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Business News: Czech consumers can look forward to cheaper electricity prices, Paskov mine facing closure after government refuses bailout, Czech Photovoltaic Association may challenge the law restricting support for renewable energy sources and 2014 draft budget projects public spending gap below 3 percent of GDP.
Czech consumers to pay less for electricity supplies
The Czech Republic’s biggest energy company CEZ has announced it will cut the price of baseload electricity in its most used tariff by 15 percent as of January, 2014. Rival suppliers such as Pražská energetika and E.ON have also confirmed planned cuts and will make public their price lists in November. Baseload electricity accounts for about 45 percent of the final electricity price. The rest is made up of regulated components such as the distribution fee and renewable energy surcharge. The price of these regulated components is set by the Energy Regulatory Office which is yet to make known the price list for 2014.
Finance minister proposes budget with 112 billion deficit
Czech Finance Minister Jan Fischer has proposed a 2014 draft state budget with a deficit of 112 billion crowns and a projected gap in public spending below 3 percent of GDP. The draft budget is based on growth expectations of 1.3 percent next year, which would bring an additional four to five billion crowns in tax revenues to state coffers. The government is to vote on the proposal next week.
Paskov mine facing closure
The Czech government has refused to buy, operate or subsidise the Paskov coal mine that owner New World Resources plans to close down on the grounds that it is highly unprofitable. The mine, run by NWR subsidiary OKD, employs some 3,000 people in a region already suffering from high unemployment and its owners said earlier they were ready to postpone its closure by 4 years if they received financial assistance from the state. PM Rusnok said the government would not spend money bailing out a private company and would instead focus on ways of creating new jobs and providing requalification courses to the growing number of jobless in the region. OKD expects some 1,200 people to lose their jobs as a result of the closure at the end of 2014. Some of the 2,500 miners working at Paskov will be transferred to other operations. The Ostrava region currently has 100,000 unemployed.
Photovoltaic Association may challenge law restricting support for renewable energy sources
The Czech Photovoltaic Association is thinking about challenging the law restricting support for renewable energy sources as of 2014 in court. The association’s lawyer Klára Samková says the law discriminates photovoltaic plants compared with the other electricity producers. The law, signed by the president this week, sets a ceiling for renewable energy support at Kc 495 per megawatt hour as of next year, down from Kc 583 this year. Companies complain that the high support for renewable energy sources is endangering the competitiveness of the Czech industry. The police are currently also investigating claims that entrepreneurs in the solar business sector abused the generous state subsidies, artificially upping the prices of solar energy.
EP Energy expands
The Czech firm EP Energy, a subsidiary of the energy and industry group Energetický a průmyslový holding, has bought the coal-fired power plant Buschhaus and adjacent brown-coal mine Schoeningen in Lower Saxony from Germany's E.ON, company spokesman Daniel Častvaj confirmed this week. After the acquisition of Buschhaus, the total output of EP Energy's power plants in Germany will increase to 900 MW. Buschhaus generates around 2.5 billion kWh of electricity annually. EP Energy is active in particular in the Czech Republic and Germany and to a smaller extent also in Slovakia. In 2012, it was the biggest thermal energy supplier in the Czech Republic and the second biggest domestic power producer.