Wholesale electricity price for 2007, which is expected to be announced today in the afternoon at press conference starting at 15:45 CET, should rise in the range of 10.8% to 17.1% y/y. Base load electricity forms c85% of CEZ’s output. CEZ set the maximum price at CZK 1,248/MWh ~ EUR 44.2/MWh, implying growth of 20% y/y. However together with base load, CEZ was auctioning other product, where the demand is lower and the increase is capped at 10.8% y/y.
Our view:
In our model we expect the wholesale electricity price to increase by 15% y/y to CZK 1,197/MWh ~ EUR 42.4. We believe that 15% y/y increase is already priced in, thus any result above this level would be positive.