Electricity costs for consumers in the Czech Republic could potentially increase by as much as 10 percent next year, according to a government decision that will shift a portion of the fee for renewable energy sources back to consumers. However, experts believe that any price hike is likely to be moderate, and there is even a possibility that prices might remain stable, albeit to a small extent.

The government’s decision mandates that households and businesses will once again bear the renewable energy charge starting in the coming year, reversing the reduction in energy costs observed this year. In 2021, the state fully covered these costs. Consequently, customers will again be required to pay a fee of CZK 599 for every megawatt-hour of electricity consumed.

Energy Minister Karel Síkela noted, “There is a possibility of a slight price increase, up to a maximum of 10 percent, but I anticipate it will be more moderate.” He disclosed that he did not support transferring the renewable energy levy to consumers and proposed alternative measures. However, he acknowledged that the current system, where the state fully covered these fees this year, is no longer sustainable.

The Energy Regulatory Office (ERO) estimates that the overall cost of supporting renewable energy in the coming year will be approximately CZK 36 billion.

In response to high energy prices, the state suspended the collection of these fees from the public from last October until the end of this year, with the state being the sole contributor. Prior to this measure, about half of the contributions were covered by the state, and the remaining half was borne by consumers.

Criticism has emerged regarding the decision to pass a portion of the renewable energy fee back to consumers. Some argue that people would be forced to pay for something they never wanted and suggest that the government should use the profits from the excess profits tax next year to compensate consumers for expensive energy. Concerns have also been raised about the possibility of future energy price increases.

While energy prices saw significant increases last year, they have been declining this year. At the beginning of the year, nearly all energy suppliers offered services at the government’s price ceiling, but most gradually introduced more affordable pricing options over the course of the year.

Article by Prague Forum