The Price Disparity: A European Overview

Czech consumers are facing some of the highest electricity prices in Europe, raising concerns about economic competitiveness and household affordability. The average Czech customer with normal consumption paid CZK 8.24 per kilowatt hour (kWh). This figure surpasses the EU average by more than a crown.

• Germany: Approaching CZK 10 per kWh.
• Poland: Approximately CZK 2 less than the Czech Republic.
• Slovakia: A significantly lower CZK 4.42 per kWh.
• Hungary: The most affordable electricity for households, at CZK 2.58 per kWh, according to European statistics.

Czech Republic’s Position: Second Highest in Europe

While the average consumption price is high, the actual cost of one kilowatt-hour in the Czech Republic has, at times, exceeded ten crowns, positioning it near the top of the European price scale.

• Cyprus: Follows closely with CZK 8.91 per kWh.
• Germany: Registers at CZK 8.80 per kWh.
• Poland: Shows a price of CZK 8.66 per kWh.
• Slovakia: Stands at CZK 5.52, nearly half the Czech price.
• Iceland: Offers the cheapest electricity at CZK 3.05 per kWh.

Price Increases: A Troubling Trend

Adding to the concern, the Czech Republic has experienced the second-highest year-on-year increase in electricity prices, at 11.8 percent. Portugal saw a higher increase, at 14.7 percent.

Eurostat attributes these increases to rising network costs and the gradual elimination of tax advantages and subsidies. Conversely,Austria recorded the most notable price decline,at 18.8 percent year-on-year.

The Impact of Fixed-Rate Contracts

Billing prices reflect a delay due to fixed-rate contracts established during periods of high prices. These contracts, frequently enough spanning two to three years, lock consumers into rates that may no longer reflect current market conditions.

Optimism on the horizon?

There is some optimism, tho. New contracts offered to customers last year featured more favorable prices, suggesting a potential betterment in the Czech republic’s competitive position.

I believe that the position of the Czech Republic will gradually improve, Gavor added. He noted that the power component of electricity prices, which constitutes about half of the final payment, has decreased faster in the Czech Republic than in neighboring countries. However, the regulated portion of the price increased significantly last year, by tens of percent.

State Intervention in Slovakia and Hungary

The low electricity prices in Slovakia and Hungary are attributed to state intervention, where prices are determined by the government, and the difference between the set price and the market price is subsidized from the budget.

That’s absolutely non -market intervention, Gavor stated, highlighting the artificial nature of these low prices.