Sokolovská Uhelná to Increase Heat Prices

Sokolovská Uhelná, a significant heat production company in the Czech Republic, has announced a price increase for heat produced at Vřesová and the Tisová power plant. This increase, expected to take effect in 2024, will see prices rise by 20 to 25 percent. According to a press release, the company attributes the increase primarily to the cost of emission permits, which currently make up more than 50 percent of heat production costs.

Despite the price increase, Sokolovská Uhelná claims that the cost of coal-generated heat will remain lower than heat produced from other sources, such as natural gas. The company owns the Tisová power plant and has not significantly altered heat prices in the past two years. However, escalating costs of emission permits, expected increases in the fee for mined minerals, and other costs associated with state-imposed burdens on heat production necessitate an increase for the coming year.

In 2022 and 2023, the company endeavored to bear the majority of production and supply costs, which meant that heat prices did not cover the actual cost increase. However, the current situation has made this unsustainable. The primary cause of the price change is the cost of emission permits, which make up more than 50 percent of the price of heat production before it is passed on to distribution to end consumers.

Processes associated with coal mining, including labor costs, now constitute a smaller portion of the price. This also includes maintenance costs, the management of mining technology, investments in coal sources, dispatching, and the increase in the fee for mined minerals paid to the state. For end-users — most commonly households — the final price of heat is set by city or municipal heating plants and companies operating the heating industry.

For instance, this year, the city company Sokolovská Bytová supplies households with heat for 803 koruna per gigajoule, including VAT. Compared to 2022, the price has increased by 15 percent, or 97 koruna. If local distributors fully incorporate the price increase from Sokolovská Uhelná into the final cost for customers, this would mean, for example, in Sokolov, that the price of heat for the next year would approach or exceed 1000 koruna per GJ. Thus, household costs would rise from 25,000 to 35,000 koruna for heat and hot water.

In conclusion, Sokolovská Uhelná and its subsidiary company, Elektrárna Tisová, produce heat and supply it to distributors. The company is communicating with all distributors about the price increase and clarifying its final form for 2024, attempting to explain the reasons for the rise, which can be documented with all data. The final price for customers will be influenced not only by the increase in production and supply of heat but also by the costs of operating the heat distribution system, which distributors will include directly. Despite the price increase, the cost of production and supply of heat from brown coal remains one-third cheaper than that of heat from gas.