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The Cost of Czech Electricity May Rise by 10% Next Year

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Electricity costs for Czech consumers could potentially rise next year, with a maximum increase of up to 10 percent. However, it is believed that any price hike will likely be moderate, and there is a possibility that prices might remain stable, albeit to a small extent. The main reason behind this potential price increase is the shifting of a portion of the fee for renewable energy sources back to consumers, effectively reversing the reduction in energy costs observed this year.

The government’s decision on Wednesday mandates that households and businesses will once again bear the renewable energy charge starting next year, as they did before October of the previous year. This year, the state fully covered these costs. Consequently, customers will again be required to pay a fee of CZK 599 for every megawatt-hour of electricity consumed. The cabinet argues that this is a universal measure not deemed necessary during times of more favorable energy prices.

Síkela remarked, “There is a possibility of a slight price increase, up to a maximum of 10 percent, but I anticipate it will be more moderate.” He disclosed that he did not support transferring the renewable energy levy to consumers and proposed alternative measures. Simultaneously, he acknowledged that the current system, where the state fully covered these fees this year, is no longer sustainable. The Energy Regulatory Office (ERO) estimates that the overall cost of supporting renewable energy in the coming year will be approximately CZK 36 billion.

In response to high energy prices, the state suspended the collection of these fees from the public from last October until the end of this year, with the state being the sole contributor. Prior to this measure, about half of the contributions were covered by the state, and the remaining half was borne by consumers.

Radim Fiala, deputy chairman of the opposition SPD party, criticized the decision to pass a portion of the renewable energy fee back to consumers. He argued that people would be forced to pay for something they never wanted and suggested that the government should use the profits from the excess profits tax next year to compensate consumers for expensive energy. He also cautioned that energy prices might rise again in the future, urging the government to be prepared to respond.

ANO deputy chairman Karel Havlicek, speaking on CNN Prima News’ Partie program, also criticized the government’s move. According to him, the government has been misleading about these charges since spring, claiming they would not be transferred to households again. Havlicek views this as Síkela’s loss.

Síkela explained that the state is expected to spend CZK 110 billion this year to address the energy crisis. In addition to the renewable energy levy, he mentioned the costs associated with price caps, which are set to expire at the end of this year.

Energy prices saw significant increases last year but have been declining this year. At the beginning of the year, nearly all energy suppliers offered services at the government’s price ceiling, set at CZK 6,000 per megawatt-hour (MWh) of electricity, including VAT, and CZK 3,000 per MWh of gas for this year. However, over the course of the year, most suppliers gradually introduced more affordable pricing options.

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