From the perspective of the energy market, many companies face several challenges today, as well as threats. A fundamental transformation is underway across sectors, aiming to improve the sustainability of business from an environmental, social and business perspective. Over the next 3 to 5 years, a gradual introduction of non-financial reporting (ESG) obligations and the implementation of the transition to a sustainable society is expected. This will require, among other things, the need to minimise the carbon footprint of companies. The key in this respect will be to make the most of purchasing or generating your own electricity from renewable sources.

A major impact is the current energy crisis, which has increased the price of purchased electricity in an unprecedented way, as well as the risk of further unexpected price changes in the near future (market volatility). This has a significant impact on the operating costs of companies and in many cases threatens the very functioning of some operations.

On 14 September 2022, the Government of the Czech Republic discussed the conditions for assistance to large electricity and gas consumers based on the current situation on the energy market. The current information foresees assistance primarily aimed at companies in the processing and the mining industry, as well as companies in the agriculture, forestry and fishing. Companies in energy-intensive industries will be able to receive compensation of up to a maximum of CZK 200 million, other enterprises up to a maximum of CZK 45 million. The compensation programme is due to start on 1 November 2022.

Companies will be able to apply for compensation, if they can further demonstrate that:

• they are in an operating loss, at least half of which is due to high energy prices;
• their energy costs increase by at least 2 times in the period from 1 February to 31 December 2022 compared to the average prices for 2021.
• The conditions will be further specified in the coming weeks, so we recommend monitoring the website of the Ministry of Industry.

One solution to the energy crisis is to maximise the use of existing corporate assets, particularly buildings and land, to ensure emission-free or low-emission energy production in the long term. In addition, energy management measures that will make the use of energy more efficient and reduce consumption, resulting in cost savings. Most of these measures can currently be supported by various subsidies, which may significantly reduce their investment intensity. 

Grant Thornton Advisory can offer advice in these areas and guide your business towards greater savings and better energy management. We start with a thorough analysis of the current situation and the potential for savings or investment measures with subsidy support. We investigate technical parameters and feasibility (e.g. the potential of buildings for PV installation). We can prepare grant applications including all necessary attachments and guide you through all the steps to a successful submission. In addition, we can help with the administration of the government compensation itself.

We consider the ability to adapt to a new situation important. We can help with that, too. We offer an analysis of the expected electricity consumption in the long term, a proposal for a strategy to secure the purchase of the remaining electricity and the overall preparation of the energy management concept, including the quantification of the economic return, the overall action plan and the need for investment resources.

There are a few key points to focus on when updating energy management. From the point of view of quick solutions that do not require significant interventions in the company’s operations, these include a review of current contractual relations with energy suppliers, a review of the business strategy and the use of compensation or less demanding cost-saving solutions. In terms of more demanding measures, it is possible to consider the introduction of commercial dispatching, prediction and management of consumption, automated regulation, more costly (but subsidy-supported) energy-saving measures such as the installation of own RES, passporting, community energy or electromobility. 

The currently announced grant calls include:

• Modernisation Fund – RES + 
  
  • installation of PV plants up to 1 MWp and above 1 MWp
  • land and buildings
  • subsidies of up to 50% of total expenditure
  • existing or future holders of electricity production licences
• Modernisation Fund – HEAT
  
  • modernisation of thermal power plants
  • subsidies of 45 to 80 % of total expenditure
  • owners of a thermal energy source
• Modernisation Fund – ENERG ETS
  
  • increase in energy efficiency of installations or plants covered by the ETS
  • modernisation of energy production and distribution facilities, modernisation of production or processing facilities
  • subsidies of 30 to 80 % of total expenditure
  • entities owning EU ETS equipment
• OP TAK – Energy savings
  
  • reduction of energy consumption of buildings, use of RES, modernisation of distribution systems, use of waste energy, installation of accumulation
  • subsidies of 35 to 65 %
  • small, medium and large enterprises
• OP TAK – RES – Wind power plants
  
  • construction of wind power plants
  • 50 to 80 % subsidy
  • small, medium and large enterprises, self-employed persons.

If you are interested, do not hesitate to contact us, we will be happy to assist you.

Author: Michael Sikora, Jiří Dvořák