The new framework will come into force from 1 October
A reduction of around 50% compared to last year is recorded, so far, in 2023, in the price of electricity on the Energy Exchange, while the international price of natural gas – although it has increased relatively in recent days, from 23 to 38 euros per megawatt hour – in however, it is at levels 90% lower than the historical high of 303 euros reached last August.
In particular, 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 euros which had arrived in August 2022.
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 proceed in the next period with the withdrawal of emergency measures in the energy market. 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.
How fragile the market balances are is shown by the fact that on the first 15th of June the international price of natural gas on the Dutch Stock Exchange rose 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 possible 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), however, 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. Under the proposals put to public consultation, switching supplier for those on variable tariffs (the majority) will continue to be penalty-free, while the products available to consumers fall into four categories: fixed, variable with prior notice of price, fluctuating with ex post price notification and dynamically 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.
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