Railways in Czechia

Správa Železnic completes traction power auction

Section of tracks in Czechia2010, Dezidor / Wikimedia Commons

Czech railway administration Správa Železnic has completed an auction for the supply of traction power for the operation of its fleet of electric trains.

Energy solutions provider ČEZ ESCO won the auction, which set total projected traction energy consumption for 2023 at 1,280 gigawatthours. Current volatility in electricity markets, spurred by the invasion of Ukraine, have seen wholesale prices spike this year and as a result, price of supply was not secured on a variable pricing basis rather than fixed wholesale price.

Under the terms of the auction, price of electricity under the contract will be determined according to day-ahead market prices of Czech electricity and gas market operator, OTE. As such, prices will not be constant throughout the year, but will change on a month-by-month basis.

“The resulting charged price for the supply of traction electricity is subject to capping in accordance with Government Regulation No. 298/2022 Coll., on the determination of electricity and gas prices in an extraordinary market situation,” a spokesperson for Správa Železnic commented. “According to the valid wording of the regulation, this is set at a maximum of CZK 5,000/MWh excluding VAT and electricity tax.”

The firm expects the new agreement to mitigate key risks associated with the prediction of traction consumption volume and to enable better compliance with contractual tolerances for commodity consumption.

Headquartered in Prague, ČEZ ESCO provides energy solutions for businesses, municipalities and the state and operates 17 subsidiaries in the Czech Republic and Slovakia, employing over 1,800 employees.

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Author: Malcolm Ramsay

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