The Czech government has approved plans to cap revenues of power companies in an attempt to ease the surge of soaring electricity prices on end consumers. The caps, which need to be approved by the Parliament, would be €70/MWh for nuclear power, €180/MWh for hydropower, wind, and solar, €230/MWh for lignite-fired power plants up to 140 MW (€170/MWh for those above 140 MW), and €240/MWh for gas-fired power generation; the State would take 90% of revenues above that cap. They would also apply to production based on forward contracts, since the national power utility CEZ has already pre-sold most of its power production for 2023 (pre-sale of 35 TWh of its expected 2023 delivery of 47-48 TWh as of late September, at an average price at €108/MWh, up from €90.5/MWh in mid 2022, and pre-sale of 2024 production at €120/MWh).
This revenue cap will add to a windfall tax on profits made by energy companies and large banks, that was already approved by the lower house of the Parliament and should enter into force in 2023 until 2025. The windfall tax is expected to raise at least CZK 100bn (€4bn).
CEZ is expected to be affected by the caps and windfall tax. The group has already announced that tariffs would increase as of January 2023 and most households are expected to have prices at the ceiling level. It also plans to increase the price of heat by around 20% in 2023.