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End of Energy Ceilings: Impact on Czech Consumers and Businesses in 2022

Events: End of energy ceilings (source: ČT24)

Starting in the new year, the government’s price caps on both electricity and gas, which protected consumers from high bills, are falling. The Cabinet justifies this mainly by the long-term cheapening of energy. He adds that there is no room in the state budget for additional general subsidies.

The limits have protected millions of consumers this year. They could not pay more than six thousand crowns for electricity and three thousand crowns for gas per megawatt hour. Even after they end, most people shouldn’t pay more. Even so, it can be a complication for some consumers.

“If they leave it up to the supplier and unfortunately, for example, they fixed the price above the government ceiling last year, they will get back in full again,” emphasizes Jan Béreš, energy analyst of the Kalkulátor.cz server.

Some suppliers automatically transfer such clients to more favorable tariffs, but others do not. People should therefore check what their price is and when their contract ends. In some cases, it pays to terminate it despite the fine.

Increase in the regulated price component

The increase in the regulated price component will be reflected in invoices next year. Households will rise by two thirds. But overall, it represents a smaller part of the accounts.

“On average, most households should not have a significant increase in their family budget for energy, because the gradual decrease in these prices should compensate for the increase in the regulated component,” said Petr Švec, CEO of epet.cz.

In this way, only specific groups of customers will pay extra – typically those for whom the fixation of low electricity prices from before the start of the energy crisis ends next year.

The government will help energy-intensive companies next year. Those with high and very high voltage will waive part of the renewable energy charges. It should apply to less than 25,000 collection points. The state will spend 3.5 billion crowns in support.

“From medium-sized companies to the largest companies, it can be assumed that this is a saving in the millions to the lower hundreds of millions,” said Jan Rafaj, president of the Union of Industry and Transport of the Czech Republic.

The cabinet does not yet plan more aid – it would only consider it in the event of significant fluctuations in the energy market.

Energy prices on the wholesale markets have been falling for several months in a row. One megawatt-hour of electricity is currently traded for less than one hundred euros – that is, about two and a half thousand crowns. Last summer, it was tenfold for a short time.

It also makes gas cheaper. One megawatt-hour costs around 33 euros on the exchange – even that is ten times less than when prices were at their peak. According to analysts, energy prices should continue to decrease. That’s why they usually don’t recommend fixing contracts for too long now; they often coincide on the same year.

2023-12-29 19:41:05
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