Spot electricity prices rise by half. Households on monthly and spot tariffs will pay more

Spot electricity prices on the Czech spot market rose substantially in November. The weighted average price increased by almost half compared with the previous month, reaching 138 EUR/MWh. This is by far the highest monthly price this year. Electricity prices are responding to uncertainty on global commodity markets, particularly for natural gas.

With winter approaching, Europe’s energy sector is once again showing how vulnerable it can still be. Several negative developments affecting the wholesale price of natural gas were followed by a rise in electricity prices.

The full November energy report, which also includes monthly spot prices, is available HERE.

The current uncertainty is clearly visible in the day-ahead electricity market. In November this year, the average price on this market settled at 138 EUR/MWh. Just a month earlier, the average price stood at 93 EUR/MWh.

The trend has so far continued into December this year. Over the first five days of December, the price was as high as 157 EUR/MWh.

Several factors are behind the increase in electricity prices. The first is the lack of wind that affected Germany and Western Europe in the first half of November. As a result, electricity prices on spot markets climbed as high as 800 EUR/MWh. The second factor is a relatively colder November, which led to an increase in natural gas prices. This effect was then also reflected in electricity prices.

This is also linked to the relatively rapid drawdown of natural gas stocks in storage facilities, both in the Czech Republic and across the European Union. Gas storage levels in the European Union currently stand at only around 84 %. With the exception of the crisis year 2021, when storage facilities were only 66 % full on the same date, this is the lowest level in the past 6 years.

One of the main factors currently feeding into electricity prices is uncertainty over future supplies of natural gas from Russia. In recent weeks, Gazprom announced a halt to supplies to Austrian company OMV, while the United States imposed sanctions on Russia’s Gazprombank, through which payments for Russian gas supplies to Europe are made.

It is also still uncertain whether gas transit through Ukraine will continue after the New Year and, if so, under what terms. The situation is not helped by LNG supplies that have remained lower throughout the year than last year.

Electricity will become more expensive for households on spot tariffs and monthly fixed-price contracts

High prices on short-term markets are gradually feeding through into household prices as well. Customers purchasing electricity on spot tariffs are already seeing the higher price.

Higher prices on short-term markets are also gradually being reflected in monthly fixed-price tariffs. For example, prices for monthly fixed-price contracts for January already substantially exceed those under long-term fixed-price contracts.

Monthly fixed-price contracts are currently offered by Centropol, Pražská plynárenská and Bidli energie, for example. January prices from these suppliers currently range from 3550 Kč/MWh excluding VAT to 4110 Kč/MWh excluding VAT.

Larger suppliers are still offering fixed-price contracts at between 2500 Kč - 3000 Kč/MWh excluding VAT. The cheapest offer is available at around 2500 Kč/MWh excluding VAT with a two-year fixed-price contract.

Supplier offers as of 2024-11-18