According to Reuters, CEZ is expected to receive 34.3m tons of CO2 credits annually for NAP II (2008-2012) implying 7% decrease compare to 36.9m tons that CEZ received for NAP I (2005-2007).
We see the news as slightly negative as CEZ will have to buy extra CO2 credits on the market. Although the current price of CO2 credits for NAP II. is EUR 23.0 per ton, CEZ has been expecting this price increase and has been buying CO2 credits since February. We expect that on average CEZ has to buy approximately 3m tons of CO2 credits annually in the 2008-2012. The extra cost of buying CO2 credits will be partially offset by increasing electricity prices as CO2 costs are one of its drivers.