Czech households and industries are bracing for an impending surge in electricity prices next year, primarily driven by a substantial increase in the regulated component of electricity costs. This price hike is expected to impact most households across the country, albeit not uniformly. For instance, residents of Prague are likely to experience a comparatively lower increase in distribution costs and circuit breakers than other regions. However, a common factor affecting everyone is the return of the fee for renewable energy sources (POZE). Industry representatives have voiced concerns that these escalating prices could jeopardize the competitiveness of the Czech industrial sector.

The Energy Regulatory Office (ERÚ) has proposed a significant rise in the regulated component of electricity prices for the upcoming year. For households, this increase is anticipated to be 71% higher year-on-year, translating to a price uptick of approximately 1408 Czech crowns per megawatt-hour (MWh), including value-added tax (VAT).

Large consumers will experience even more substantial increases in the regulated part of electricity prices. On the high-voltage level, this component is projected to surge by 113% year-on-year, while on the very high-voltage level, it is expected to spike by a staggering 206%. In contrast, the increase in the regulated component for gas is anticipated to be slightly lower. For households, the controlled part of gas is predicted to rise by approximately 39% year-on-year, resulting in a price increase of around 125 Czech crowns per MWh of gas.

Jiří Gavor, an analyst from ENA and the executive director of the Association of Independent Energy Suppliers (ANDE), has noted that the majority of consumers are likely to witness an increase in their electricity bills next year. Customers whose electricity prices had declined to around 3700 Czech crowns per MWh over the course of the year are expected to return to price levels akin to the beginning of this year.

However, the Chamber of Commerce has raised alarm bells, warning that energy costs could double or even triple for certain manufacturing companies in comparison to this year. This dramatic surge in the regulated components of energy prices not only threatens the fragile recovery of the domestic economy but also places Czech companies at a disadvantage when compared to their counterparts in other European Union countries where energy prices are expected to remain lower.

Article by Prague Forum