Czech Ministry of Industry and Trade prepares state energy trader to boost security

The Ministry of Industry and Trade (MIT) is preparing to establish a state energy trader. It is intended primarily for purchasing gas and, potentially in the future, other forms of energy as well. Among other things, the aim of the state trader is to increase energy security and strengthen the state's influence over gas stocks in the Czech Republic. Industry and Trade Minister Jozef Síkela (STAN) told reporters today.

The state energy trader will be able to negotiate directly with European gas suppliers, which could allow the Czech Republic to buy gas at lower prices. The state trader is to purchase gas for the state's needs.

For example, at the government's instruction, the state has already purchased gas for the state material reserves for the first time. The authority bought 2.4 terawatt-hours (TWh) of gas for storage at a cost of CZK 8.5 billion. According to Síkela, gas in the material reserves is intended only for purposes decided by the state. In the future, he said, these stocks will form the basis for further measures that the Czech Republic will adopt not only to increase energy security, but also to make life easier for households. “We want to continue these purchases, but we want to do so systematically,” Síkela said.

At the end of April, Síkela issued an emergency measure stipulating that gas storage facilities must be at least 80% full before this year's heating season. According to data from Gas Infrastructure Europe (GIE), an association of European gas infrastructure operators, domestic storage facilities are currently around half full. Síkela said today that there are around 1.44 billion cubic metres of gas in storage, while their total capacity is 2.8 billion cubic metres. At this time last year, storage facilities in the Czech Republic were around 30% full, the data show.

For traders filling storage facilities, the MIT has prepared compensation to cover any potential difference between current high prices and potentially lower prices in the winter season. This is a step to motivate traders to fill storage facilities at present. Síkela said that the Czech Republic is among the countries filling storage facilities fastest in Europe. Only the Netherlands and Austria are faster on a per-capita basis, he said. A trader that does not use its storage capacity may lose it, Síkela said.

Gas storage facilities in the Czech Republic are also ready for 100% filling. The pace at which natural gas is injected into storage depends on customer requirements, namely gas traders. Simona Hladíková, spokesperson for RWE Gas Storage, the largest operator of underground gas storage facilities in the Czech Republic, told ČTK. Last year, at the beginning of October, storage levels fell below 90%, which was an exception compared with previous years, when storage facilities were filled to full capacity at the beginning of autumn.

The ministry is preparing to launch a call in July to support energy savings in businesses, with up to CZK 10 billion available. The MIT has also launched a call for the modernisation of district heating networks, under which it wants to distribute up to CZK 1.6 billion.