Prime Minister Fiala and the government have been talking about an energy crisis in the country since the beginning of 2022. There was and is no energy crisis. All the talk about electricity was to cover up the huge speculation on the commodity derivatives exchange.
Today, there is clear data on electricity production in the country in recent years, on exports and on trading, but not in electricity, but in commodity derivatives. The electricity price increase was a scam and a scam instigated by the Czech Government and their "friends" who smelled a huge opportunity after the collapse of Bohemia Energy. But trading, trading in commodity derivatives is more like Russian roulette than the job of an exchange engineer in a block watch.
Information on open positions worth up to 557 billion crowns. That is, about how CEZ's trading got out of control and it was necessary to quickly find money somewhere for possible damages. Also, remember those wannabe experts who spent all of 2022 and 23 telling everyone that electricity had to be sold through the stock exchange? Oops, I guess they're liars or misinformers, since CEZ actually sells the vast majority of its generation in the country, directly to customers or distributors.
The increase in electricity prices for customers in the Czech Republic was blamed on the fall of Bohemia Energy and the war in Ukraine. It is a tragedy that the Czech Government and the supervisory authorities allowed this to happen. In addition, they have lied to us for a long time and systematically about the energy crisis and how they are fighting (hard) what they have caused.
Technically, from the point of view of the engineers, there was no reason for the price of electricity in the Czech Republic. The termination of service by Bohemia Energy was an opportunity for other traders to easily gain new customers, perhaps with some price premium. What happened, however, was a battle of "Grab what you can, the cash register is open".
Table 1 shows that the amount of electricity exported was indeed surplus electricity. The numbers in the tables and in the linked article clearly show that the vast majority of electricity is consumed in the country and CEZ has sold and is selling it directly to large consumers and retailers. So what did CEZ need a quick loan of up to 3 billion Euros (up to 75 billion kroner at the exchange rate) for in the summer of 2022?
The problem was not electricity production, nor was the collapse of Bohemia Energy. The problem was the trading or rather speculation in commodity derivatives on the Leipzig Stock Exchange
And this brings me to the question of why CEZ needed a quick loan from the state of up to 3 billion Euros, when it certainly drew 2 billion Euros. It was necessary to settle the commodity derivatives business quickly and, if possible, without scandal. But by the end of 2021, these trades had already generated a loss of CZK 26.3 billion.
A loan of up to 3 billion Euro from the Government of the Czech Republic, plus open commodity liabilities that exceeded more than five times CEZ's normal exposure and reached a value of over 500 billion CZK (in Table 3 - exactly 557.1 billion CZK), plus the provision of some dividend to shareholders, all these were the reasons why electricity prices shot up so crazily.
The capping of electricity prices at up to CZK 5000/MWh without VAT was another instrument to get money out of citizens, traders and companies. This is in case CEZ's big business involvement in commodity derivatives trading turns into a huge mess.
Fortunately, CEZ's speculation in the second half of 2022 has started to tip into profit and they are making a profit on derivatives. But inflation was set in motion, the price hikes took off, and the GOP got so wrapped up in their lies and obfuscation that they no longer had the power and knowledge to stop the inflation and price hikes quickly.
So in 2021, the loss from derivative trades was 26,302 billion.
Using CEZ's Annual Reports, I was able to find an explanation for why a functioning energy company needs a loan that reaches up to 3 billion Euros quickly and without much publicity.
Using open sources from a longer time series, it is clear to see that Prime Minister Fiala and his government lied when they said we had an energy crisis in the country. There was no energy crisis and Prof Fiala lied and has a huge share of responsibility for inflation in the Czech Republic.
I did find the real reason why the Czech Government quickly lent 3 billion Euros to CEZ. I did find an explanation as to why electricity became so foolishly expensive and thus sparked inflation, but many other questions remain.
Jiří Nápravník 8.2.2024
P.S..
The power factories will never give up power voluntarily unless forced to do so in time by the citizens or by an economic crisis or collapse. We are getting dangerously close to the second variant: Monopoly of One Truth (12.2.2024) Quote: “Someone has to say "This is how it will be, or we will talk ourselves out of hundreds of solutions, when the worst will inevitably emerge and we will all pay the price. Failure to compromise goes against everything and everyone and leads to the worst solutions!"
At the end of 2021, CEZ was losing CZK 26 billion on commodity derivatives and had other open trades worth CZK 557 billion?! The Constitutional Court dealt with some 39 billion for pension increases and in the case of CEZ the Prime Minister and his government almost quietly released 3 billion Euros, or 75 billion crowns, and no one knows when they will get the money back, if ever. We were happy to support the refugees from Ukraine with 16 billion crowns, we gave 75 billion crowns to the greedy CEZ? The government doesn't want to give pensioners more money, but it raises its own salaries! That is for the immediate fall of the government with the final stop at Pankrác! The public media is complicit in this crime against the country and its population, and is silent instead of inciting.
In iDnes.cz, they forcibly removed the article from the main page, stating that there must be information verified from two sources. When the author of the article asked them what is more than the Annual Report of a company listed on the stock exchange, they did not answer and insist on two sources:-) JŠ
***
The nephew of his uncle, a member of parliament, asks: "How does one become a successful politician?" "It takes a lot of self-denial. For the first seven years you just have to act like a pig" "And what about after those seven years?" "During them you will get used to it."
Jewish anecdote
Read more...