IPTO set to take action over elevated supplier mark-up costs

Power grid operator IPTO is preparing to take corrective action to soften the impact of sharply increased mark-up costs on electricity suppliers over the past few months, the operator’s remedy including credit invoices for suppliers, according to market officials.

Since last October, especially during the months of November and December, the total mark-up cost for suppliers has risen from levels of 4 to 6 euros per MWh to over 8 euros per MWh.

The weighted average variable cost per production unit rose sharply from levels of between 0.7 and 6 euros per MWh to 8.2-8.5 euros per MWh over the two-month period covering November and December.

Also, miscellaneous mark-up costs have risen considerably, reaching 3.9 euros per MWh in December from previous levels that ranged between 0.5 to 3 euros per MWh.

Supplier charges have increased as the lower-limit variable cost of lignite is elevated, pundits explained.

Meanwhile, the System Marginal Price (SMP) has fallen as a result of the renewable energy sector’s high level of energy-mix participation and extremely low natural gas prices benefiting natural gas-fired power stations.

Improved weather conditions and the subsequent reduction of energy needs would probably cut supplier costs as lignite usage would decline.