Enormous demand for electricity in wholesale campaign, CEZ will have to cut customers' requirements, they exceed its generation capacity

Total year-on-year increase in wholesale prices is 16.87 %. Baseload price in the second auction is 19.5 % higher. Thanks to the offer of other products for pre-determined prices, the final average price increase is by 2.6 % lower, i.e. 16,87 %. The first auction of the CEZ's generation- the virtuall power plant - held in the beginning of August generated prices on the level of 17.1 % year-on-year increase.

The demand in the auction for annual baseload exceeded the offer almost 5times. The participants in the auction of this internationally traded product determined the price at 1,244 CZK/MWh (44.15 EUR/MWh), which represented a year-on-year increase by 19.5 %. This price is in conformity with the development of the electricity markets, prices rose in Slovakia and Hungary as well.

Demand for other products (quarterly, monthly or weekly supplies) was almost 7times higher compared to the previous year. The prices for these products set by CEZ were ceiling prices with an average rise of 10.8 %.

The average consumption in the CzechRepublic diagram will then show total wholesale prices increase of 16.87 %, i. e. other products with ceiling prices lowered the average year-on-year increase by 2.6 %.

The volume of electricity which is being demanded by our customers proves high competitiveness of CEZ Power Company´s offer. However high demand we expected from traders, because hunger for electricity is growing every day, the reality was surprising for us as well. With regard to the extent of the demand, we are not able to meet all requirements andin conformity with determined conditions of the campaign,we will have to cut them. That applies to the products with fixed ceiling prices where possible reductions of requirements were a part of the campaign conditions, said Alan Svoboda, Chief Sales and Trading Officer of CEZ and added: The final structure of accepted individual demands will be announced on Monday (September 4^th), however final price will not change.

The demand totalled to 32.7 TWh (20.2 TWh in the auction for baseload and 12.5 TWh for other products), which represents 36 TWh if combined with the Virtual Power Plant auction. The campaign was attended by 23 companies in total, out of which 22 entered the auction for base load and 19 the second part (sale of other products).

The wholesale prices increase is lower than at foreign exchanges. Traders andcustomers will henceforth take advantage of this disproportion in the prices in the CzechRepublic and prices in the neighbouring countries that are between 44 and 45 EUR /MWh in Slovakia and from 48 to 50 EUR / MWh in Hungary.

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

30. 8. 2006