What to expect from Czech electricity and gas prices in 2025? TEDOM energie’s view

Three years have passed since the collapse of Bohemia Energy, one of the largest energy suppliers. For hundreds of thousands of customers who opted for three-year fixed-price contracts at the time, a crucial decision-making moment is now approaching. At the same time, a considerable period has passed since the 2021 energy crisis, but the market still bears its after-effects. This is compounded by growing pressure on the regulated component of the electricity price due to the necessary infrastructure investments, affecting costs for households and businesses.

What will be the development of the energy commodities market in 2025, and what will it bring to customers? We asked several electricity and gas suppliers.

This is the first part of an interview with Jakub Odložilík, head of TEDOM energie. 

What factors do you believe will have the greatest impact on electricity and gas prices in 2025?

I will be completely honest. More has happened in the energy sector in recent years than in the preceding decade. So even the greatest experts today do not make forecasts lightly. After all, everything can change very quickly. There are a great many factors currently shaping commodity prices, and they often operate entirely independently of one another. But if I had to guess:

In the case of gas, geopolitical factors will have the greatest influence on prices. Its price will most likely rise again, but much will depend on the volumes purchased from Russia and, more generally, on developments in the Russia-Ukraine war. In my view, electricity will become more expensive chiefly due to rising network maintenance costs and the fact that Czechia is not moving forward in energy legislation as quickly as it should.

On the other hand, lower prices may result from working with new technologies, self-generation of energy, or operating facilities not only for electricity generation but also, for example, for grid balancing services.

Naturally, all forecasts apply only provided that none of the current global conflicts escalates. Conversely, de-escalation would certainly have a very positive effect. In such a case, not so much on prices as on lower volatility in energy markets.

How do you see the long-term development of electricity and gas prices? Do you expect a return to pre-crisis levels, or rather lasting changes in the price structure?

For gas, much will depend on geopolitical developments. There is certainly some chance that prices will come to their senses and fall. But I do not expect pre-COVID prices, and I think they will never return. Even after the war between Ukraine and Russia, the situation will not return to its pre-war state. Mutual geopolitical relations will play a fundamental role in further shaping the market and strategies for natural gas.

For electricity, we can expect a slow rise in the total price. From next year onwards, the so-called distribution component is likely to increase as part of reserved capacity charges – that is, without any link to actual consumption. Even if the commodity price falls, which can certainly be expected to some extent, this measure will be increasingly reflected in bills.

Would you currently recommend that customers fix their energy prices?

I am a fan of spot prices and short-term fixed contracts. So if someone is a bit of a “player” and does not mind learning about energy, spot prices and short-term fixed contracts are always more advantageous for them in the long run. Smart meters, which make it possible to manage both electricity consumption and generation better, are now also being brought back into play by legislation for ordinary households.

As recently as summer 2024, I advised conservative consumers to fix prices for two or three years. Now, however, I would recommend waiting until spring and then deciding based on the situation. It was precisely for this period that we developed the “Certainty for winter” product, which will help bridge the remaining months until spring.

The Czech market is very specific, also given the predatory activities of some major players, so it is genuinely difficult to estimate the development of offers that are often not even based on real economics. But I expect that, with the end of the windfall tax, the obvious absurdities in suppliers’ customer-retention activities will also end, and the market will return to economic logic.

Spring and summer 2025 may be suitable for a longer-term fixed contract, especially if conflicts gradually de-escalate and the global situation develops more stably.

How do you ensure sufficient supplies of gas and electricity? Can you outline your procurement process?

Our role is simple – energy suppliers act as intermediaries between wholesale markets and end customers. Energy is purchased primarily on specialised energy exchanges, such as the European EEX (European Energy Exchange) or Czech OTE (Electricity Market Operator). It is also purchased through bilateral commodity purchase agreements governed by European legislation, known as EFET contracts.

Our traders enter into contracts for electricity or gas supplies. These contracts can be short-term (spot) contracts for immediate delivery or long-term (futures) contracts for delivery in the future.

Some suppliers also enter into bilateral agreements directly with energy producers, such as power plants, to secure stable supplies. In addition to this route, we are developing our own models, under which we operate partner photovoltaic power plants, for example in the form of PPAs. Renewables purchased directly from local providers already account for around 12 % of our mix, and this share is continuing to grow.

Accurate demand forecasting is crucial for successful trading. Advanced algorithms are used for this purpose. Relying on historical data is very difficult today, because the past few years have truly been a wild ride. So AI is also increasingly coming into use. What would help Czechia most by far would be the installation of “smart meters” with completely accurate consumption data, but we are desperately lagging behind in this area. Ultimately, this also makes the price for end customers more expensive.

The physical distribution of energy is the task of regional distribution system operators. They ensure the physical transmission of electricity and gas through networks to end customers. Their activities are regulated by the state and separated from energy suppliers’ commercial operations. Suppliers pay distributors fees for using these networks, which are subsequently reflected in the total price for customers.

How do you differ from other suppliers on the market? Do you offer customers any additional benefits that could increase their satisfaction or deliver savings?

TEDOM is built on three main principles.

We are always open and fair with customers. We try to talk about energy in completely plain language and without fine print. I have no problem telling anyone: “I’m sorry, but there are currently better offers than ours.” We simply believe in long-term partnerships, and that means always speaking as equals. Our goal is to have informed customers who know why it is advantageous to be with us.

The second pillar is customer communication. We want customers to have a single contact with us for everything related to energy. Whenever they need anything, they only need to save one number, and a real person will answer the phone. And a professional at that, because our customer-facing colleagues have many years of experience in energy and genuinely understand the issues. We do not use any robots or automated systems in customer service.

And then the most important thing – products. We are not afraid to design them in the way we ourselves would want them for our own families. We are pioneers of short-term tariffs with a commitment of just one month. We were the first to introduce the “Certainty for winter” tariff, which helps bridge the most turbulent period of the year. And we want to continue expanding our offering. For spring, we are preparing another great product that has never been available here before, and we will be the first to bring it to market.