District heating in Czechia to cost more in 2027: how big the rise

Heating could get more expensive in 2027: households connected to district heating will pay more because wholesale gas prices have risen amid tensions in the Strait of Hormuz and Russia’s war in Ukraine. Analysts expect gas-fired heating plants to raise prices by about 15% on average, and by more than a quarter in the worst case.

Although the heating season has already begun, Czech gas storage is only 77% full. “There isn’t enough gas in Europe to ignore a harsh winter. If several weeks of severe frost hit Germany, Czechia and other countries at the same time, Europe will start competing hard for every additional delivery. The main tool in that competition will be price,” says Martin Pacovský, investment director at the Arete Energy fund.

What the increase depends on

What matters most is the price at which the heat producer or supplier secured gas for next year. According to Jan Vysloužil, chairman of the Union of Czech and Moravian Housing Cooperatives, the increase in some gas-supplied systems could be in double digits. But that is the bleakest scenario: “Elsewhere the price may change only slightly, or even fall.”

Jiří Gavor, an ENA analyst and executive director of the Association of Independent Energy Suppliers, explains that much depends on whether suppliers locked in gas at the favourable prices that prevailed on international markets until February this year. He estimates the usual increase in gas-based heat at 15%, but “for the unlucky ones who didn’t secure enough volume in advance, it could easily exceed a quarter.”

The worst off will be those who relied on current spot prices: they are already very high, and in the extreme case we are talking about multiples, though that should not be typical. The share of gas in the heat source also matters. Gavor named the Brno heating plant as an example: Brno is the largest city where gas dominates district heating, and in his view the 15% will be added there. Pavel Kaufmann, spokesman of the Heating Association, confirmed that gas-fired sources will not escape the increase, and that a rise is expected for heat made from coal as well, “although a considerably milder one.” More detailed data on heat prices next year will be available at the end of November, he said.

What it means in crowns

If a household’s current heating and hot-water costs are 25,000 CZK a year, a 10% increase would raise them by about 2,500 CZK, or around 208 CZK a month. At 20% the rise would be 5,000 CZK a year (417 a month), at 30% it would be 7,500 CZK (625 a month). Monthly costs in these scenarios would be 2,292, 2,500 and 2,708 CZK (calculation by the Union of Housing Cooperatives).

The actual impact, Vysloužil warns, depends on the supplier’s price, the building’s consumption and the way costs are allocated, and for individual flats also on the floor area counted and meter readings.

What buildings can do

Housing cooperatives and owners’ associations are used to reacting to changes in energy prices, but they cannot influence the price of the heat supplied. How prepared individual buildings are differs depending on their contract terms, the current level of advance payments and how soon the supplier announces the 2027 price. That is why, in Vysloužil’s view, suppliers should announce planned changes in good time and in clear terms, while buildings should adjust advance payments to reduce the risk of large back payments at the annual settlement, assess how economically the building is run and keep residents informed.

Gavor believes there is only one way to protect against excessive payments: keep up energy-saving programmes. When heat is more expensive, owners are easier to persuade to invest in insulation or new windows.

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Around Prague, based on reporting by denik.cz