, these issues need to
be discussed thoroughly within the entire EU.

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7. Which measures need to be taken at Community level to ensure emergency management of
energy supply crises, if such crises occur?
In case of occurrence of energy supply crises, the Czech Republic supports deepening of
solidarity between Member States. Given the interrelatedness of markets between Member
States, it will be necessary, inter alia, to develop options for the solution of model situations
applicable to the behaviour of interconnected systems. The mechanism of measures based on
solidarity of Member States should also include Candidate Countries and immediate
neighbours of the EU. The Czech Republic is ready to participate fully in the debate on future
possible form of such mechanism.
However, as already mentioned above, we should be cautious when considering to establish
additional institutions. The Commission suggests in the Green Paper the establishment of a
European Energy Supply Observatory as a possible solution. To avoid a possible duplicity of
the IEA’s work, we would appreciate a more detailed presentation by the Commission of its
plans, since for instance the IEA statistics is, in our opinion, detailed enough and is fully
available to Member States.
Ad 3) Sustainable, efficient and diverse energy mix
8. What should the EU do to ensure that Europe, taken as a whole, promotes the diversification
of energy supplies?
In our opinion, mapping the status of European primary energy sources and determining
strategy for their optimum use are among the main prerequisites for developing European
energy policy. In this context, it should be stressed that the use of own resources must be
performed in compliance with the requirements for sustainable development while being
aware of strategic and security significance of these raw materials.
Open and factual dialogue at all EU levels on the advantages and disadvantages of the use of
diversified energy sources should be conducted, considering economic, strategic,
environmental, technical and security issues, from the viewpoint of long-term sustainable
development. The Strategic EU Energy Review should deal equally with all energy sources
and their most efficient use.
The Czech Republic supports further use of nuclear energy within the EU, bearing in mind
that questions such as waste and safety must be properly solved. Nuclear energy meets to a
considerable extent the energy needs of several Member States and makes a significant
contribution to the reduction of CO2 (carbon) emissions and to the compliance with the Kyoto
emission limits. It is necessary to continue to undertake research into nuclear technologies
which may be also the basis for future hydrogen-based economy in the long-term prospect.
It is equally necessary to deal with the use of coal – strategic raw material whose stocks
within the group of fossile sources are the largest worldwide. In the EU, the prospect of coal
is strengthened by the accession to the EU of new Member States with significant coal stocks,
which enable to maintain a significant portion of this source in the European energy mix in
the long-term. Another advantage is also its location in geopolitically stable regions, transport
and its competitiveness due to a relatively stable price. Therefore, we support sustainable use
of coal by way of increasing efficiency, reducing emissions and aspiring for emission-free
power stations (clean coal technology) with carbon capture and storage.

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The Czech Republic also supports making full use of possibilities offered by combined heat
and power generation (CHP). We support reasonable CHP systems and long-distance heat
supplies from central sources aimed at efficient use of primary energy sources and reduction
of emissions.
To sum up, it would be advisable to focus in particular on:
• consistent support for science and research in the energy sector;
• extending the use of renewable energy sources (RES), while searching for new
possibilities;
• searching for more efficient, more secure and cleaner technologies in the area of coal
and nuclear energy;
• higher efficiency and support for saving processes within the entire energy chain;
• intense dialogue with countries that have sufficient natural supply of energy sources
and with countries in the territory of which transmission routes are located or planned.
Ad 4) An integrated approach to tackling climate change
9. How can a common European energy strategy best address climate change, balancing the
objectives of environmental protection, competitiveness and security of supply?
Climate change is global in nature and therefore must be addressed globally. An integrated
approach to tackling climate change is desirable, but it must be implemented in such a manner
that would not reduce competitiveness of the European industry.
The Czech Republic opinions that the main potential lies in the following two areas that are
already known at both Community and national levels, which need to be promoted more
intensely:
− energy efficiency,
− higher use of renewable energy sources, while taking account of specific local conditions
in various Member States.
As far as energy efficiency is concerned, further efforts need to be focused on the use of
relatively large potential of energy savings in buildings, industry and - in particular -
transport. This requires the application of best practices and technologies and the availability
of financing through guaranteed funds. In this context, the Czech Republic looks forward to
early presentation of the EU Action Plan on Energy Efficiency.
The Czech Republic supports the continuation of the previous practice of labelling appliances
with energy labels and proposes to update or amend the Directive on Labelling that should
include more products in the light of the most recent development.
The Czech Republic agrees that it is necessary to strengthen information and publicity
campaigns aimed at individual segments of the energy services market and the energy
products market with the aim to inform consumers in a more detailed manner about new
energy efficient and environmentally friendly products and about methods and possibilities of
their financing.
10. What is important for further development of clean and renewable energy sources in the
EU?

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The Czech Republic supports EU efforts aimed at higher use of renewable energy sources
while continuing the promotion of research in the area of renewable energy sources. The
Czech Republic agrees to the current support for economical and sustainable use of biomass
in the production of power, heat, and in transport.
The Czech Republic expects the Renewable Energy Road Map to be brought forward by the
Commission.
Ad 5) Encouraging innovation: a strategic European energy technology plan
11. What action should be taken at both Community and national level to ensure that Europe
remains a world leader in energy technologies?
12. What issues/technologies EU strategy should be focused on in energy technologies?
Reliable future energy supplies must be supported by research and introduction of new
technologies. The Czech Republic agrees that the European Union needs a strategic European
energy technology plan supported by the appropriate funding and based also on the IEA work
for G8. Energy sector should become key topic of the 7th Framework Programme on
Research and Development (FP7). It is necessary to identify at Community level a limited
number of research and development priorities the common efforts would be targeted at. The
effectiveness of all science and development programmes needs to be enhanced.
The EU should continue to promote the development of renewable energy sources and energy
savings.
The EU should continue to promote funding of the development of cleaner technologies in the
coal sector, the building of new energy sources with higher efficiency and lower
environmental burden. In the area of coal technologies, the Czech Republic could play an
important role due to the significance of this raw material for the national energy sector. For
instance, one of the pilot projects aimed at the use of clean coal technologies might be
implemented in the Czech Republic.
The EU efforts must further focus on speeding up the development of the fourth-generation
nuclear reactor and ITER and their industrial applications. In this context, it is necessary to
work on safe storage/disposal and transport of spent fuel and technology of its reprocessing
and repeated use.
Last, but not least, a strategic European energy technology plan should focus on the transport
sector as one of key priorities. The Czech Republic believes that from the viewpoint of future
of (not only) passenger transport the EU might implement a common European project in the
area of new technologies for the propulsion of passenger cars.
In the area of research and technology development it is also necessary to focus on
cooperation with non-EU Member States.
It is necessary to continue to promote the participation of the EU and its Member States in
international scientific cooperation organized under other international agreements (for
instance within the European Research Area, the International Energy Agency, the
International Institute for Applied Systems Analysis, etc.).
Ad 6) Common external energy policy

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13. What should be the priority of common external policy in the energy sector
The Czech Republic agrees that coherent external policy is essential to deliver sustainable,
competitive and secure energy. The Czech Republic supports developing new partnerships
with the main producer, transit and consumer countries and the requirements for common
external energy policy. The external energy policy should be :
1. consistent with other EU policies, policies of Member States and industry
2. strategic, i.e. it should fully reflect the geopolitical dimension of energy security
3. geared towards such areas where activities at national level and at Community level might
make an obvious contribution to ensuring common interests.
The Czech Republic considers the document elaborated by Javier Solana and the European
Commission as a reasonable basis for further debate and undertaking practical steps that
might lead to ensuring collective external energy security of the EU. Furthermore, the Czech
Republic believes that energy policy and energy security issues must be an integral part of
both bilateral and interregional dialogue conducted by the European Union with third
countries and regional integration groupings.
From the viewpoint of the Czech Republic, Russia is essential as Europe’s strategic partner.
However, the Czech Republic believes that it is necessary to consider and discuss properly all
various options of ways further. The EU should first determine clearly what are its objectives
in the energy sector (but in other areas, too), rather than starting negotiations without common
(Community) vision. Negotiations must be conducted in the context of the new EU-Russia
Partnership and Cooperation agreement. The Czech Republic also fully supports the European
Commission in its appeal to all signatories to secure ratification of the Energy Charter Treaty.
14. How can the Community and Member States promote diversity of supply, especially for
(natural) gas?
In addition to Norway, the Green Paper identifies North Africa and the Caspian region as key
alternative suppliers of oil and gas. Algeria and Libya currently already operate as regular
suppliers of gas for EU Member States. However, further strengthening of their position needs
to be assessed. As for the supplies from the Caspian Sea region, South Caucasian countries
and countries of the Black Sea region - in particular Turkey and the Ukraine (similarly as the
whole SEE region) - are gaining importance as transit countries.