Czech EPH sees stable 2020 with regulated returns
Czech energy and infrastructure company EPH reported May 10 stable profit for 2020, thanks to its guaranteed income streams accounting for 88% of its business.
It focuses on assets with a high level of predictability, the operations being backed by regulations, long-term contracts – including with Russian exporter Gazprom – underpinning almost 90bn m³/yr capacity – and state backed schemes such as capacity market payments, green bonuses, 'must-run' regimes and so on.
Sales were almost unchanged year on year at €8.53bn ($10.4bn), compared with €8.57bn in 2019, despite the COVID-19 pandemic that affected most energy companies in 2020. Adjusted EBITDA was 2.2bn, up from €2.1bn in 2019. It also paid down €900mn of debt, leaving it at €4.3bn.
The share of coal generation dropped in 2020 to 19% of which about a third are combined heat and power plants (CHP) which are operated in "highly efficient cogeneration mode." The share will further decline as large portion of coal-based assets will be either decommissioned or shifted to capacity reserve or converted to zero or low carbon footprint technology. By 2023, about 80% of its remaining hard coal installed capacity will be closed, and all hard coal fired power plants will be closed by 2025. Plans exist to convert its lignite plants but these are mostly very efficient combined heat and power.
Its conventional coal assets are mainly run to meet the stability needs of electricity grids – such as its coal power plant Kilroot in the UK, which will be decommissioned in 2023 – or are a vitally needed, irreplaceable source of power such as Fiume Santo in Sardinia, Italy. Proposed and executed initiatives will lead to 42mn metric tons/yr of CO2 emissions from 2035 onwards.