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Can ČEZ afford Temelín 3&4?
In Temelinomics, we explore the economics of building two new reactors at NPP Temelín. In the first part, we re-examine the stated costs of the project and consider what costs might have been overlooked. Then we review CEZ’s financial condition to identify reasons why the company cannot afford to build Temelin 3&4. Finally, we do a simple valuation of the project and, using a Monte Carlo simulation, we show that the project will fail to break even.
This research was not commissioned
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The relevance of market coupling to ČEZ's relevant market
In this study, we show that market coupling of two national electricity markets does not guarantee the existence of one relevant market. To determine the relevant market, it is equally important to compare both electricity prices and the costs of electricity generation between the different countries. In order to prove this hypothesis, we expand upon our earlier study, Power Abuse, by comparing the merit order curves of the Czech Republic and its neighbours.
This research was not commissioned
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The fossilisation of Czech district heating policy
In Dinosaurs, we challenge the assertion of the Czech district heating industry that coal-generated heat is cheap. Our analysis shows that coal-generated heat only appears to be cheap due to a distorted domestic coal market and the fact that its price fails to reflect all externalities. We demonstrate that in an undistorted coal market in which all externalities are priced in, gas-fired heat is a close substitute for coal-fired heat. And that it would not weaken the country's energy security.
To be published Q1 2012
This research was not commissioned
ČEZ and the abuse of dominant market power
Our analysis of electricity price evolution and interconnector capacity usage demonstrates that ČEZ’s relevant market is Czech, not European. We apply standardised methods of measuring market concentration to show that the Czech electricity market is one of the most concentrated in Europe. And we show that ČEZ is able if it wishes to abuse its dominant market position by pricing the inputs of its production at Czech levels and its electricity at European levels.
This research was not commissioned
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Why Romania should drop plans to create two CEZs
In this latest report from Candole Research, we consider Romania's plan to reorganize its state-owned energy sector into two vertically integrated firms. We examine the impact of this on the upstream and downstream electricity markets, arguing that competitiveness will be harmed and the functioning of the wholesale market undermined. We argue that market concentration will discourage foreign investment in Romania’s obsolete gas and coal fired generation fleet.
Our analysis is based upon models of western European markets and primary source data.
This research was not commissioned
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Why Bulgaria should abandon NPP Belene
A project with a value equal to one quarter of Bulgaria’s GDP, the proposed Belene nuclear power plant pays scant regard to the most basic economic reasoning. In this short paper, Candole analyst Ivan Kotev seeks to dispel five myths about NPP Belene: that it will produce cheap electricity; that it will satisfy Bulgaria’s growing energy needs; that it will boost electricity exports; that it will guarantee Bulgaria’s energy security; and perhaps the weakest of them all, that Bulgaria has already spent 600mn euros on the project and cannot abandon it now.
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Retail in central and southeast Europe
This report forecasts retail sales for 2010 in central and southeast Europe. We forecast other variables impacting retail as well, such as unemployment and real GDP. It is aimed at senior management of retail companies and investors.
We examine the market as a whole, and not individual companies. We have excluded information with little explanatory power for predicting retail sales. Our data was obtained from public and primary sources. Our conclusions and forecasts are based on mosaic theory and advanced non-linear econometric modeling.
In combination with POS data analysis, this report is all you need to understand how retail sales are affected by broader economic developments.
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Good, bad and ugly sides to the Czech energy giant
Claims that ČEZ abuses its market power are not new. The author examines the theoretical underpinnings and empirical evidence for market abuse in the Czech energy sector, demonstrating that the potential for abuse is real. The report sets ČEZ in its regional and domestic market context, identifying five structural variables that determine ČEZ's profitability. It argues that successful renewal of the Czech generation fleet is critical for maintaining such profitability, whereas foreign acquisitions are not. It concludes that future value depends on efficient execution of capital spending programs and that the risk of government failure to challenge value dilutive decisions of a management it appoints remains high.
This 30 page study is based upon models of western European electricity markets and our own analysis of primary source data.
This research was not commissioned
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