Energy prices will be a big scare for companies and households in 2024. At the same time, the prices of power energy, which are determined by suppliers, have fallen significantly compared to their extreme increase from the second half of 2022. However, after the New Year, the second, so-called regulated component of the price will become more expensive. This is determined by the state through the Energy Regulatory Office (ERÚ). Due to its growth, households will have to pay 65.7 percent more for this part of the electricity price, and will therefore pay thousands of crowns in addition annually. In addition, the long-planned and repeatedly postponed ban on the operation of non-ecological boilers of the 1st and 2nd emission class should apply from September. Anyone who continues to use them can expect to be fined heavily. The diary provides answers to the most important related questions.
High energy prices will again plague the Czech Republic. See who will pay extra in 2024. | Photo: Shutterstock
Diary / Guide to the year 2024 Source: Diary How will the regulated part of the price of electricity and gas increase next year?
The regulated component of the price, which makes up about 40 percent of the final price of electricity for households, will increase by 65.7 percent from January. For one megawatt hour, customers will thus pay an additional 1,077 crowns. In the case of gas, the price for household customers will increase by 38.8 percent. The price for one megawatt hour will thus be approximately 125 crowns higher than before.
Why will the regulated component of energy prices increase so significantly?
In addition to the usual increase in the price for mediating the transport of energy from the supplier to the customer, i.e. for the use of the transmission system, high inflation is also reflected in the price. Temporary relief from the government will also end. It introduced them so that households could deal with the energy crisis caused by the consequences of Russia’s war in Ukraine. In addition, consumers will again have to pay fees for supported energy sources (POZE).
What are the fees for supported energy sources?
It is a subsidy – one of the forms of support for some operators of renewable energy sources, i.e. solar, wind and hydro power plants. In addition, the state also guarantees them buy-in prices if they deliver their produced electricity to the distribution system.
Do all renewable energy operators receive this support?
No, it only applies to some of them. “If you put a new one on the roof today photovoltaic power plant, you will no longer have guaranteed purchase prices and you will not receive any so-called green bonus,” explained Petr Woff, analyst of the CenyEnergie.cz portal.
So why does this money still have to be paid to some operators?
When they put their renewable energy sources into operation, the state guaranteed them this support by law.
Is the Czech Republic waiting for a shared energy boom?
Revolution in Czech energy. Experts expect a boom in electricity sharing
For what reason did the state temporarily cancel the payment of this fee?
This was due to the excessively high energy prices in 2022, the rocket growth of which households had to cope with quickly. The government therefore relieved people from paying this fee from October until the end of 2022 and throughout 2023, and paid the entire support for these energy sources from the state budget during this time.
Where can I find out how much money I have to pay to support renewable energy sources?
The electricity supplier states this in the invoice for the supplied energy. Specifically, it is part of the information on the distribution part of the electricity price. The POZE Payment section shows the amount of electricity consumed, the unit price for electricity and the exact amount charged for this item.
What are people to do who won’t have enough money to pay these fees?
According to Finance Minister Zbyňek Stanjura (ODS), families who would have existential problems because of this fee can use state social support, for example housing allowance.
Will these fees be reduced for households that switch to greener methods of heating?
No, only their consumption of electricity drawn from the distribution system plays a role here. Paradoxically, households that have replaced the previous non-ecological heating with an old coal-fired boiler with a new heat pump that is more environmentally friendly will pay more money for this fee than before. The heat pump needs more electricity to operate.
Heat pump installation Source: Shutterstock
How many crowns will an ordinary household have to pay extra for energy after the increase in the regulated price of energy?
On average, households use about three megawatt-hours of electricity per year, according to energy company data. In that case, they will pay about 3,232 crowns more for the regulated component of energy prices. For gas, the share of the regulated component in the total price is only about 20 percent, so the price will increase less.
How was the regulated component of the price supposed to rise under the officials’ original plan?
The authority initially announced that fees would increase by 71 percent. According to Stanislav Trávníček, chairman of the ERÚ Council, the state found savings of around four billion crowns. “The Energy Regulatory Office used all its options to limit the impact on customers in this extraordinary situation,” said Trávníček. He reminded that ERO is bound by law when determining price components.
How do economists evaluate ERO’s approach?
According to Trinity Bank Chief Economist Lukáš Kovanda, customer disapproval played a role in the adjustment. “It seems that the Energy Regulatory Office finally backed down from the original proposal, at least partially, due to the evident political pressure, which was triggered by the strong disillusionment of the public and the corporate sphere and the related social debate,” said Kovanda.
So who is likely to pay the most?
According to Jan Kadlec from the Woltair company, after the announced increase in prices, especially customers whose advantageous fixation from the period before autumn 2021 will end may find themselves above the previously capped energy prices after the New Year. “The positive news is that this development is fueled by investments in energy-saving measures,” said Kadlec. With the growth of final prices, the return on investments in photovoltaics or heat pumps accelerates.
Electricity prices to rise in 2024 Source: Shutterstock
What do analysts think about ERO’s decision?
Officials say the rise in the regulated component of electricity will offset for many households the decline in the commercial component of the price offered by suppliers. “Ultimately, the average price of electricity supply for this largest group of households will practically not change,” ERO states in a press release. Experts aren’t sure. “However, if we count on the suppliers’ current price lists, the price increase will reach 15 to 23 percent, depending on the distribution area, the rate and the product,” argues Tomáš Vrňák, energy analyst of the Ušetřeno.cz portal.
How is the price of electricity likely to develop in the coming years?
According to economist Lukáš Kovanda, Czechs will have to get used to more expensive energy. He expects that the environmental activities of the European Union under the banner of the Green Deal will lead to this. Kovanda points out that the European plan can only work if the price of energy from non-renewable sources is significantly increased. In addition, for its success, other major global environmental polluters, including China, would have to join efforts to end the energy use of coal. “In short, Brussels has taken a big gamble with the fate of future generations of EU residents, who may lose not only a substantial part of their standard of living,” Kovanda fears.
How will the rules for operating boilers change?
From September 1, 2024, the long-awaited and then postponed ban on heating in non-ecological boilers of the 1st and 2nd emission classes will enter into force. It should have started to apply two years ago, but the state postponed its validity by two years also due to difficulties in the energy sector caused by the consequences of the Russian war in Ukraine. In the summer, the Ministry of the Environment estimated that there could be approximately 150,000 such boilers in the Czech Republic.
What will be the threat to people who would continue to heat in unsuitable boilers?
Anyone who does not replace such a boiler with a new one in time, for example for burning biomass or a heat pump, can expect a heavy fine. In that case, municipal authorities with extended powers can impose a fine of up to 50,000 crowns for violating the law. If they did not replace the boiler even after that, the officials could impose this sanction on them repeatedly.
The use of a heat pump will also become more expensive in 2024:
Pump heating costs up to a quarter. The office will moderate the price increase only symbolically
What should families do who don’t have enough money for an expensive boiler replacement?
One of the solutions is the use of a subsidy from the New Green Savings program. According to the current rules, they can replace non-ecological solid fuel boilers of lower than 3rd class, heating oil boilers and local heaters (stones) used as the main source of heat for a biomass boiler or heat pump, and replace gas boilers older than 20 years or electric heating draw subsidies of up to 140,000 crowns for the heat pump.
Isn’t it likely that the ban on these boilers would be pushed back again?
According to the director of the State Environmental Fund, Peter Valdman, nothing of the sort is expected. “The ban on the use of non-ecological boilers will come into force in September, nothing will change. The oldest solid fuel boilers pose the greatest risk to the health of residents. The implemented legislative shift of the ban responded to the effects of the energy crisis, created sufficient time for their replacements, and we see no reason for a further shift,” said Valdman.
2024-01-02 18:00:39
#price #energy #rise #pays
