Impacts of Reclassified Brown Coal Reserves on the Energy System and Deep Decarbonisation Target in the Czech Republic

In 2015, a 24-year-long prohibition of coal mining within some territories in the North Bohemia coal basin was lifted and as a consequence mining a part of the brown coal reserves might well be resumed. This paper analyses the impacts of maintaining the ban versus three options for a less environmentally stringent policy on the Czech energy system; fuel-and technology-mix, the costs of generating energy, emissions and related external costs up to 2050. We find that overall the effect of lifting the ban, on coal usage, air pollutant emissions and hence externalities is rather small, up to 1-2% compared to the level of keeping the ban. The small difference in the impacts remains even if changes in the prices of fossil fuels and European Emission Allowances or different development in nuclear power usage are assumed. In fact, changing these assumptions will result in more pronounced differences in the impacts than the four policy options might deliver. Maintaining the ban would not achieve the European Energy Roadmap 2050 target and the newly adopted policy and the other two counter-environmental proposals would miss the 80% reduction target to an even greater degree. The environmental and external health costs attributable to emissions of local air pollutants stemming from power generation are in a range of 26-32 billion over the whole period and decline from about 0.5% of gross domestic product in 2015 to 0.1% in 2050.