Rising Energy Costs in the Czech Republic: A Concern for Households and Businesses

As a result of an increase in the regulated component of electricity prices, most households in the Czech Republic must brace themselves for higher electricity prices starting next year, according to analysts. This increase, however, will not be uniform across the country. For instance, in Prague, people will experience less of an increase in distribution costs and circuit breakers compared to other regions. Nonetheless, everyone will be affected by the return of the fee for renewable energy sources (POZE). Industry representatives warn that the increased prices could jeopardize the competitiveness of the Czech industry.

The Energy Regulatory Office (ERÚ) has proposed a significant increase in the regulated component of energy for the coming year. For households, the regulated part of electricity is expected to increase by 71 percent year-on-year, resulting in a price increase of approximately 1408 CZK per megawatt-hour (MWh), including VAT.

The regulated part of the electricity price for large consumers will see even more significant increases. On a high-voltage level, it will increase by 113 percent year-on-year, and on a very high-voltage level, it will increase by 206 percent. For gas, the rise in the regulated component should be somewhat lower. For households, the controlled part of gas should increase by about 39 percent year-on-year, meaning a price increase of about 125 CZK per MWh of gas.

According to Jiří Gavor, an analyst from the company ENA and the executive director of the Association of Independent Energy Suppliers (ANDE), most consumers will probably see an increase in their electricity bills next year. Customers whose electricity prices fell to around 3700 CZK per MWh during the year will return to prices at the level of the beginning of this year.

However, the Chamber of Commerce warns that energy costs will double or even triple for some manufacturing companies compared to this year. This sharp rise in the regulated components of energy prices not only undermines the fragile restart of the domestic economy but also threatens the current positions of Czech companies compared to firms in other European Union countries where energy prices will be lower.