Beginning in January 2024, Czech households might experience a notable surge in energy prices, particularly for electricity. After a hiatus in payment for the support of renewable sources, which has been in effect since October 2020 and is set to continue until the end of this year, the costs may be reintroduced. However, the exact impact on consumers remains uncertain.

Among the proposed options is a return to the pricing structure that was in place until September 2023, with consumers paying CZK 600 per megawatt-hour for electricity generated from renewable sources. For households with an average consumption of around 3,000 kilowatt-hours, this could translate to an annual increase of CZK 1,800.

While the state has covered all payments during the current period, the plan for next year involves distributing the costs among households, businesses, and the state. Finance Minister Zbyněk Stanjura emphasized the need to address the current unsustainable situation, suggesting a redistribution of costs.

Minister of Industry and Trade Jozef Síkela also supports the idea of shared participation among individuals and businesses. An alternative approach being discussed within the coalition involves reducing payments specifically for households.

To enable flexibility in determining fees for different customer categories, the ministry has proposed an amendment to the law. This amendment would also allow for adjustments to the subsidy from the state budget based on the evolving situation.

Throughout the period from October 2020 to the end of 2023, the state is expected to have expended around CZK 42 billion to exempt households from renewable resource payments. If the state fully reinstates these payments, the trend of decreasing energy costs seen in recent months could be reversed.

Energy industry analysts, including Jiří Gavor of ENA, acknowledge the potential impact of such a decision. They note that while suppliers may welcome the coverage of costs, it could potentially offset the recent declines in electricity and gas prices. Gavor suggested that the government could explore various funding sources, including emissions permits, to address the financial implications of the renewable resource support.

Article by Prague Forum