The largest electricity supplier in the Czech Republic, ČEZ, has recently unveiled a significant reduction in electricity prices, potentially benefiting up to two million customers with annual cost savings. However, this positive development is overshadowed by the introduction of additional charges for renewable energy support and distribution fees commencing in January. Consequently, most households are expected to experience higher overall electricity expenses, although there may be potential savings in gas prices.

While the news of electricity price decreases might initially appear promising, the reality is different. According to Jiří Gavor, an analyst at ENA, the net impact on consumers’ wallets is expected to be unfavorable. Although the energy component of electricity will become cheaper, individuals will need to pay an additional six hundred Czech crowns per megawatt-hour of electricity consumed for renewable energy support, along with higher distribution fees.

As a result, consumers could incur at least an additional 1,300 CZK for each megawatt-hour of electricity used. Given the average consumption of approximately 3 MWh, households may find themselves paying around four thousand crowns more in the upcoming year compared to current rates.

This pricing development contrasts with a recent statement by the Minister of Finance, Zbyněk Stanjura, who asserted on Czech Television that the average electricity price increase would be zero. Tomáš Vrňák, an energy analyst at Ušetřeno.cz, has expressed the need for more transparent communication from the government regarding the anticipated rise in distribution fees and the reintroduction of renewable energy charges next year. Vrňák emphasized that the claim of an average zero increase, as stated by Minister Stanjura, does not align with the expected reality. In fact, the price of electricity may increase by up to fifteen percent compared to current rates.

While the electricity outlook may be challenging for consumers, there is better news for gas customers. Gas prices have experienced more significant reductions than electricity prices, and the regulated component of gas pricing is not as substantial since it does not encompass renewable energy support. Although the regulated part will also see an increase, the decline in commodity prices is expected to offset it, resulting in savings for gas customers.

Article by Prague Forum