Suppliers set to lose ground in tougher mid-voltage market

Independent electricity suppliers are under pressure to increase mid-voltage tariffs on existing customer agreements as a result of rising wholesale electricity costs and higher NOME auction prices.

Market conditions have become increasingly unfavorable for independent suppliers over the past few months and are expected to become even more challenging following the record wholesale electricity price levels struck at the latest NOME auction on Wednesday.

Overall conditions are tightening up the electricity market’s mid-voltage category rather than opening it up to greater competition. Until now, independent suppliers had achieved solid market share gains in this category but could start surrendering ground.

NOME auction wholesale electricity prices reached nearly 55 euros per MWh at this week’s session. Additional costs of 10 euros per MWh take the total to 65 euros per MWh, a loss-incurring level for most existing mid-voltage supply agreements offered by independent players.

Major-scale customers who opt to return to the main power utility PPC should expect higher electricity price levels than those offered a year ago as a result of the sharp increase in CO2 emission right costs.

PPC has increased a CO2-related surcharge included on mid-voltage supply agreements from roughly 2.5 euros per MWh last year to slightly over 15 euros per MWh at present. It appears this surcharge will also be added to household agreements at the beginning of 2019.