Czech Republic’s Final Cogeneration Auction Sparks Demand Amidst Turbine Supply Constraints
The Czech Republic is nearing the close of its final public auction to support highly efficient combined heat and power (CHP) sources utilizing natural gas, biomass, biogas, and mine gas. Up to 910 megawatts (MW) of capacity can be supported in this round, a slight increase of 5 MW from the previous auction.
Previous Auction Results
The preceding auction, held last year, attracted 57 project applications, with 48 ultimately receiving support. Successful applicants included Veolia, innogy Energo, and E.ON Energy Solutions. Seznam Zprávy reports that all projects approved in the previous auction were fueled by natural gas, or a combination of natural gas and biomass.
Demand Driven by Decarbonization and Grid Stability
Cogeneration units are gaining prominence due to their ability to quickly generate both electricity and heat from gas, providing valuable grid balancing services. Their continuous operation capability also makes them attractive for various applications. Examples include the National Theater in Prague, the T-Mobile Arena in Brno, and municipalities like Slavičín, Vimperk, and Žďár nad Sázavou, often integrated with other energy sources such as photovoltaic plants and heat pumps.
Last Chance for Operational Support
Manufacturers of cogeneration units anticipate strong interest in this final auction, as it represents the last opportunity to secure operational support for this type of production. The ongoing decarbonization of the Czech heating industry continues to drive demand. Suppliers are under pressure to deliver projects by 2030 to meet subsidy conditions.
Turbine Supply Challenges
The market is facing constraints in turbine supply, particularly for gas and steam-gas power plants. Demand for these turbines increased by roughly one-third last year, with manufacturers like GE Vernova, Siemens Energy, and Mitsubishi Power reporting extended lead times, some stretching to the end of the decade. Seznam Zprávy notes that this scarcity may lead to projects opting for combinations of smaller units, benefiting Czech companies.
Biogas Sector Limited Participation
Despite the auction being fuel-neutral, interest from the biogas sector remains low. This is attributed to the support scheme’s linkage to natural gas prices, creating excessive risk for biogas operators. However, projects utilizing natural gas must demonstrate the technical and economic feasibility of transitioning to renewable and low-carbon gases by 2050, aligning with European Union public support rules.
Delivery Timelines and Future Outlook
Current delivery times for cogeneration units are estimated at eight to twelve months, with other necessary technology readily available. Fresh biogas facilities can be operational within two years. The role of gas in the heating industry is expected to grow, even as a transitional emission source, with a future shift towards renewable gas alternatives.
Regulatory Scrutiny
In June 2025, the Czech Republic’s competition authority, the UOHS, launched a formal investigation into potential collusion related to bidding in the auction for gas or biomass power and heat plants. Reuters reported on the probe, which aims to determine if three companies coordinated their bids as part of the country’s decarbonization efforts.