"Shock and awe" for individuals and businesses are reserved for the upcoming electricity bills, as the average price per megawatt hour in the last four months compared to last year has more than tripled! The expected further increase for the "winter" four months causes fear.
The average Market Clearance Price (MAP) derailed in the four months of July-October. During this time, with data as of October 28, the average settlement price in the Next Day Market climbed to 138,18 euros per megawatt hour from 45,13 euros/MWh in the corresponding period of 2020 (source Energylive.cloud).
In other words, it is more than tripling, overburdening electricity bills for businesses and households. At the same time, this uncontrollable jump in the wholesale price of electricity seems to be a "drop in the ocean" of the support measures announced by the government, for the time being, only for the weakest households.
In this context, PPC, according to information, informed small and medium-sized industries that the electricity supply contracts will be changed from December 1, which will henceforth include an Adjustment Clause (depending on the wholesale price), which means that they will be asked to pay for electricity two and a half times more than they pay today. It is obvious that this will lead to a domino of price increases in goods and products that have already risen.
Another element that argues for an even greater burden on the total wholesale electricity costs is the upward trend of the Balancing Market (s.s. ensures the smooth operation of the energy system) from the end of September. In fact, in the period from October 11 to 17, it exceeded 20 euros / MWh, creating a headache for industrial consumers and non-vertical suppliers.
According to data from ADMIE, which is responsible for the Balancing Market, the total cost of Surcharge Accounts started to increase onteam September 27 to October 3, reaching €12,25/MWh, to rise to €14,67/MWh the following week and to bite another €5,37/MWh in the week to October 17. If the balancing cost stabilizes at €20/MWh, it is estimated that the domestic industry will face problems sustainability, while the retail price of electricity will be burdened with even greater increases.
Difficult autumn with even more severe winter
The increases in electricity during the last quarter range, based on data from EKPOIZO, from 30% to 170%. According to market participants, they are not expected to stop, on the contrary, it is estimated that they will jump to higher heights in the first quarter of 2022, as, due to increased demand in the winter months, wholesale prices are traditionally higher this period than in autumn. In anticipation of this fact, the energy market is bidding on the continuation of the subsidy on electricity bills for the quarter January-March 2022.
Given the more than tripling of the average clearing price in the Next Day Market in the four months of July-October compared to the same period last year, according to market participants, if, for example, a household paid 100 euros last year for electricity and 50 euros for Regulated Debts IPTO, HEDNO, YKO, ETMEAR), now, with the same consumption, will pay 300 + 50, ie 350 euros, instead of 150 euros. Adjustable Charges increase depending on the kilowatt hours consumed. The more the latter, the greater the additional charge from the specific charges, which is estimated at about 5% of the total kilowatt hours.
But what's worse is that the big increases in the wholesale price per megawatt hour, due to the explosion in the price of natural gas and the increase in the prices of pollutants, started to take place from September onwards, which means that unless something very important changes in the conditions prevailing in markets energy, the burden will be much higher in the next purely winter quarter of November-February!
The average wholesale price of a megawatt hour for the month of October is already set, over three days before the end of the month, at over 200 euros. Even if there is no new increase, the current rise in energy costs compared to the average wholesale price in the four months of July-October 2020 almost reaches a frightening… 400%.
To use the same simplified example, a consumer who paid last year in the winter four months 100 euros for electricity and 50 for regulated bills, will pay this year, having the same consumption, almost 400 + 50 euros.
As expected, in addition to the direct effects on household budgets, the deplorable situation created by the skyrocketing electricity costs will force a number of companies to increase their prices, not only because of the rising operating costs but also because of the impact it has had. the increased energy costs (not only in electricity, but also in gas and oil) in their own raw material supply chain.
