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Future Vision: Energy Market of Czech Republic 2050

Development of a technology-based market study using a detailed model of the energy industry and neighbouring sectors.

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  • Project Experiences

Task

In a time of disruptive changes within the global energy landscape, our client, a leading energy supplier from the Czech Republic, commissioned us to provide valid forecasts on the development of the Czech energy market until 2050.

Will e-mobility achieve a breakthrough and, if so, when? Will Compressed Natural Gas (CNG) be the new major force in mobility (and for how long)? How will the heating sector develop - considering both district heating and individual heat supply? How will the electricity generation mix be composed in the future, and what will happen to photovoltaics, which has been off to a rather disappointing start in the country so far? We have dedicated ourselves to answering all these questions within the analysis framework, but also pointed out that some questions can't be answered with a forecasting methodology, i.e. some answers only time will reveal.

Strategy

A forecast for time so far in the future is always subject to uncertainties. In order to deal with these uncertainties in the best possible way, we first analysed the most relevant input factors that would most significantly influence the most relevant output for the client.

On this basis, we then developed various scenarios and built up a corresponding model landscape. This includes a variety of the different topics - ranging from a PLEXOS model for the electricity wholesale market to specific tailor-made models for the future of mobility, "SMART everything"-transformation, PV development, battery applications and other relevant factors.

In the last step, we examined the interrelationships of these models on the basis of technology and fuel-price sensitivity, detailed data on the Czech housing stock (broken down by region and type of existing heating), and real data on power generation as well as combined heat & power plants for the whole country.

Implementation

In the analysis, we focused on the impact in the following areas:

  • Large cities
  • Isolated villages without connection to the gas network
  • Places with currently decoupled CHP district heating networks
  • The vehicle fleet of the Czech Republic

For these areas, we have derived implications for "no regret" options, safe bets, uncertainties, relevant factors and trigger points to be considered with caution, and identified scenarios that would pose the greatest economic threat to our client.

In pre-mortem sessions, we then identified "blind spots" and developed scenarios and sensitivities to create a comprehensive manuscript for the client's strategy department to use and update in the future.

Results

As part of our analysis, we were also able to identify various potentials for further business development. On the basis of more sound data sets, we were also able to optimize investment decisions and show ways towards a more sustainable - yet not more expensive - energy system.

At the same time, innogy Consulting succeeded in integrating the aspects of converging industries of the future energy system for the first time, for example by demonstrating the effects of e-mobility on the retail and wholesale market and vice versa. In doing so, we have developed the ability to fully understand such systems on a large scale. This enables us to transfer know-how to other regions - such as our integrated energy strategy project for the city of Dubai.

 

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