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CEZ does not know electricity prices for 2006 so far

15. 6. 2005

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CEZ does not know electricity prices for 2006 so far

Trade prices will result from market interaction of offer and demand in the whole region of Central Europe and will not be known until the contract period for next year, i. e. during August and September.

Meanwhile, prices on the foreign liquid markets increased by nearly 20 % last month. The first price signals in the CR for next year show, that domestic prices will probably rise as well, although not so dramatically. The first price impulses will be represented by the August auction of CEZ´s "virtual power plant", with an output of 400MW, which has been imposed by the Office of Fair Trading, and consequential wholesale auction of CEZ´s Duhova energie (Rainbow Energy), similarly to the past years. Already today, however, consumers are ordering electricity for 2006 directly from producers for prices that are higher than this year´s. "We must realize, that possible wholesale rise in prices will influence the prices for end customers only partially. For instance, trade prices make up only one third of the scale of prices for households, which, together with electricity, considers also transmission fees, distribution, modular services, renewable resources support and VAT," says Alan Svoboda, Director of Trade and Member of the Board of CEZ.

The rise in prices in Europe has been influenced by increasing shortage of electricity owing to a growing demand and successive closing of old resources. Foreign prices have been going up in the last months due to increasing insecurity of producers regarding conditions, under which new building and resources renewals will be possible. The trade prices of power electricity in the Czech Republic are the lowest in comparison with the neighbouring countries - Germany (18 % higher), Austria (18 % higher), Poland (15 % higher), Slovakia (10 % higher) and Hungary (22 % higher). Generally, the prices in foreign countris have risen by more than 100 % in the last 5 years, while the prices in the Czech Republic have remained at the 200´s level.

Ladislav Kriz, Press Officer, CEZ, a. s.