Stanjura: Czechia cannot compete with Germany on energy subsidies

Czechia cannot enter a subsidy race with Germany over high energy prices, as it would lose given the size of its economy. Finance Minister Zbyněk Stanjura (ODS) told journalists today. He also said Czech companies have other support options besides across-the-board compensation for higher energy prices. The German government announced on Thursday that it would provide its industry with relief of up to 12 billion euros (more than 295 billion crowns) due to high electricity prices.

„If we allow a subsidy race, we will lose to Germany, Europe’s wealthiest economy. Our goal is to reduce the level of subsidies across Europe, because they favour the wealthiest economies,“ Stanjura said.

„It is fair to take all forms of support received by energy-intensive operations and compare them internationally. For example, here it is possible to receive subsidies from the Modernisation Fund, worth tens of billions of crowns. Germany does not have that,“ the minister added.

According to him, the government is not planning to change its position and will continue to pay, on behalf of consumers, the costs of renewable electricity sources and distribution. The minister said this would require taking around 50 billion crowns from other budget chapters, which he sees no room for given the experience of the debate over the state budget. Stanjura also expressed confidence that the Energy Regulatory Office (ERÚ) would further moderate the planned increase in the regulated component of energy prices.

Under the ERÚ’s initial proposal, the regulated component of electricity prices for households would rise by 71 percent year on year. The increase would be even sharper for large consumers: 113 percent year on year at the high-voltage level and 206 percent at the very-high-voltage level. ERÚ will present the final form of the regulated component of energy prices at the end of November.

Stanjura today also rejected the possibility of covering the fee for renewable energy sources from revenues from emission allowances. According to him, around half of the 80 billion crowns raised by the allowances is already included in state budget revenues. The other half is earmarked for new investments in green technologies and cannot be used to cover payments for renewable energy installations built in 2009 and 2010.

According to the minister, low-income households affected by higher electricity prices can claim a housing allowance. He considers this targeted form of support more effective than funding energy costs across the board for all consumers.