Higher wholesale electricity prices, prompting independent suppliers to activate wholesale-cost clauses included in their supply agreements to avoid losses, are tightening up the market by leading disappointed consumers back to the power utility PPC, a clear regression in the effort to establish a broader, more competitive field of players, latest data has indicated.
Consumers opting to leave independent suppliers and return to PPC rose by 56 percent in the first quarter of 2021 compared to the equivalent period a year earlier, market data obtained by energypress has shown.
The number of consumers leaving independent suppliers for any other supplier increased by approximately 40 percent in the first quarter of 2020, the data showed.
This increase in consumer returns to PPC is expected to be reflected in forthcoming market-share data, market officials believe.
Last year, the wholesale market price, represented, at the time, as the system marginal price, ended April last year at 38.02 euros per MWh, whereas this year, in the form of the recently launched target model’s day-ahead market, the wholesale price in April has exceeded 63 euros per MWh.
Increased CO2 emission right costs and elevated TTF and Brent prices are factors that have driven wholesale electricity prices higher. So, too, are higher balancing costs, currently more than double levels of previous years.
Wholesale electricity prices for the next twelve months are seen averaging 89 euros per MWh in the low-voltage category and 79-80 euros per MWh in the medium-voltage category.
PPC, which has never achieved its commitment to lower its market share to less than 50 percent, is offering customers significant discounts at below cost, and, as a result, hampering the market liberalization process and further narrowing the profit margins of independent suppliers, a prominent market official has told energypress.
RAE, the Regulatory Authority for Energy, has the authority and responsibility to take action against suppliers selling electricity at below cost and protect consumers against misleading offers, the official added.