Analysis: This year's heating season in Czechia will be cheaper than last year's as fuel prices fall

This year's heating season will be cheaper than last year's. Wood, coal, gas and electricity prices have all fallen year on year. Gas prices, the fuel used for heating by the largest number of Czech households, have fallen by about 15 percent year on year, meaning an average household in a house could save around 3600 Kč over the season. Wood, however, remains the most cost-effective heating source. This is according to an analysis by XTB, whose representatives presented it to journalists today. Despite the decline, energy prices remain higher than before the energy crisis.

Due to cold weather, district heating plants in Czechia began the heating season this year in mid-September, a month earlier than last year.

According to XTB, the largest number of people in Czechia heat their homes with gas, accounting for approximately one-third of households. A roughly equal share of households is connected to district heating networks. These systems mainly use gas or coal for heating. Around one-tenth of consumers heat their homes with wood and another tenth with electricity. The remaining households use coal or alternative heating sources such as heat pumps.

According to the analysis, most consumers should pay slightly less than last year for heating, which accounts for the largest share of energy consumption. Wood prices have fallen the most year on year. XTB analysts estimate that a decline of around one-fifth should save an average household in an 81-square-metre house with average consumption around 2500 Kč over the heating season. Brown coal prices have also fallen by 19 percent year on year, which means annual savings of around 2900 Kč for a household of the same size.

„The situation is not as straightforward for electricity and gas. Although wholesale electricity and gas prices on the exchange have fallen by 33 percent and 28 percent year on year, respectively, the increase in the regulated component—by 65.7 percent for household electricity and 38.8 percent for gas—has significantly slowed the price decreases reaching end customers,“ said XTB chief analyst Jiří Tyleček.

„Those who want to heat their homes as cheaply as possible have long chosen wood. However, operating a solid-fuel boiler and preparing wood are labor-intensive, so it is not an ideal type of heating,“ the analyst said. He added that it always depends on boiler efficiency and how the energy is used.

Data from Srovnejdrevo.cz, which tracks supplier prices and facilitates wood sales, show that the current average price for one loose cubic metre (prms) is 1467 Kč, including delivery. In September last year, the price was 1845 Kč; it was highest in September 2022, at 2580 Kč per prms. „Although the heating season is approaching, we cannot expect firewood prices to rise. This year has not been particularly successful for the wood industry, so suppliers are trying to make up for it by offering discounts and various promotions, even at the expense of their own margins,“ Adam Borovský said on behalf of the website.

Analysts do not expect electricity and gas prices to rise significantly over the coming year. The course of the winter will be key, however. Further developments in the regulated component set by the state will also be important, and that component is expected to rise further. Analysts also noted that choosing the right supplier can lead to significant savings.