2021 - The Year for EMH, page-635

This is important stuff especially for Poland where majority of power is generated from coal (both lignite and black coal). Germans are enforcing their policy of shutting down everything except solar and wind, residents of Germany are now paying quite high electricity bills.

Now it also affects EMH and CEZ indirectly. There is a system called "EUETS". You can even trade futures for this stuff, current price in May 2021 is over 50 EUR / tonne of CO2. It was around 20-25 EUR/tonne CO2 in 2020.

If you are an old-school coal power plant, you can sell power for around 55 EUR/MWh, out of that your costs will be 30-45 EUR for paying the EUETS credit (this was in 2020 so it will be more like 50-60 EUR now), depending on how clean your production is. The remaining 10-25 EUR/MWh (now probably more like minus 5 to plus 5 EUR) must cover all your "remaining" costs - the fuel cost, renovation, operations, salaries and taxes.

As Cinovec is a joint venture between EMH and CEZ it is nice that CEZ's generation is about 40% nuclear, 40% coal and 20% renewables. They plan to reduce coal, add some renewables (mostly solar) and switch from coal to natural gas where necessary. They also managed to hedge and buy some of these carbon credits in advance for 20-25 EUR.

In this aspect, CEZ seems to be in much better position than Polish utilities (which are coal dependent) as well as German utilities (which must invest heavily into renewables and produce very expensive power). So CEZ will be generating good cash flow in the following years and even with terrible management, it will be a stable company - not thanks to the management but thanks to the Germans.