Czech minister Havlíček wants to use EU funds for energy grid investments

Industry and Trade Minister Karel Havlíček (ANO) wants to make greater use of money from European funds for investments in the development and reinforcement of domestic energy grids, in particular the Modernisation Fund and the EU's SAFE defence programme. He said Czechia could draw tens to hundreds of billions of koruna in this way. He aims to limit the impact of the investments on the regulated component of energy prices. Havlíček said this in an interview with ČTK.

The final energy prices paid by consumers consist of a commercial and a regulated component. The commercial part is set by suppliers, while the regulated component is set by the state through the Energy Regulatory Office (ERÚ). The regulated component of energy prices primarily includes transmission and distribution charges.

The government of Prime Minister Andrej Babiš (ANO) decided in December that the state would take over all financing of supported energy sources (POZE), which include renewable and secondary energy sources, next year. This will newly burden the 2026 state budget by an additional roughly CZK 17 billion, with the state spending more than CZK 41 billion on the charges in total. Until now, POZE financing had been shared between the state and consumers. The aim of the change was to reduce regulated electricity prices, which have thus fallen by 15 percent year on year for households this year.

"We will of course continue," Havlíček said.

According to him, shifting POZE charges entirely to the state was the fastest possible measure to reduce energy prices. Further steps will, he said, require more time.

The minister wants to focus on other charges associated with the regulated component of energy prices. In the coming years, it is expected to increasingly reflect the growing need for investment in the development and maintenance of energy grids. "There are several solutions, but they are not short-term," he said.

Havlíček therefore wants to make greater use of European programmes for investments. He wants to draw funding primarily from the Modernisation Fund and the SAFE programme, which the EU has earmarked to strengthen investment in European defence capabilities. According to the minister, investments in transmission and distribution systems are crucial for the resilience and security of the state.

According to Havlíček, money from European funds should limit the impact of large investments on the regulated component of energy prices. Without further measures, they would rise significantly in the coming years, the minister said.

He rejected suggestions that the government was preparing to cut VAT on energy. "It is not a long-term solution, and it would not help companies either," Havlíček said.