Prague National Museum. Credit: KK / BD.

City of Prague Saved Tens of Millions of Crowns On Energy Purchases In First Half of 2023

Prague City Hall has evaluated the functioning of the municipal company Prague Technology (THMP) as a supplier of electricity and gas in the first half of 2023. The company successfully secured the purchase of electricity and gas at a much favourable price, for both the first half of the year, but also for the second, where it is announcing more savings. In total, the city could save more than CK 100 million for the whole year. Based on the favourable balance of financial savings this year, Mayor Bohuslav Svoboda and the THMP management will present to the City Council the city’s strategy for securing electricity and gas for the following years as well.

In addition to securing favourable prices by purchasing in time, Prague will monitor energy security in the following years, i.e. securing 100% of the required amount of electricity and gas always before the relevant consumption year, for purchasing through transparent and open tenders. For this, it will use the available energy data to optimise the amount of energy purchased. THMP has been a licensed trader on the energy markets since last year, when it started providing energy supplies first for the public lighting network, then also for Prague City Hall, the Prague City Police, and approximately 200 other municipal organisations, including theatres, swimming pools, schools, sports grounds, and social service organisations.

“I see the advantage of efficient energy purchasing as positive for at least two reasons. The main one is of course saving, that’s for sure. And then there is the issue of energy security, or security of supply even in bad times,” said Svoboda.

The cumulative estimated savings achieved for the first half of 2023 by the supply of electricity and gas from THMP at spot prices is approximately the amount of the set price ceiling. In the second half of 2023, the total savings will be even more significant, due to the increase in the volume of secured deliveries and the development of market prices, as well as the highly competitive conditions leading to a reduction of the price markup over the spot market for this period.

“Purchasing and securing energy for the capital and its organisations is one of the tasks faced by the city, necessary to keep the critical infrastructure of the city running even in the most difficult situations,” said Deputy Mayor for the Environment and Climate Plan, Jana Komrsková. 

Komrsková highlighted that strategic changes to the city’s energy procurement are taking place within the strategic milestones envisaged as part of the 2030 climate plan. “We plan to continue replacing heat production from burning coal with energy from renewable and secondary sources and from combined production of electricity and heat with natural gas, the aim of which is to reduce the carbon footprint of the heating industry,” she added. “We will also support comprehensive energy savings on city-owned buildings and public infrastructure. We will primarily focus on insulating the buildings themselves, optimising their heating, replacing lighting sources with more economical ones and installing photovoltaic power plants.”

According to the CEO of THMP, Tomáš Jílek, the company is ready to secure purchases for the years 2024-2026 as well. “Unlike last year, energy markets are experiencing a return to normal trading without regulatory interventions from the political level. Next comes purchases at reasonable price levels for a longer period, a return to products with a price derived from fundamental market data, and the possibility of achieving favourable prices, which is the task of THMP in the role of a so-called in-house trader.”

He added that the purchases in the second half of 2023 showed that THMP can be a more successful purchasing trader than the city and its districts acting alone on commodity exchanges.

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