Determinants of the Relationship between Wholesale and Retail Energy Prices in the Czech Republic
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Date
2024-11-11
Authors
Pavláková Dočekalová, Marie
Luňáček, Jiří
Radil, Lukáš
Balcerzak, Adam Przemyslaw
Meluzín, Tomáš
Łapińska, Justyna
Zinecker, Marek
0000-0003-4628-5075Advisor
Referee
Mark
Journal Title
Journal ISSN
Volume Title
Publisher
Acta Montanistica Slovaca
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Abstract
Rising energy prices have become a focus of interest for politicians at the international, European, and national levels. Energy prices are the main determinant of profitability or even the existence of the industrial sector. So, it is accepted that energy policy aims to ensure a secure, sustainable, competitive, and affordable energy supply for households and businesses. However, the recent geopolitical situation has significantly affected the energy policy of the European Union, raising concerns about energy security and an energy crisis. This crisis has had social, economic, and political consequences, including energy poverty. In this context, it is essential to understand the determinants of the relationship between wholesale and retail energy prices. This paper presents a model proposal to be used by the Czech Energy Regulatory Authority. The model of average retail prices depends on the type of contract - spot or forward, with the three-year forward contract having the largest weight on the retail price. Therefore, our study shows that long-term contracts significantly impact retail energy prices, highlighting the importance of regulatory monitoring of market strategies. Methodologically, the model is based on a multivariate regression analysis solved with the least absolute deviations and data for the period 2012 to 2023. The findings of the study contribute to a better understanding of the complexity of the dynamics of energy prices and support policymakers while attempting to ensure energy affordability and sustainability.
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Citation
Acta Montanistica Slovaca. 2024, vol. 29, issue 2, p. 332-342.
https://actamont.tuke.sk/pdf/2024/n2/8pavlakova.pdf
https://actamont.tuke.sk/pdf/2024/n2/8pavlakova.pdf
Document type
Peer-reviewed
Document version
Published version
Date of access to the full text
Language of document
en