Up to 50% reduction is recorded in the price of electricity on the Energy Exchange so far in 2023, while the international price of natural gas is at levels 90% lower than the historic high of 303 euros reached last August.
The average price of electricity on the Energy Exchange during the first 5 months of the year was 152 euros per megawatt hour (in May it was 115 euros and in the first fortnight of June it fell to 84 euros) against 306 euros which was the average price in 2022 and 454 euro that had arrived in August 2022.
The decrease in the international price of natural gas comes after a relative increase in recent days, from 23 to 38 euros per megawatt hour, however it is now at levels up to 90% lower than the historic high of last August.
Only 1.5 minutes per kilowatt-hour the government subsidy in May and June
The de-escalation of prices has led to a significant reduction in consumer subsidy funds as the final prices set in the market by suppliers approached or even fell below the 15-16 cent level that was the target of government subsidies.
The government subsidy on household tariffs for the months of May and June was limited to just 1.5 cents per kilowatt hour (while last year in August it was 64 cents per kilowatt hour).
In the light of the developments in the international market, the European Commission called on the member countries to withdraw the emergency measures in the energy market in the next period.
Market players estimate that the crisis is not over and that a possible increase in natural gas demand from China combined with the possibility that next winter will be heavier than last year may lead to a new rise in natural gas prices and by extension of electricity.
Fragile balances in the market
How fragile the market balances are is shown by the fact that in the first 15 days of June the international price of natural gas on the Dutch Stock Exchange increased by 65% on the occasion of the interruption of flow from Norwegian fields.
At the same time, it is pointed out that although Europe is today better prepared to face potential challenges (natural gas storages have much higher reserves than last year, liquefied natural gas infrastructure has been strengthened and sources of supply have largely diversified), it should have ready planning to deal with any new supply crises and price increases.
In view of the withdrawal of the emergency measures in the energy market, the Regulatory Authority for Waste, Energy and Water is proceeding with the preparation of the new framework that will come into force from October 1st in terms of consumer-supplier relations.
According to the proposals put to public consultation, switching supplier for those on floating tariffs (the majority) will continue to be done without penalty, while the products that will be available to consumers are divided into four categories:
- steady,
- fluctuating with prior notice of price,
- fluctuating with ex post price notification
- and dynamic for those with smart meters.
The set of invoices will continue to be posted on the Authority’s website as well as on the price comparison tool.
It is also worth noting the Authority’s previous indication that existing customers of a supplier that offers low tariffs only for new customers, in order to increase its market share, have the right to request to join the cheapest tariff free of charge.
#Price #reduction #electricity #natural #gas #energy #subsidies #shaped
