Experts: New Czech regulated energy prices are good for consumers, bad for development

According to analysts, the Energy Regulatory Office’s (ERÚ) decision on regulated energy prices for next year is good news for households, but bad news for the further development of the energy system in Czechia. They point to the need for substantial investment in developing and securing the grids. While many households will save money next year compared with this year, they say, planned investment spending will make regulated prices rise all the more sharply in the years ahead. This is according to comments from analysts to the Czech News Agency (ČTK). Some of them noted that elections are approaching and may influence the state’s decisions.

According to the ERÚ, final energy prices will fall on average next year. It estimates that electricity for an average household will be 10.1 percent cheaper year on year, and gas 8.5 percent cheaper. An average household without a fixed-price contract should therefore save thousands of crowns over the year compared with this year. The regulated component of the price, which is set by the state, will nevertheless rise by several percent for households next year: by 1.4 percent for electricity and 8.6 percent for gas, an increase of tens of crowns per megawatt-hour (MWh) consumed. Final energy prices will therefore fall thanks to lower prices from suppliers.

„The ERÚ’s price decision is good news for customers and voters, and bad news for the sustainable development of electricity distribution,“ said Michal Macenauer, strategy director at EGÚ Brno.

He pointed to a sharp increase in requests to connect microgeneration sources and new consumption points, as well as to install smart meters in electricity distribution. „Electricity distribution is already significantly underfunded overall, and this price decision contributes to that further. The less regulated prices rise now, the sharper the jump will be once the situation becomes operationally unsustainable. I consider the price decision reasonable for gas, but insufficient for electricity,“ Macenauer said.

XTB analyst Jiří Tyleček sees the movement in the regulated component of energy prices as having a somewhat pre-election character. „Last year’s sharp increase is not being repeated, but that does not mean the need for investment related to the energy transition to renewables is diminishing,“ he said. In his view, the need to invest in grids and the loss of transit fees for gas will lead to a significant increase in regulated charges in the coming years. „There is no alternative. Political considerations may dampen this increase, but that scenario would lead to insufficient investment and ultimately to a less stable and reliable grid,“ Tyleček noted. He acknowledged that energy will indeed become cheaper next year for many households.

Jiří Gavor, an analyst at ENA and executive director of the Association of Independent Energy Suppliers (ANDE), noted that next year is the final year of the current regulatory period. „The regulatory rules for 2026 to 2030 are still being finalized. But it is already clear that the regulated prices set now would not allow for the necessary development of the system and would lead to underfunding and restricted investment. I therefore expect necessary increases in the coming years,“ he said.

Lukáš Kaňok, head of the energy division at Kalkulátor.cz, noted that energy prices will fall on average next year, but not all customers will benefit from the reductions. „If the price of your electricity or gas has not come down on its own, you will pay more next year. Charges are higher than this year,“ he said. He said the price cuts would therefore apply to customers with open-ended contracts. „That means that even with prices falling, you are still paying significantly more than necessary. And I’m a little sorry that nobody is pointing this out,“ Kaňok added.

According to Petr Štajner of Greenbuddies, today’s announcement by the ERÚ is in line with expectations. He noted that most suppliers have cut prices several times this year, which will be reflected in customers’ final bills.