Many Czech households will pay up to several hundred crowns more per month for heat next year

Many households in the Czech Republic connected to district heating will pay up to several hundred crowns more per month for heat next year. Martin Hájek, director of the Czech Heating Association, told the ČTK news agency. Prices are set to rise mainly at coal-fired heating plants, which will increase them by as much as tens of percent. Heat prices at gas-fired heating plants are expected to change only slightly or remain the same. Even so, coal-fired heat will continue to be cheaper, although the gap will narrow significantly compared with this year. Heat from biomass boiler plants using renewable sources is also expected to become slightly more expensive.

Coal-fired heating plants account for around 50 percent of heat supplied to households and other customers, excluding industry. Gas-fired heat accounts for around 30 percent, while the remaining 20 percent comes from biomass and other sources.

Price increases will vary across the country. According to Hájek, coal-fired plants will raise prices by between six and almost 30 percent. „The steepest increases are at plants that have not yet fully reflected their higher costs in prices, either last year or this year, and have covered them using high electricity prices and savings. Heating plants usually produce both electricity and heat, so they had the opportunity to partly offset the increase with revenue from electricity prices. But the wholesale price of electricity has fallen significantly. While that is good news for consumers, it also reduces the ability to stabilise heat prices at heating plants,“ Hájek explained. However, he said, prices at the plants with the largest increases will not exceed the average price at the start of this year.

So-called biomass boiler plants and other sources that use mostly fuels other than coal and natural gas are also likely to raise prices. According to the association, their prices are generally expected to rise by no more than the rate of inflation, which the Czech National Bank forecasts will reach 10.8 percent this year.

The situation is more complicated at gas-fired heating plants. According to the association, they had originally planned to gradually lower prices in response to falling gas prices on the market, and some began doing so this year. However, after regulated gas distribution prices were raised by more than 40 percent, those plans are now unlikely to go ahead. Most gas-fired heating plants are now expected to raise heat prices for end customers by the amount of the higher VAT, which will increase by two percent next year. Some, by contrast, may see a slight price decrease.

„Most gas-fired heating plants should nevertheless have lower prices than at the start of this year. There will, however, be exceptions among plants that had fixed their gas prices for a long period and whose contracts expire at the end of this year,“ Hájek warned.

He added that, given the sharp fluctuations in the gas market, significant differences in the movement of prices for heat produced from gas are likely to persist next year.

According to the association, several factors have affected heat prices. In addition to the VAT increase, these include higher regulated energy prices, the cancellation of state subsidies worth 17 billion crowns, and rising prices for emission allowances. The decline in heat consumption from district heating plants in Czechia has also played a role. Last year, it fell by 12 percent year on year. A total of 74 petajoules (PJ) of heat was consumed, the lowest amount in the past six years.

Some companies have already announced price increases for next year. For example, Pražská teplárenská will raise heat prices for households by six percent, while Tepelné hospodářství Hradec Králové will increase them by 27.3 percent. Price rises have also been announced in České Budějovice and Jablonec nad Nisou.