Wholesale prices surging with target model, ceiling considered

The target model, pitched by the government as a price-reducing tool ahead of its recent launch one month ago, is developing into a major problem for the energy market as it has sparked a continual rise in wholesale electricity prices, which, if not brought under control, will eventually be rolled over to households and the industrial sector.

Mid-voltage tariffs are on an upward trajectory, while in the low-voltage category, many electricity suppliers are now reshaping clauses to incorporate increased costs.

The day-ahead market price for today reached 90 euros per MWh, up from 74 euros per MWh yesterday, and, prior to the target model, levels ranging between 55 and 60 euros per MWh.

This upward price surge has prompted strong concerns, even bankruptcy fears, among electricity suppliers who are not vertically integrated. Meanwhile, this worrying development has coincided with diminishing water levels at hydropower plant reservoirs.

The energy ministry has called for restraint from producers, warning it may need to intervene. The ministry’s secretary-general Alexcandra Sdoukou, in initial talks with producers yesterday, requested an end to overinflated prices, warning that a price ceiling may need to be imposed if the results are not satisfactory.

Whether such intervention could be implemented for an extended period remains unclear as measures of this nature are forbidden by the European Commission.