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CEZ was first in Europe to sell electricity on the European market for more than 40 EUR per MWh

13. 6. 2005

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CEZ was first in Europe to sell electricity on the European market for more than 40 EUR per MWh

The CEZ traders topped trade sections of other European power firms yesterday. CEZ used its flexibility and was the first power trader to sell power supply for next year for over 40 EUR per MWh on the German market. The volume of the deal totals roughly CZK 54m.

It was a sale that was negotiated by power market brokers. A broker is a mediator of a business transaction who connects both business partners online. CEZ managed to break the psychological limit of 40 MWh at 15:30:18, 9.6.2005. The average trade-price for this year was about 34 EUR/MWh on the German market. The prices for next year have already risen by 18 per cent and they are still increasing.

The prices in the Czech Republic are the lowest trade-prices in comparison with the neighbouring countries. This year´s trade-prices have increased by 10 % in Slovakia, 15 % in Poland, 18 % in Germany and Austria and even 22 % in Hungary.

As the Czech power market ranks among the most open ones in Europe and has a competitive environment, the price there depends on the development of European prices, especially in Germany.

Basically there are three reasons for the price increase rise in the price of electricity due to necessary rebuilding of plants throughout Europe, when the electricity price must correspond with the prices of current plants (the present prices have been based on the 30 and 40 years old prices), further there are unbundling costs (statutory separation of distribution and trade in connection with the rise of market environment) and higher costs of renewable resources support (higher redemption value of electricity from these resources and higher costs of grid operation).

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