Sokolovská uhelná will raise heat prices, mainly due to the price of emission allowances

Sokolovská uhelná will increase the price of heat produced at the Vřesová combine and the Tisová power plant in 2024. The price increase is expected to be 20 to 25 percent. In a press release today, the company justified the increase mainly by the price of emission allowances, which currently account for more than 50 percent of the cost of heat production. Sokolovská uhelná is the largest producer of heat in the Karlovy Vary Region and supplies Karlovy Vary and its surroundings, Sokolov, Nové Sedlo, Chodov, as well as Bukovany, Citice and Březová.

According to the company, even after the increase in price, the price of heat from coal will remain lower than heat produced, for example, from natural gas. Sokolovská uhelná, as well as Elektrárna Tisová, which belongs to the company, have not changed their heat prices significantly in the last two years, but the company believes an increase is necessary for next year. This is mainly due to the rising costs of emission permits, an expected increase in the fee on extracted minerals and other costs that the state is burdened with for the heat produced.

"In 2022 and 2023, we tried to bear most of the costs of heat production and supply, which means that the price of heat did not cover the actual increase in costs. However, given the current situation, this is an unsustainable process, so we will not avoid changing the price for our contractors for whom we produce and supply heat. This is primarily due to the cost of the emission allowance, which accounts for more than 50 percent of the price of heat production before it is passed on for distribution to end consumers," said Pavel Tomek, chairman of the supervisory boards of both Sokolovská uhelná and Elektrárna Tisová.

The processes associated with coal extraction, including human labour costs, now make up a smaller part of the price. It also includes the costs of maintenance and management of mining technology, investments in coal resources, dispatching and, last but not least, the increase in the fee on extracted minerals, which the company pays to the state. The final price of heat for end customers, mostly households, is set by municipal heating companies and heat management companies.

For example, the municipal company Sokolovská bytová is supplying heat to households this year for CZK 803 per gigajoule, including VAT. Compared to 2022, the price has increased by 15 percent, i.e. by CZK 97. A typical household consumes 25 to 35 GJ of heat annually. At this year's prices, this represents roughly CZK 20,000 to 28,000 annually. If the local distributors also include the full price increase from Sokolovská uhelná in the final price for customers, this would mean, for example in Sokolov, that the price of heat for next year will approach or exceed CZK 1,000 per GJ, i.e. the annual household costs will rise to CZK 25,000 to 35,000 for heat and hot water. However, the final price has not yet been announced by Sokolovská bytová.

Sokolovská uhelná and its subsidiary Elektrárna Tisová produce heat and supply it to distributors, which include KAREL HOLOUBEK - Trade Group, a spin-off of Teplárna Karlovy Vary, Sokolovská bytová, Teplo Chodov, Služby města Březová, TEBYT Bukovany and Citice, HATESPO in Habartov and Novosedelská bytová.

"We are gradually communicating with all of them about the price increase and specifying its final form for 2024. We are trying to explain the reasons for the increase, which we can substantiate with all the data. The final price for customers will not only be affected by the increase in the cost of heat production and supply, but also by the cost of operating the heat distribution system, which will be included directly by the distributors. However, the price of production and supply of heat from lignite remains one third cheaper than the price of heat production from gas," Tomek added.

Within Sokolovská uhelná, the Tisová power plant and the complex in Vřesová supply heat to distributors in the Sokolov and Karlovy Vary regions. Annually, they supply about 2.2 million GJ of heat to the public grid, the total volume of heat sold.

Source: Sokolovská uhelná and CTK