The “coal villain” of the European Union? Path dependence, profiteering and the role of the Energetický a průmyslový holding (EPH) company in the energy transition

• Published in: Energy research & social science Vol. 76; p. 102066
• Main Authors: Černoch, Filip, Osička, Jan, Mariňák, Sebastián
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01.06.2021
• Subjects: Capacity remuneration mechanism; EPH; Niche actors; Rent-seeking; Stranded assets; Utilities; Rent-seeking; Capacity remuneration mechanism; Utilities; Stranded assets; EPH; Niche actors
• ISSN: 2214-6296; 2214-6326
• DOI: 10.1016/j.erss.2021.102066

•The EPH company has grown among the biggest European utilities over just a decade.•Its business strategy targets assets subject to stranding risk such as coal plants.•It has managed to extract substantial rent from capacity mechanisms.•It does not fit the established categories of actors in transition.•It can be seen as a facilitator or an obstructer of the ongoing transition. Parallel to the ongoing energy transition, Energetický a průmyslový holding (EPH) has emerged as one of the leading energy companies in the EU. Since its expansion started in 2009, the company has acquired assets worth EUR 16.7 billion while entering eight European markets, establishing itself as a crucial EU natural gas stakeholder and essential coal mining company in Germany and Poland, collecting around 26 GW of installed electricity generation capacity, and becoming the second largest polluter in the EU ETS. Unlike other rising stars of the shifting socio-technical regime such as Orsted or Tesla, EPH swims against the current. Depending on the perspective, it acts like either a scavenger, buying out “dirty” coal assets from energy incumbents, or a profiteer, taking advantage of the recently introduced capacity mechanisms which give an afterlife to such assets, thereby extracting rents from transition policies. EPH thus simultaneously contributes to the transition and compromises the goal of decarbonization. This paper offers a detailed analysis of EPH’s investment strategy. The resulting image is one of a company with Europe-wide aspirations but the structure and behaviour of a garage start-up—an image that does not fit the traditional perception of transition as a conflict between status quo and niche actors over the fate of the regime. EPH is interested not in the end-state of the regime change but in the change itself. We conclude by discussing what the emergence of such an actor could mean for current European energy transition policies.