Czech state to provide energy-intensive companies with CZK 3.5bn in aid, cut payments for renewables

The state will provide 3.5 billion crowns in aid to energy-intensive companies facing high energy prices. The money will be used to reduce companies’ payments for renewable energy sources at the high- and very-high-voltage levels by an average of two-thirds. The aid is intended for nearly 25,000 consumption points. Prime Minister Petr Fiala (ODS) said this at a press conference today.

Industry and business representatives had called for state aid because of the sharp increase in regulated energy prices. They were concerned that energy costs could triple for some companies, weakening the competitiveness of domestic industry.

„Together with the Confederation of Industry and Transport and the Czech Chamber of Commerce, in less than two weeks since the decree was issued, we found a solution that will help maintain the competitiveness of Czech companies, preserve jobs and boost economic growth,“ Fiala said.

According to Fiala, the state will not subsidise energy for all companies across the board. „We are focusing on targeted aid for those whose very existence could be threatened by the price increase,” the prime minister added.

The state will draw the money for the aid from next year’s budget, either from the Ministry of Industry and Trade’s budget chapter or from funds left unspent in this year’s budget. The amount is to be divided equally among entities connected to the high- and very-high-voltage levels. This will cover just under 25,000 consumption points. Government aid will reduce the contribution towards payments for renewable energy sources by CZK 107 per MWh consumed, excluding VAT, for entities connected to the high-voltage level, and by CZK 167 for those connected to the very-high-voltage level. The aid will be calculated according to reserved capacity. The contribution for renewable energy sources, excluding the state subsidy, is typically CZK 495 per MWh consumed, excluding VAT.

The government will use a measure introduced in its consolidation package to provide aid to companies. „This now allows state aid with payments for supported energy sources to be provided at any time during the year and also makes it possible to target the aid at specific voltage levels, for example, as in this case, at companies,” Industry and Trade Minister Jozef Síkela (STAN) explained.

In addition, Síkela and Finance Minister Zbyněk Stanjura (ODS) agreed with representatives of the Czech Chamber of Commerce and the Confederation of Industry and Transport to hold regular meetings next year. The meetings are expected to focus on discussing systemic solutions to prevent unpredictable increases in the regulated component of energy prices in the future. „It also remains the case that if any negative economic developments occur, we as a government will look for further ways to help companies,” Stanjura added.

Under a November decision by the Energy Regulatory Office (ERÚ), the regulated component of electricity prices was set to rise year on year by 105.5 percent at the high-voltage level and by 190.9 percent at the very-high-voltage level next year. These levels are used mainly by large consumers. At the low-voltage level, used by households and small businesses, the year-on-year increase is set at 66.7 percent. Regulated gas prices will rise year on year by 41.8 percent for large consumers and by nearly 39 percent for households. The Energy Regulatory Office will now launch a five-day consultation process on changing its price decision.