Fiala: Czech electricity prices to rise by no more than a few percent next year

Final electricity prices will rise by no more than a few percent next year compared with this year, Prime Minister Petr Fiala (ODS) said at a press conference today. He noted that electricity prices offered by suppliers on the market are gradually falling. Fiala said there was therefore no risk of prices rising by tens of percent. He also acknowledged that the Energy Regulatory Office (ERÚ) proposal could still be revised.

Current household electricity prices from the largest suppliers can be tracked in our electricity price comparison.

Energy prices consist of a commercial component set by suppliers and a regulated component administered by the state. The regulated component of electricity is expected to make up about 40 percent of the final price for households next year, while its share for gas is around 20 percent. For large consumers, the regulated component accounts for a smaller share of the final electricity price.

The ERÚ has proposed a significant increase in the regulated component of energy prices next year. Under the proposal, the regulated component of household electricity prices would rise by 71 percent year on year, increasing prices by an average of about CZK 1,408 per megawatt-hour (MWh), including VAT. The regulated component of electricity prices for large consumers would rise even more sharply: by 113 percent at the high-voltage level and by 206 percent at the very-high-voltage level. The increase in the regulated component for gas is expected to be somewhat lower. For households, the regulated component of gas prices would rise by about 39 percent year on year, meaning an increase of roughly CZK 125 per MWh of gas. For large consumers, the increase would be 42.5 percent. The ERÚ will announce the final regulated components of energy prices at the end of November.

“For the vast majority, energy prices will remain roughly at the same level as this year, or rise by no more than a few percent,” Fiala said.

The prime minister discussed energy prices in the afternoon with representatives of business and industry associations, who said preliminary estimates based on an analysis of the ERÚ proposal suggested that energy costs could rise as much as threefold for some industrial companies. “We agreed that the regulated component of energy prices could perhaps be lower still than in the current proposal from the Energy Regulatory Office,” Fiala added.

The prime minister also rejected criticism from the opposition today. He said previous governments bore significant responsibility for the country’s current energy situation. “If they had looked after the country’s energy security and built new sources of energy, we would not be in the situation we are in today,” he said. In his view, the current situation will last for at least the next few years.

Minister of Industry and Trade Jozef Síkela (STAN) noted that the main reason for the increase in the regulated component of energy prices is that the state subsidised it this year to the tune of around CZK 110 billion. This mainly covered compensation for price caps, payments for renewable energy sources and the cost of system services. Síkela also noted that gas prices are expected to be lower next year than this year.

The opposition criticised the ERÚ proposal today. According to Jan Hrnčíř (SPD), deputy chair of the Chamber of Deputies’ Budget Committee, the proposal would cost an average household an additional CZK 5,000 to 6,000 a year. Karel Havlíček, first deputy chair of ANO and a former minister of industry, trade and transport, said the proposal would have a major impact on businesses and a devastating one on energy-intensive operations.

According to analysts, most consumers in Czechia will pay more for electricity next year than they did at the start of this year, because of the planned increase in the regulated component of electricity prices. The size of the increase will depend on how commercial electricity prices develop. By contrast, gas consumers are expected to save money compared with the beginning of this year. Business and industry associations say preliminary estimates suggest energy costs could rise as much as threefold for some industrial companies. They are therefore concerned that the competitiveness of domestic industry will weaken, inflation could pick up again and prices—including food prices—could rise.