Electricity suppliers pressured by wholesale price surge

Electricity supply companies are facing severe cash-flow pressure as wholesale prices continue their surge and record-breaking streak, reaching 171.38 euros per MW at the energy exchange today.

Consequently, suppliers require greater capital amounts to purchase electricity quantities needed by their customers, not expected to pay for consumption until two months later.

According to market sources, the resulting extraordinary amount is currently costing electricity suppliers 60 euros per customer. Suppliers dread more wholesale electricity prices rises, which would further affect their ability to buy electricity before collecting related sums from customers at latter dates.

This cash-flow problem is greater for suppliers who are not vertically integrated and, as a result, have no other revenue sources. Even so, sector officials contend that vertically integrated players are also feeling the strain.

Suppliers are also on edge as a result of a lack of clarity on the government’s subsidy support plan for consumers, budgeted at 200 million euros.