The CEZ CEO, Martin Roman, said that the company expects electricity prices to continue increasing in the next five years in order to finance the USD 4bn plant investment program, as current prices are far below the costs of new power plants. Electricity prices should also be influenced by continued market liberalization, regulation for supporting electricity production from renewable sources and trading with emissions credits. Mr Roman added that should the government try to stop electricity price increases, the state would risk having to subsidize future power plant construction. The situation is similar in Germany as well. We regard the news as neutral as the market has been expecting further electricity price increase and the CEZ CEO did not provide any exact figures.
Source Bloomberg
Tomáš Gatěk, Patria Finance