28/9/2023 |Articles are machine translated
Kamil Čermák, předseda představenstva a generální ředitel ČEZ ESCO
“Automotive companies, steelmakers and other large businesses are now leading the peloton of companies asking for rapid decarbonisation solutions. This shows that everyone is taking the Green Deal seriously,” says Kamil Čermák, Chairman of the Board and CEO of ČEZ ESCO. The decarbonisation solutions also include a project to use batteries from electric vehicles as energy storage. “Batteries from electric cars may not be a big contribution to the overall storage, but they represent a big technological leap for the automotive sector,” thinks the head of ČEZ ESCO.
In June this year, you announced the start of cooperation with Skoda Auto on the reuse of batteries from electric vehicles. What is it about specifically?
Škoda Auto is a great strategic partner for ČEZ in “greening”. Not only do we supply electricity and natural gas to its plants in Mladá Boleslav and Kvasiny, but we also install rooftop solar installations on the roofs of its plants – the one in Mladá Boleslav is the largest such installation in Czechoslovakia, and we are now also negotiating for plants in Kvasiny and Vrchlabí. Even the electricity for Škoda Auto, which does not come from photovoltaics, is ecological, by the way. It comes from other renewable sources in the Czech Republic.
As far as batteries for electric vehicles are concerned, we have agreed to give a second life to those batteries that are either already used or do not meet the strictest standards and cannot be installed in vehicles for some reason. In cooperation with another partner, IBG, we will connect these batteries into larger units and use them as energy storage for various solutions.
Who and what will these storage facilities be used for?
In companies, it can be used, for example, to cover situations when the voltage in the grid fluctuates. Companies can also reduce their reserved power consumption thanks to the batteries and thus save tens of thousands of crowns every month. It can also cover overflows and underflows of renewable energy. As renewables increase, the need for such storage will grow. There is already more demand for batteries, and I don’t just mean our batteries, than the market offers.
There are probably not many “retired” batteries available yet. How many of those that are produced but not used in electric cars are available from Škoda Auto? And how many are needed for one meaningful storage facility?
In this case, it is part of Škoda Auto’s know-how. Moreover, this is still a pilot project, and we are now in the verification phase. I can only say that the quality requirements are high at Škoda Auto, so every day some batteries are discarded.
In terms of need and capacity, you can imagine that, for example, five batteries from Enyaq would create a battery system that would be able to cover the daily energy needs of up to 40 households.
What is the battery cycle in Second Life? How many times can it be recharged?
While the life of a battery is given by the number of usable charge and discharge cycles, it’s really very individual. Everyone just uses the battery a little differently, in a different mode of operation. If we try to translate lifetime into time, on average it should be at least ten years for today’s battery systems built from used batteries.
A pilot project with the reuse of batteries from electric vehicles has shown us one interesting thing: their capacity in stationary storage is only decreasing by about two per cent per year. For the overall lifetime of the batteries, this means an extension of up to fifteen years, which significantly reduces their carbon footprint.
How significant a part of the batteries for electric vehicles do you think will be used in this way in the future? Is this how you think all batteries should be recycled in the future?
Hypothetically, it could be done for all of them. So far we have not come across any reason why all of them could not be a great battery solution. However, some of these batteries will certainly be recycled so that they can be reused in the car industry.
Do you intend to involve other car companies in the project?
As far as other car companies are concerned, they could of course theoretically be involved, but precisely because this is a pilot project, we are launching it exclusively with Skoda.
How far along are you with the project and who are the people interested in your battery solutions today?
We have presented the principle and are about to launch the first solution. We have a couple of dozen industrial customers that we will offer the solution to, but it could also be cities that we decarbonise – we install renewables there, offer green energy, cogeneration and add a battery that provides a power balance service. In total, this year we want to deliver up to 30 systems built from electric vehicle batteries to customers at home and abroad.
We are also currently starting to set up our own innovative energy centres at two locations, which will include just such a storage facility made of EV batteries, and where we want to test various new solutions from the modern energy sector. The first is in Rožnov pod Radhoštěm, on the premises of our subsidiary EP Rožnov.
The second place is Ivančice u Brna, where we are completing the Smart Energocentrum consisting of an innovative combination of modern energy products and charging infrastructure for electromobility, including battery storage facilities.
In both cases, these are complex projects that fit into the future vision of community energy, which is much talked about now and which is already regulated by the government-approved amendment to the energy law Lex RES II. Community energy will place new demands on the transmission and distribution system. We at CEZ know that in order to function well, it needs strong central management of the system. These two pilot projects, in Rožnov and Ivančice, give us the opportunity to test everything and get a head start in this area.
Coming back to EV batteries, do you know how far the market for end-of-life batteries is in other countries? Are you working with anyone abroad?
Yes, we have sister companies to Elevion in Germany and in the Netherlands, where the EV market is much more developed. Together with Elevion, we are also preparing an offer for clients in these two countries. The Dutch customers have already received their first batteries. There are several similar solutions in Europe, but ours is unique in its concept.
Kamil Čermák, head of ČEZ ESCO. | Photo: ČEZ ESCO
How significant a contribution can battery storage make to future energy storage needs?
If you are thinking only of batteries from electric vehicles, these will probably be a small contribution to total storage in the near term, but they represent a major technological leap for the automotive sector.
But if you mean batteries in general, without them we would not be able to effectively manage an energy system with an increasing number of renewables in the future. CEZ alone wants to install six thousand megawatts of renewables by 2030, the equivalent of three Temelíns. To this we want to add 300 MW of storage. Storage will help to cover energy shortages or overflows.
Today, storage – compared to the development of renewables – is still in its infancy. It needs a “kick start” like renewables did a few years ago.
ČEZ ESCO is building a giant battery in Ostrava-Vítkovice. Why there and what will it be used for?
This is one of the largest batteries in the Czech Republic, it has nothing to do with batteries from electric cars. Its output will be ten megawatts and it will cost more than CZK 100 million to build. This battery storage facility will contribute to stabilising the energy grid by providing power balance services.It will be fully operational at the end of this year.And why there?The battery is being built on the premises of the Vítkovice Energy Centre because they are very receptive to these new needs and the battery will operate in a block with local conventional gas resources. Moreover, it is a location close to us, ČEZ already has other activities there and it is a very prestigious matter for us.
You said that the people interested in your solutions are mainly industrial companies. Given the current situation and future needs in the energy sector, do you think their interest is sufficient?
Yes, and not only for battery solutions. Whereas previously the main customers were public administration entities, today companies such as Liberty Ostrava, US Steel Košice, Třinecké železárny and others like them are at the head of the peloton that wants fast decarbonisation solutions from us. This shows that the Green Deal, which is about saving energy, reducing the carbon footprint and increasing the share of renewables, is being taken seriously by everyone. Companies are not only driven to do this by political mandates, bank taxonomy requirements or the desire to save money, but also by their customers, who are increasingly pushing their suppliers to be “green”. The message we are getting from customers who have started to decarbonise is clear: we see the huge competitive advantage that sustainability brings.
We are even now forming a new alliance of companies that want to work together to transition to a zero-emission economy quickly and efficiently, strengthening the competitiveness of Czech industry. In addition to energy companies, the initiative includes banks and steelmakers.
When a company is interested in working with you on comprehensive decarbonisation, do you start by doing some auditing in the company? Where do you find the most scope for introducing new solutions?
Before we start developing a decarbonisation strategy for our clients, we always first assess their current state – what technologies they use, what resources are in operation and what carbon footprint they produce, what measures have already been implemented, etc. Only when we understand our client’s current situation in detail will we tailor a decarbonisation strategy to align with their business strategy and help them achieve their business goals. Then there is a chance that decarbonisation will be further developed and implemented in the company and will not be stuck in a drawer like dozens of other unsystematic studies.
We clearly see the greatest potential in buildings and halls. Some of them, for example, were insulated in the 1990s, but in such a way that they have to be uninsulated and insulated again. We are starting from the recognition that the real estate sector in the EU produces more than a third of total greenhouse gas emissions and that this whole segment is facing a further significant tightening of legislative requirements.
Then, of course, there is room wherever there are vacant areas on which to install some renewable sources, particularly solar power plants. These are the two most important things. The other has to do with the type of business. In the case of steelmakers, for example, it may be the replacement of coal-fired furnaces with electric arc furnaces or gas-fired furnaces.
The advantage of ČEZ ESCO is that it brings together over 20 companies, each of which has different competencies. And together they can deliver a comprehensive product, i.e. design and implement a comprehensive decarbonisation. For large companies, this is a process for years to come, and we can be a reliable guide for them along the way.
When you mentioned renewables on open areas, you were probably thinking mainly of the roofs of buildings.
That is a very common request, but it is not always possible to build it on the roof. Sometimes the roof just can’t take it, sometimes there’s a problem with the fire brigade. These are all relatively new things and sometimes there are no clear rules.
Do you encounter problems with legislation elsewhere?
The biggest problem is definitely the complexity and length of the permitting process in general when it comes to building renewables. We would very much like to see this made more flexible. At the same time, the processing of subsidies should be speeded up.
ČEZ is significantly involved in building charging infrastructure for electric vehicles. How do you divide these activities between “big CEZ” and ESCO? What are your plans in this area?
The division is such that “big CEZ” is in charge of ordinary public infrastructure and ESCO focuses on tailor-made projects. As an example, we have equipped more than fifty dealerships with charging wallboxes that can be used by their customers and partners.
CEZ is the market leader in terms of charging performance. In total, it has already built about 600 charging stands in the Czech Republic with a total capacity of 40 MW, which is one third more than the nearest competitor. Drivers of electric vehicles thus charge on average the fastest in the Czech Republic. As part of its Clean Energy of Tomorrow vision, CEZ has set itself the goal of reaching 800 charging stands by 2025, while multiplying their capacity. Demand for shorter charging times is high, so we are building charging hubs and installing ultra-fast racks with capacities of 100 kW or more, especially in busy locations, near major roads and in cities. We are also expanding the number of external partners where customers can charge their electric cars, with the recent addition of the Tesco supermarket chain. With the ČEZ charging card, drivers can top up at a total of three thousand charging points, and we intend to make thousands more available in the coming months in neighbouring countries.
Mgr. Kamil Čermák
graduated from the University of Economics and Erasmus University Rotterdam. He worked as a reporter and presenter at Czech Television and then as a spokesman and advisor to the Minister of Industry and Trade. Since 1995, he has held several senior management positions at Czech Telecom, Czech Airlines, BM Management (private equity), CEZ Polska and from 2012 to 2016 he managed the media house Economia. Since 2016, he has been the Chairman of the Board of Directors and CEO of ČEZ ESCO. Kamil Čermák is a member of the Board of Directors of the Alliance for an Emission-Free Future and Chairman of the Board of Directors of the Modern Energy Association. He is also a member of Post Bellum’s Memory of the Nation Collegium and a founding member of the PR Club with Card 002.
ČEZ ESCO a.s.
is a company focusing on energy saving solutions, supplying emission-free and green electricity through certificates of origin. It provides comprehensive solutions for energy needs – from the installation of decentralised green power sources including battery storage to turnkey corporate electromobility to energy saving projects and complex building technical security supplies. It has approximately 2,000 employees. ČEZ ESCO subsidiaries include AirPlus, AZ KLIMA, CAPEXUS, ESCO Distribution Systems, ČEZ Energetické služby, ČEZ ENERGO, Domat Control System, E-Dome, EP Rožnov, ENESA, HORMEN and KART.
