The Czech government has unveiled a plan to allocate 3.5 billion CZK to assist energy-intensive companies grappling with the impact of soaring energy prices in the coming year. Prime Minister Petr Fiala announced the aid initiative at a press conference, specifying that it will target companies operating at high and very high voltage levels, aiming to alleviate financial pressures by reducing payments for renewable energy sources by an average of two-thirds.

Fiala emphasized that the aid is strategic and focused, stating, “We are not subsidizing across the board. Broad-based subsidies are no longer needed, but we are helping those with a problem with the increase and where there could be a threat to operation. The aid also concerns companies operating in glassmaking, ironworks, food companies, and so on.”

The Minister of Industry and Trade, Jozef Síkela, provided additional details, indicating that the aid is intended for approximately 25,000 pick-up points. The reduction in the contribution to payments for renewable sources will be substantial, with entities connected at the high voltage level seeing a reduction of 107 CZK for consumed MWh (excluding VAT), while entities connected at the very high voltage level will experience a reduction of 167 CZK. The aid will be deducted based on the reserved capacity.

The government’s decision to support energy-intensive companies follows an agreement by the Energy Regulatory Office acknowledging significant year-on-year increases in the regulated part of electricity prices at the high voltage level (105.5%) and very high voltage level (190.9%) for the upcoming year.

Industry representatives and entrepreneurs had sought government assistance, expressing concerns about a potential tripling of energy costs for some companies and the adverse impact on the competitiveness of the domestic industry. Jan Rafaj, President of the Union of Industry and Transport, welcomed the government’s decision, acknowledging its commitment to mitigating the burden on companies and maintaining economic resilience.

The allocated funds for supporting these companies will be drawn from next year’s budget, sourced from the Ministry of Industry and Trade (MIT) chapter or unused funds from the current year’s budget. The government will leverage measures in the consolidation package to facilitate timely and targeted aid, demonstrating flexibility in addressing the evolving challenges faced by energy-intensive sectors.

Article by Prague Forum