Czechia can unlock significant economic opportunities as it takes major strides towards its energy and climate goals, but strong planning and policy implementation are critical to its success, according to a new report by the International Energy Agency (IEA).
Czechia 2025, out today, features a comprehensive review of the country's energy policies across different sectors. The report delivers a suite of recommendations as Czechia looks to bolster energy security and affordability while reducing emissions, including by rapidly phasing out coal-fired electricity plants.
Though coal plants currently supply more than one-third of Czechia's electricity and half of its district heating, they are slated for retirement by 2033 - and economic factors, including high carbon costs, may close them earlier. Given this, the IEA report emphasises that the country must accelerate the deployment of alternative sources of energy while also addressing local impacts in coal-dependent regions, managing workforce transitions and working to ensure public acceptance.
At the same time, the transition can serve as a springboard to expand clean energy industries, which would support the country's economy. Czechia already has a high-concentration of heat pump manufacturers, and over 150 000 EVs were produced domestically in 2024.
The successful transformation of Czechia's energy system hinges on clear policy signals. According to the report, while Czechia has set ambitious energy and climate objectives, it should adopt a new long-term energy strategy that harmonises its objectives and plans, which would provide clearer direction for stakeholders and boost investor confidence.
Czechia has already taken significant steps in recent years to shore up its energy security. The country has diversified oil and gas supplies and reduced its dependence on Russian imports, including nuclear fuel supplies. It is developing new mechanisms to attract investment in dispatchable power generation. And it continues to support the expansion of a range of energy sources. However, as electrification expands - and with the prospect that Czechia will import more electricity than it produces by 2030 - measures to ensure electricity security will be increasingly essential.
The report notes Czechia's strong efforts on nuclear power, in particular. It finds that if Czechia continues to extend the life of existing nuclear plants, construct new large reactors and advance plans for small modular reactors (SMRs), nuclear could serve as the backbone of a low-carbon electricity system through mid-century while also creating new employment opportunities.
At the same time, Czechia is expanding its renewable power capacity. Rooftop solar deployment has accelerated, though wind and utility-scale solar are growing more slowly than planned due to permitting delays and local opposition. The report recommends that the government set binding renewables targets, improve auction schedules and reform regulatory frameworks to allow for more corporate power purchase agreements and improve grid access for renewable projects.
Affordability for consumers remains a key energy policy concern in Czechia. According to the report, empowering consumers to deliver flexible demand - underpinned by smart meter deployment - can lower electricity prices, as can electricity tariff reform. More affordable prices would further enable the electrification of transport, heating and industrial processes, driving energy savings and reductions in emissions.
Czechia can achieve additional energy savings by better targeting of existing support mechanisms, including a best-in-class home improvement programme, New Green Savings (NZÚ). Further use of district heating could also enable the efficient use of low-emissions energy sources and waste while supporting electricity grid stability.
The IEA regularly conducts reviews of the energy- and climate-related policies of its Member countries and provides recommendations - a process that supports energy policy development and encourages the exchange of international best practices and experiences.
