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Wednesday, October 20, 2021

The price of electricity in 2021. Subsidies for the poorest

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We have not had such electricity prices on European exchanges yet. During the year, the Polish market grew by 90 percent, and from the low point of the pandemic – more than threefold. In connection with the energy crisis in Europe, the originally planned budget to support the poorest electricity consumers in Poland is to be increased, the daily Dziennik Gazeta Prawna found out.

The weighted average price of the energy supply contract on the Polish Power Exchange stood at PLN 465.70 / MWh in September against PLN 383.42 / MWh in August, TGE announced on Tuesday in a press release. According to the industry portal Wysokienapiecie.pl, “electricity is almost twice as expensive (approx. PLN 244 / MWh) a year earlier and three times more expensive than in spring 2020 (approx. PLN 150 / MWh)”.

Surcharge for the poorest

“It (budget – ed.) May be counted in billions, although it is to be lower than in the case of the freezing of electricity prices in 2019, which cost the budget about PLN 5 billion” – the newspaper says.

He adds that the new solutions would be entitled to “less than 10 percent”. customers instead of the previously announced 6 percent. “The support project by the Ministry of Climate may be subject to further changes. It is possible to extend it to gas consumers. Yesterday, Prime Minister Mateusz Morawiecki announced protective solutions for those most affected by the increase in energy prices,” we read.

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The daily emphasizes that energy companies have already announced that they will submit tariff applications assuming an approx. 20% increase in bills for individual electricity consumers. But wholesale gas prices are also breaking records on European markets. Therefore, further changes to the draft of the Ministry of Climate are possible – originally it was supposed to concern only electricity consumers, but our information shows that adding gas consumers is possible. The new solutions would enter into force from the beginning of the year, which means that work on the changed project will have to be immediate – stated in “DGP”

Bills up

What do the increases in the wholesale market mean for companies, local governments and ordinary Kowalski? Excessive growth of bills for retail customers is limited by the policy of the Energy Regulatory Office, which approves tariffs for approx. 60 percent. from 15.5 million households. It is known, however, that requests for increases from companies can be expected, and increase in tariffs next year – as admitted by the head of the Energy Regulatory Office, Rafał Gawin – it will be two- rather than single-digit. So far, there are no details of the regulations concerning compensation for the lowest earners, which have been repeatedly announced by the government.

Customers with rates set on the open market may be in a worse position. Communes, cities and companies can also have problems. – Local governments may expect an increase in electricity prices by over 60 percent – said Arkadiusz Chęciński, President of Sosnowiec on Tuesday. At the briefing, he referred to the prices proposed by suppliers in the ongoing tender of the Górnośląsko-Zagłębie Metropolis purchasing group. As he said, the results “are shocking.” In 2020-21, Sosnowiec spent about PLN 26 million on electricity, while after the tender for 2022-23, this amount will increase to the range of PLN 40-50 million, most likely within PLN 44 million.

Main photo source: Shutterstock

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