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Major reforms in the Czech energy sector have been initiated to reverse 40 years of central planning, subsidized energy pricing, unchecked pollution from coal-fired plants, concerns over nuclear safety and fuel cycle management, and dependence on the former U.S.S.R. for oil, gas, and nuclear fuel processing. Prices for electricity, heat, and natural gas paid by industry are close to western levels, but subsidized prices for households are as much as 40% lower and below economic cost. State control of major energy enterprises is being reduced by moving toward government-regulated, investor-owned companies to raise needed capital, but with a strategic stake retained by the state. Foreign firms will participate in privatization, but they are not expected to acquire a controlling interest in Czech energy companies. Economic conditions in the Czech Republic are now improving after the disruptions caused by restructuring since 1989 and separation of the former Czech and Slovak Federal Republics in January 1993. The downturn in the economy after 1989 was concentrated in energy-intensive heavy industry, and recovery is paced by consumer trade, services, light industry and construction. Energy use in relation to gross domestic product (GDP) has declined, but it is still significantly higher than in OECD (Organization for Economic Cooperation and Development) countries. The GDP increased by 2% in 1994 after dropping 22% between 1989 and 1993. A positive balance of payments has been achieved, with foreign investment offsetting a small trade deficit. The government`s external debt is only 4% of GDP. This report studies the application of lignite resources within the newly formulated energy policies of the republic, in light of a move toward privatization and stronger air pollution regulations. Lignite has represented the major energy source for the country

Advanced power assessment for Czech lignite task 3.6. Topical report