Electricity prices on the stock exchange are reaching record highs, and energy companies must have several billion crowns a day ready to ensure stock exchange trading. For this reason, the largest electricity supplier ČEZ agreed with the state on Friday before last to borrow up to three billion euros (CZK 74 billion). Now other companies are also turning to the state.

According to Hospodářské noviny, the group is the Sev.en Energy group of entrepreneur Pavel Tykač and the EPH holding of billionaire Daniel Křetínský. The holding produces much less electricity in the Czech Republic than ČEZ, and most of its production is abroad.

The extreme increase is due to the ever-higher prices of electricity, gas, and emission allowances and is faced by all electricity producers.

Electricity on the stock exchange is seven times more expensive

According to the Kurzy.cz server, electricity on the stock exchange cost EUR 340 (about CZK 8,330) per megawatt-hour yesterday, while at the beginning of last year, it was around EUR 50, almost seven times less.

The government decided on the loan for ČEZ on 8 July. The money is intended to be used as a guarantee on the energy exchange, as the deposits, called margins, deposited on the exchanges are reaching record levels. The exchange requires deposits as protection for electricity traders.

It can be assumed that during the summer and autumn, when the pressure to replenish gas reservoirs across Europe will increase, the market will be even more sensitive to gas supply restrictions or interruptions,” said Daniel Beneš, CEO of ČEZ.

Electricity is traded on the exchange for various periods in advance. For example, ČEZ sells electricity three years ahead, and most of this year’s electricity is sold at prices significantly lower than the current ones. The difference in the then-current price and the current price on the exchange must be made daily by ČEZ in case it cannot deliver the electricity sold years ago.

Source