Dependence and ways to overcome.
CZ-AT Bilateral Winter and Summer School 2006

Michaela Valentova
 Johannes Sbaschnigg

TABLE OF CONTENT

1	INTRODUCTION
2	COUNTRY ANALYSIS
2.1	Austria
2.1.1	Energy Production
2.1.2	Energy Consumption
2.1.3	Energy Dependency
2.2	Czech Republic
2.2.1	Energy Production
2.2.2	Energy Consumption
2.2.3	Energy Dependency
3	ENERGY POLICY
3.1	Austrian Energy Policy
3.1.1	Government measures
3.1.2	State of Implementation
3.2	Czech Energy Policy
3.2.1	Government measures
3.2.2	State of Implementation
4	CONCLUSION
4.1	Comparison of Energy Statistics
4.2	Comparison of Energy Policy
4.3	Epilogue
APPENDIX
1	INTRODUCTION

Energy issues play one of the major roles in the current political debate. The world’s demand for energy is continuously growing and the production does not keep up with this development. The European Union as a whole depends increasingly on imports of energy resources. Nowadays the dependence represents 50%, but could rise up to 70% in less than thirty years. Moreover, the imports of energy resources come mainly from geopolitical unstable regions. Reliable supplies are of crucial importance, as could be seen in the beginning of 2006, when Russia interrupted gas supplies to European countries.

It is obvious that the dependence must be addressed and overcome. Yet, the member states do not wish to give in sovereignty over their own resources or their energy policy in favor of the European Community. Energy policies are therefore more or less developed on the national level, although following to certain extent the framework of the organizations they take part in i.e. the European Union or the International Energy Agency. 

This paper analyses the energy dependency of two particular European states – the Czech Republic and Austria. It will examine and compare the energy situation and the energy policy that these two countries adapted to solve the problem.

In the second chapter, we will study the energy situation and energy dependence of these two countries, analyzing their production capacities, consumption patterns and last, but not least the above-mentioned dependence and its structure.

In the third chapter, we will analyze the measures that have been taken in order to cope with this dependence as well as the state of implementation of these measures. We will pick the main weaknesses and failures.

In the fourth chapter, we will compare similarities and differences in the states’ energy policies and try to explain the reasons.
2	COUNTRY ANALYSIS

2.1	Austria

The Republic of Austria is a federal country comprising nine states. It has a total area of 83 850 km² with a population of 8.2 million. The GDP per capita in the year 2005 was approximately 29.000$, based on purchasing power parity. The GDP is driven primarily by services, 67.5%, and industry, 30.3%, with the remaining contribution coming from agriculture, 2.2%.

Austria is located at the crossroads of Central Europe. It is entirely landlocked and shares 2.562 km of boundaries with eight different countries resulting in substantial energy trading, both in fossil fuels and electricity. 

Austria is a diverse country and its geography varies widely. Almost two-thirds of Austria’s territory is alpine region, mostly concentrated in the west and the south. The mountainous areas see substantial annual rainfall of more than 1.000 mm per year and have a relatively low population density. The eastern and northern sections, by contrast, are mostly flat. These areas include the nation’s largest cities and the majority of its industry. This diversity of terrain means Austria’s substantial hydropower is disproportionately spread, with the majority located in the mountains. Lower population densities there make customer grid access for natural gas or electricity more costly. By contrast, industry and urban clusters concentrate energy use in the east. As a result the Austrian states sometimes have different priorities when pursuing energy policy objectives.

Forests cover approximately 45% of the country, providing a sizeable store of the biomass resources on which the country relies. The River Danube plays an important role in both the Austrian transport industry and as a source for hydroelectricity. Austria has cold winters and warm summers, providing seasonal variations in the energy demand and the power supply from the large share of hydroelectric plants in the country.

2.1.1	Energy Production

In 2003, the total primary energy supply in Austria was 33.18 million tones of oil equivalent. Oil has been the predominant energy source in Austria for a number of years, accounting for 41.3% of the country’s total primary energy supply (TPES) in 2000. While oil’s share of TPES has decreased significantly from 1973 when it was 56.7% of the total, it has shown no essential change since 1997 when it was 41.1%. 

•	Includes geothermal, solar, wind, combustible renewables and waste, and electricity trade.

Figure 2‑1: Austrian Total Primary Energy Supply

In 2003 the Austrian energy production amounted to 9.99 Mtoe and covered around 30.5% of its total primary energy supply. The long-term development of the Austrian energy production and its structure are marked by a strong decrease of fossil fuels and increases on renewable energies. Due to the intensive use of hydropower, renewable energy contributes to around 70% of the domestic energy production.

Figure 2‑2: Austrian Energy Production by Source 

2.1.1.1	Fossil Fuels

Austria has limited fossil fuel resources. In 2003 the country produced 0.99 Mtoe of oil, the same level as in 1997. As part of a long-term trend, however, domestic oil production has fallen from 1973 when 2.7 Mtoe were extracted from Austrian oil fields. Domestic natural gas production in 2003 was 1.78 Mtoe, an increase from 1997 when the production level was 1.2 Mtoe. As part of the long-term trend, natural gas production has fallen from the all-time high in 1978 when the country produced 2.1 Mtoe. The domestic production of both natural gas and oil is expected to decline in the future as the country’s fields become further depleted. Austrian coal mining has experienced early structural change, due to decreasing market shares particularly for brown coal. From 3 million tons in the 1970s the production decreased continuously to 1.0 million tones of coal, around 0.27 Mtoe in 2003.

Figure 2‑3: Austrian Fossil Fuel Production

2.1.1.2	Renewable Energies 

Due to its topographic situation, hydropower (3.6 Mtoe) and biomass (3.2 Mtoe) are used in high percentage for energy production. Since the middle of the nineties both contribute to around 70% of the domestic energy production and around 22.8% to the TPES.

The production from hydropower has nearly doubled since the seventies. The potential capacity for development of around 56.200 GWh is exploited up to 70%. Hydroelectric power has increased its share of TPES from 11.0% in 1997 to 12.6% in 2003. This increase in hydropower’s share of TPES does not represent the addition of hydropower capacity but, rather, increased generation from existing plants as a result of above-average snow and rainfall over that period. 

In addition to the substantial hydropower and biomass usage, Austria has numerous other renewable resource options, most notable small hydro and renewable municipal solid waste and solar thermal that contribute around 1,8 % to the TPES.

2.1.2	Energy Consumption

The total final energy consumption (TFC) in 2003 was 26.29 Mtoe compared to 20.5 Mtoe in 1990. The long-term development of the gross domestic consumption is marked by a steady while moderate increase, influenced in the short term by external developments like oil prices, economic background and weather factors.

2.1.2.1	By Sector

The consumption is divided almost equally among the three sectors: industry, traffic and households. In the year 2003, industry consumed 29.2% of Austria’s final energy consumption, down from a high of 40.8% in 1974. Transport has seen a rise in shares in the past, going from 27.3% in 1997 to 29.0% in 2003. Private households account for 28.3% in 2003.

Since the 1970s the industrial share decreased while traffic rose continuously from 20% to 30%. The share of households fluctuated around 30% for the past 30 years depending on climate conditions.

•	Includes commercial, public service and agricultural sectors.

Figure 2‑4: Austrian Total Final Consumption by Sector

2.1.2.2	By Product

To cover the recent increases in Total Final Consumption, oil, renewable and electrical energy and district heating are used. Gas increases moderately, while the use of coal in the final consumption continues to decline. The structure of the TFC changed significant in the long-term analysis. The Coals decreased to a quarter of its 1970s share, oil by 10%. Gas doubled its share, electricity increased from 12.6% to 20%. Renewable energies rose by 3%, district heating quintupled its contribution since the 1970s.

2.1.3	Energy Dependency

Austrian energy dependency amounts to 69% of its TPES. The majority of Austria’s net energy imports come in the form of oil and natural gas. The import shares of these two fuels have both risen considerably since 1973. In 1973, Austria imported 79% of the oil it consumed and in 2000 it imported 90%. The rise in import share was even more pronounced with natural gas. In 1973, Austria imported only 41% of its gas demand, while in 2000, that figure was 81%. 

The long-term trend of increased reliance on imports is expected to continue as domestic fossil fuel resources become depleted. While Austria is a net exporter of electricity on an annual basis, the country also imports significant amounts of electricity, especially during the winter months when the hydroelectric stations do not operate at full capacity. In 2000, Austria imported 26.4% of the total electricity consumed, up from 12.9% in 1973 and a low of 8.2% in 1977.

In 2000, Austria imported 78% of its total supply of natural gas. This figure is expected to increase as domestic fields are depleted and demand continues to grow. The large majority of the imported gas comes from Russia; although supply sources have been diversified in recent years and at present nearly 20% of imports come from other countries, notably Germany and Norway. Austria has never experienced unexpected import cuts during its more than 40 years of purchasing gas from Russia and previously the Soviet Union. The large volumes of Austrian gas storage facilities of 140 days enhance natural gas security.

2.2	Czech Republic

The Czech Republic is landlocked in Central and Eastern Europe, with its borders with Germany, Poland, Slovakia and Austria. It has total area of 78 900 km2 and population of 10.2 million people. The GDP per capita was $18 500 in 2004 (in purchasing power parity). The GDP is mainly composed of services that represent nearly 57.3% of GDP, followed by industrial sector with less than 39.3% and agriculture with 3.4%.

The Czech Republic can be divided into two parts: the Bohemia region and the Moravian region, whereas the first one consists more of plains in the center with mountains only on its borders with Germany and Poland, the latter has mountains on its east end, the south is more lowland. The highest Czech mountain reaches 1602 m above sea level.

Since 1989, the Czech Republic has transited from a largely state-owned, centrally planned economy to one with greater market orientation. The Czech Republic (along with nine other countries) joined the European Union in May 2004. The move to accession and the continuing efforts to conform to EU requirements constitute a major reform effort. The country is now obligated to adopt the euro as a currency but cannot do so until the Maastricht criteria are met. In 2004, the government ran a budget deficit equal to 3% of GDP, which is conforming to the Maastricht criteria. However, the public finance reform is still missing. Economic growth in the Czech Republic has slowed in recent years but still remains more robust than that seen in the euro zone economies. In 2005, Czech GDP growth was 6% in contrast to a rate of 1.3% for the 12 countries using the euro.

2.2.1	Energy Production

Due to huge restructuring of the Czech economy, total primary energy supply has declined since 1990 by 6.9%. In 2003, the total primary energy supply of the Czech Republic was 44.1 million tones of oil equivalent (Mtoe). Unlike other EU countries, in the Czech Republic, it is the coal that plays the major role in energy supply mix. Despite its decline, it still represents almost half of the Czech TPES. The decrease is mainly substituted by natural gas that sees a great boom (the share of natural gas on TPES rose from 11.1% in 1990 to 17.8% in 2003). Use of nuclear power rises significantly as well. However, concerning Czech energy resources, or domestic energy supply, the Czech Republic’s reserves are relatively poor. The only larger source is the coal; its production is however continuously declining. Coal makes almost three quarters of the Czech energy sources production. Other fossil fuels, like oil or natural gas, or energy from RES is almost negligible – they represent less then 7%. On the other hand, we observe gradual growth of nuclear energy, which now gets to almost 19% of overall production.

Figure 5: Czech Total Energy Production

2.2.1.1	Coal

The coal production has been gradually decreasing since the end of eighties (as shown on the graph below). There was a fall by 30% in coal production between 1990 and 2003. The overall production of coal reached its peak in 1979 when it represented more than 40% more than current production, i.e. 42.63 Mtoe. In 2003 then, only 24.2 Mtoe of coal was extracted, i.e. almost fifty million of tons of coal. The trend is such that in the following years or decades the production is expected to continue to fall. However, the State energy policy (SEP), as it will be discussed later, assumes that renewed coal mining could be one of the possible solutions to the energy dependency.

Figure 6: Czech Hard and Brown Coal Production

2.2.1.2	Nuclear Energy

Nuclear energy plays a great role in the Czech energy mix. It also helps to balance the coal power plants and therefore improve the Czech position concerning GHG emissions and the Kyoto protocol. 

There are two nuclear power plants at the moment – Temelin and Dukovany, where the latter is now being reconstructed in order to prolong its lifetime. Together, these two power plants generate almost a third of the total country’s electricity (concretely 24.364 GWh out of 76.658 GWh).

In future, the Czech Republic counts on nuclear energy as one the important parts of its energy mix. In compliance with the State Energy Concept, the nuclear power share in total electricity generation should rise from 33% now to 39% in 2030. 

2.2.2	Energy Consumption

In the last two decades, the Czech Republic registered a general decrease in final energy consumption. The reason was again, as with the energy supply, the transformation of the Czech economy. The total final energy consumption in 1990 was 36.63 Mtoe compared to only 25.75 Mtoe (26.53 by IEA) in 2003. However, the consumption is now starting to rise again (from approximately year 2000), following the growth of Czech economy. According to IEA prediction, in 2030 the final consumption would be about 31 Mtoe.

2.2.2.1	By Sector

Differentiating the energy consumption by sector, the largest consumer always was and still is the industry. In 2003 its share on TFC was nearly 40%. As to the trend, the share of industry declined in the 90s – in 1990 industry accounted for 58%, but due to restructuring the ratio fell down to the aforementioned 40% in 2003. However, according to the IEA forecast, it should rise a bit again in the next three decades - up to 42%
.
The second very important representative is the transport sector. It currently accounts for about the same share as the household sector – about 23% - but the significant factor is in its growth. The final energy consumption in the transport sector almost doubled between 1990 and 2003. On the contrary, the household consumption in the same period fell by more than 30%.

Figure 7: Czech Total Final Energy Consumption by Sector

2.2.2.2	By Product

There has been a big change in the structure of energy resources in the Czech TFC since 1990. The main change can be observed in coal. In the 1970s it accounted for 60.8% of the TFC, whereas in 1990 it was already 54.5% and in 2003 the share of coal declined to only 14.3%. This decline can be explained by government decisions to reduce the share of coal due to both its economic inefficiency and environmental impacts. The decline will probably continue, reaching only 5% in 2030.

The largest source as to TFC is currently oil that in 2003 accounted for almost 32% of the TFC; however, its share should be declining in the next thirty years. It could account for only 28% by that time.

Natural gas has seen a great upsurge in the 90s, as it actually made up for the loss in coal share. In 1990, the natural gas represented only less than 12% of the TFC; in 2003, it was already almost 24%. In thirty years, the proportion could change further up to nearly 35% for natural gas.

The TFC of renewable energy sources (RES) grows quite significantly in last few years, their share remains however still very low (about 3%) and mainly due to Czech geographical conditions this should not change greatly in future. 

2.2.3	Energy Dependency

The growing import dependence makes all the European Union quite frightened. It is estimated that if nothing is done, the dependence on external energy resources could change from current circa 50% to almost 70% in thirty years. 

The situation in the Czech Republic, however, is slightly better. In 2003, the import dependence was less than 25%. Yet, in 2030, even if the SEP goals are achieved, it will most probably also increase, namely up to nearly 58%.

Dividing the energy dependence by products, coal seems to be nowadays an unproblematic case. The Czech Republic is even a net exporter of this commodity. In 2003, it exported 4.9 Mtoe of coal and imported 1.9 Mtoe. The imports came from Poland. The export went mainly to the neighboring countries and also to Hungary.

The Czech Republic is also a net exporter of electricity, mainly thanks to nuclear power generation. In 2002, its net exports reached 11.387 GWh, which means 15% of its domestic generation. The exports were oriented towards Austria, Germany and Slovakia. On the other hand, the Czech Republic is a net importer from Poland.

As coal is the only energy source the Czech Republic has, it is quite obvious that the others have to be imported and therefore the Czech Republic is almost completely dependent on imports of oil and natural gas.

Due to historical connections, the majority of oil is still imported from the former Soviet Union (nowadays the Russian Federation accounts for 64% of total oil imports), followed by the Middle East. Small part of the imports comes also from Norway. But as we can observe the continuous concentration of oil resources, the dependence on the Middle East and the former Soviet Union will grow. The dependence on oil was more than 95% in 2003.

As to natural gas imports, the dependence is even higher – almost 99%. The historical ties (and the pipelines built) influence the importing countries. The entire imports used to come from Russia before 989. During the 90s the Czech Republic tried to diversify these imports a bit and began to trade with Norway as well. However, the Russian resources still play a major role in the Czech gas import structure. In 2002 27% of imported natural gas came from Norway, the rest was from Russia. Due to existing pipelines and contracts, this ratio is not very likely to change in future.

3	ENERGY POLICY

3.1	Austrian Energy Policy

3.1.1	Government measures

Austrian energy policy works within the framework of the country’s membership of the European Union (EU), the International Energy Agency (IEA) and the Energy Charter Treaty (ECT). Austria is a federal republic with nine states. Federal level responsibilities cover issues that require co-ordination between states, such as energy security, while the states’ responsibilities involve issues endemic to each state, such as building code efficiency regulations and subsidies for renewable energy, where diverse local conditions require different types of approaches. The Federal Ministry of Economic Affairs and Labour is the main body responsible for energy policy on the federal level. Other ministries involved in energy matters include the Federal Ministry of Agriculture, Forestry, Environment and Water Management, the Federal Ministry of Transport, Innovation and Technology, and the Federal Ministry of Finance. Government involvement in the energy sector also includes state ownership of energy companies. The federal government owns 35% of OMV, Austria’s dominant gas and Oil Company, and the law requires that electric utilities be at least 51% owned by either the federal or the states governments. 

Austria’s energy policy is committed to the following four objectives: security of supply, cost-effectiveness, and environmental and social compatibility.

The energy policy seeks security of supply for both the provision of primary fuels to the country as a whole and the delivery of fuels to final consumers. In the case of the two primary fossil fuels in the market, natural gas and oil, this means security through storage capabilities within the country, and extensive international pipeline capacities. Policy governing security for energy use by the consumer relates primarily to electricity, where the regulator for that field is responsible for monitoring the adequacy of supply in both the short and the long term. 

The government seeks cost-effectiveness in assessing policy decisions. This can be seen in the liberalization of the natural gas and electricity sectors, where the introduction of competition and supplier choice is intended to improve efficiency in the energy supply industry and subsequently lower costs to final consumers. Government R&D and energy efficiency initiatives are intended to reduce energy costs to the consumers by developing more efficient equipment and technology.

Austria has traditionally placed emphasis on the environmental impacts of energy production and use. In 2002, Austria ratified the Kyoto Protocol, which obliges the country to reduce greenhouse gas emissions by 13% below the 1990s level by the period 2008-2012. The country has developed a “Klimastrategie”, a comprehensive plan, which outlines measures to reduce GHG emissions to reach the target. It includes a blueprint of actions in six categories, with space heating and transport as top priorities, and incorporates Kyoto flexible mechanisms as well. The electricity liberalization law includes targets for the inclusion of renewable energies in the electricity mix. 

Austrians have long worked within the “Social Partnership”, in which business, labour and agriculture discuss national policy. This forum allows all three to express their views and influence the direction of energy policy, ensuring that decisions are acceptable to the different segments of society.

These objectives are pursued in the energy sector through various activities: Liberalization of energy markets, diversification of energy sources and suppliers, energy taxation, price monitoring, public service obligation, mandatory oil stocks and R&D.

Over the last few years, Austria has worked to liberalize its electricity and natural gas sectors via the Electricity Industry and Organization Act (ELWOG 2000) and the Gas Act.

3.1.2	State of Implementation

While the energy supply can be considered secure in the short term, dependency and insecurity will continue to increase in the long run despite long-term supply contracts.

The results of the liberalization have been mixed and vary by costomer class. While larger consumers have enjoyed reduced power prices, smaller customers have seen little or no change to their overall bills.

Goals for renewable energies and the environment are ambitiously high but the implementation lacks consequence and control. The missing coordination of the responsible institutions and authorities is a drawback. Initiatives and measures are billed in high numbers but problems arise with project control and organized cooperation. The implementation becomes needlessly expensive and inefficient. Research and Development in the energy sector lacks monitoring and a complete conception.

The Kyoto Protocol has had and will continue to have a great effect on the Austrian energy policy and its evaluation by the public. In 2002 is has already been foreseeable that Austria will fail to meet its commitments of a 13% reduction of its greenhouse gas emissions below the 1990 level. Instead, from 1990 to 2000, emissions increased by 2,7%. 

In 2002 the government published its “strategy for sustainable development” (Die Österreichische Strategie zur Nachhaltigen Entwicklung), which established another goal of reducing energy intensity at a rate of 1% per year beyond the average energy intensity improvements seen in the EU from 1990 to 1997. 

The last IEA report published in 2002 appraised positively the effects of liberalization including the work of the regulation authorities and the grid access. It criticized oligopoly structures, the lack of price reduction for small customers and the high grid tariffs.
 
3.2	Czech Energy Policy

3.2.1	Government measures 

The Czech Republic’s main document that deals with the energy issue is the State energy policy prepared by the Ministry of Industry and Trade. This document had been prepared for quite a long time and was finally approved by the Government in March 2004. It is based on the study that was made in 2003 in order to update the Czech energy policy.

The SEP is divided into three main parts. The First one consists of main visions and goals, the second deals with measures that have to be taken, and the third describes the energy scenario till 2030. The SEP defines three main visions, i.e. basic priorities that the Czech energy policy should follow. These are independence (i.e. from foreign sources as a whole, but with emphasis on the risky regions), safety (nuclear safety as well as supply security) and sustainable development. These three priorities are further developed into more specific goals that should lead to fulfillment of the above-mentioned visions. The goals resemble the priorities that the European Union defined both in the older Green Paper on security of supply from 2000 and the newest Green Paper on European Energy Policy published in March 2006.

Firstly, the SEP puts great emphasis on energy efficiency. It is said to be the cheapest possibility, to decrease the import dependency. Secondly, there is the goal of ensuring the “effective amount and structure of primary energy sources consumption”. In practice it means mainly increasing the share of RES, renewal of the coal mining and use of nuclear energy. The SEP relies mainly on domestic resources as it considers them to be the safest as well. The third goal deals with environmental friendliness. High priority is given to minimizing greenhouse gases emissions as this results from the Kyoto commitments. Last but not least, there is the goal of completing the transformation and liberalization of the energy sector. This is also the goal of the whole European Union and the Czech Republic is bound in this domain by several directives that have to be implemented anyway. The liberalization, if properly implemented, should help decrease the already high prices of energy.

The second part of the document identifies the measures that are to be used. These are legislative measures, state support and reduction programs, long-term outlooks and programs, or analytic and media measures.

The last part of the document analyses probable future development. It works with the so called green scenario that counts on the assumption that all the indicative goals will be met and serves as the reference scenario. According to it, e.g. the share of RES on gross electricity consumption should grow from 6,2% in 2005 to 16,8% in 2030. The primary energy sources consumption should not increase significantly, as it would be 1737 PJ in 2005 and 1797 PJ in 2030. In general, the energy consumption should remain at a similar level. There should be a great change in the structure of primary energy sources – the importance of natural gas, nuclear energy and RES will grow at the expense of oil and coal. However, despite all of these measures, the import dependence will, as it was mentioned above, almost double.

3.2.2	State of Implementation

In evaluating the State energy policy, as well as the impacts on Czech import dependency, and their fruitfulness, there are two main sources of criticism. One of them is Ministry of Industry and Trade itself, which at the end of 2005 published a document evaluating the adopted strategy; the second is International Energy Agency that in its papers and reviews criticizes its members’ energy policies.

In its assessment the Czech ministry states that there are already differences between the predicted data and the real numbers. For instance, the growth of energy consumption was three times higher than expected (2.25% instead of 0.7%). The second goal – the energy efficiency does not seem to improve so far either. The same is the RES target; the share of RES on electricity consumption was on 4% instead of 5 - 6%. The dependence indicators show the rise in import dependency to be more than presumed. In general however, the Ministry does not plan to change the goals for the time being arguing that the time between the former SEP and its evaluation is still too short.

Somewhat different is the opinion of IEA. The main criticism, coming from the IEA, concerns the goal of increasing the share of renewable energies. The investment intended for the subsidy of RES should, according to IEA, be rather spent on increase in energy efficiency. Due to its geographical conditions the RES are not very cost efficient at the moment. The price for electricity from RES is now 3CZK/kWh, whereas it is far below 1 CZK/kWh for the electricity from conventional or nuclear power plant. The RES system is based on two ways of support: the feed-in tariffs and investment subsidies and loans. The IEA warns that this does not lead the producers to reduce their costs. 

The other domestic source of energy - the nuclear energy - on the other hand has the full support of the IEA, as it considers nuclear energy as an option in optimizing Czech energy mix. Only the uranium mining in Dolni Rozinka is seen as uneconomic and the mine should be closed as the Czech government previously planned it.

IEA (as well as the European Union) also criticizes the insufficient energy efficiency. There has been progress in lowering the energy intensity; however, the decline by 17% from 1990 to 2003 is much lower than the decline in other central European post-communist countries. Although the SEP declares to put an emphasis on the energy efficiency, the measures then are still quite insufficient.

4	CONCLUSION

4.1	Comparison of Energy Statistics

The Czech Republic and Austria are Central European countries of comparable population, 10.2 million to 8.2 million inhabitants, and size, 78.900km² to 83.850 km². Differences in the energy supply and demand originate from a diverse topographic base, historical development and social attitudes.

In absolute numbers, the TPES in 2003 has been 44.18 Mtoe in Czech Republic compared to 33.18 Mtoe in Austria. Considering the energy per capita the Czech 4280 kgoe/cap are only slightly higher than the Austrian 4014 kgoe/cap. Mayor differences are still apparent regarding the energy intensity. Austrian energy intensity is a sixth part of the Czech Republics due to Czech heavy industries. 

The domestic production in the Czech Republic resulted in 32.63 Mtoe in 2003; primarily based on coal mining, 24.2 Mtoe, and nuclear energy, 6.67 Mtoe. Austria production accumulates to 9.99 Mtoe with the main contribution of 6.68 Mtoe coming from renewable energies, i.e. hydropower and biomass. Austrian energy dependency of 69% is considerable higher than the Czech 25%. The Czech Republic is a net exporter of electricity and solid fuel (coal) but imports oil and gas. Austria is net importer of solid fuels, oil and gas. Depending on climatic conditions the country is a net ex- or importer of electricity in the yearly average.

The Czech final energy demand of 25.75 Mtoe is slightly lower than the Austrian 26.3 Mtoe in 2003.   Differences arise regarding fuel and consumption by sector. Oil, 6.2 Mtoe, and gas, 6.9 Mtoe, are the main Czech fuels while oil, 11.3 Mtoe, and electricity, 5.2 Mtoe, dominate Austrian final consumption. The highest consumer in the Czech Republic is industry, 40 %, followed by transport and households with 23% each. Austrian Consumption is divided almost equally among the three sectors, (29, 28, and 28%).

4.2	Comparison of Energy Policy

Concerning the energy policies, i.e. governmental measures of both states, it can be stated that in general, they both begin with similar goals but the ways to reach them vary. This is probably mainly due to geographic conditions, state form, and also due to overall public opinion.

The first difference tends to be more of formal character and has its origin in the state form. Austria is a federal republic; therefore the energy policy is divided into issues that need interstate coordination and are discussed on federal level and issues that are left for the decision of each federal state. On the contrary, the Czech Republic is a unitary state; its energy concept therefore is dealt only on one level.

As mentioned above, the goals both states have set in their energy policy documents are influenced by the organizations these states take part in – mainly the EU – so the targets are defined in a very similar way. In Austria, it is the security of supply, environmental and social issues and cost-effectiveness. In the Czech Republic, the so-called visions are safety, sustainable development (environmental friendliness) and independence (which is described as a need for energy efficiency and liberalization).

The means to achieve these aims, however, differ quite substantially. On one hand, Austria wants to deal with the energy problems mainly by ensuring the security of supply, i.e. diversifying its importing resources as much as possible, and by relying on and using more renewable energy sources. On the other hand, the Czech Republic sees the way to overcome the dependence by focusing on the domestic resources, which according to the government’s opinion means primarily attention to coal mining and nuclear energy (which is however strictly out of question in Austria). The Czech Republic, according to IEA, should not concentrate on RES as much as e.g. Austria, as it is, in its conditions, cost inefficient.

Yet there can also be found some points of consensus in both policies. These originate in “international” bindings of both states. One of them is the need to meet the engagements set in the Kyoto protocol. Both Austria and the Czech Republic have to have their emissions decreased by 2012. The only difference is that Austria will probably not be able to meet these engagements, whereas the Czech Republic, primarily thanks to restructuring of its economy during the transformation process, should not have any problems with this target.

The other similar goal is the need for liberalization of energy markets. It is in compliance with European directives that both states have to ensure the competition on electricity and gas market. The European Commission may now also pursue both states for not opening their markets properly.

4.3	Epilogue

Apart from differing approaches and backgrounds, resulting from historical development and topographic possibilities, both neighboring countries will face common menaces to their energy supply in the future. A potential for future cooperation exists and has been spotted. Joint operation can assist in the quest to overcome dependence while promoting mutual understanding for the situation over the border.
APPENDIX

BIBLIOGRAPHY

Sources

(1) European Commission, Eurostat

	Energy & Transport in Figures 2005

(2) Bundesministerium für Wirtschaft und Arbeit

	Stand und Entwicklung der Energieversorgung in Österreich, Ergänzungspapier2003

(3) International Energy Agency

Energy Policy of IEA Countries, Review Austria 2002

(4) Bundesministerium für Land- und Forstwirtschaft, Umwelt und Wasserwirtschaft

	Strategie Österreichs zur Erreichung des Kyoto Ziels

(5) International Energy Agency

Energy policies of IEA countries, Review Czech Republic 2005, Paris 2005

(6) International Energy Agency

World Energy Outlook 2004, OECD, Paris 2004

(7) Ministry of Industry and Trade of the Czech Republic

State Energy Policy of the Czech Republic [http://download.mpo.cz/get/26650/28392/312009/priloha001.doc, 28.6.2006]

(8) Ministry of Industry and Trade of the Czech Republic

The Raw Material Policy of the Czech Republic
[http://download.mpo.cz/get/26649/28462/312155/priloha001.doc, 28.6.2006]

(9) Ministry of Industry and Trade of the Czech Republic

Vyhodnocení naplňování cílů a sociálních dopadů realizace Státní energetické koncepce (Evaluations of the SEP) [http://download.mpo.cz/get/26650/26702/295957/priloha002.pdf, 28.6.2006]

(10) Ministry of Industry and Trade of the Czech Republic

Vyhodnocení statistických údajů z energetiky za rok 2005 
(Evaluation of Energy Statistical Data in 2005) [http://download.mpo.cz/get/28031/29736/320036/priloha001.pdf, 28.6.2006]

Further Reading

www.cia.gov

www.czso.cz Czech Statistical Office

www.ekolist.cz

www.energetik.cz

www.europa.eu

www.iea.org 	International Energy Agency

www.oecd.org 

	
ACKNOWLEDGEMENTS

We would like to take to this opportunity to thank those who contributed to the completion of this text. We appreciate the times they took from their busy schedules to assess our work during various phases of the project. 

	Prof. Jirina Jílková, our scientific supervisor 

	Laura Wilson, for extensive proofreading