COMMENT: Fix energy prices and save? You are no longer guaranteed savings, experts advise caution

COMMENT: Fix energy prices and save? You are no longer guaranteed savings, experts advise caution
COMMENT: Fix energy prices and save? You are no longer guaranteed savings, experts advise caution

It is just a sad question mark why the government’s communication was not able to explain to the public all – according to the government’s opinion – the trump cards that will be pulled in the fight against high energy prices. We can ask why, when it is probably obvious to everyone that even the opposition parties do not know what to do with the energy crisis so that it all makes sense and prices start to fall. It is not from the author of this comment that even the machine-gun-talking Karel Havlíček from the ANO movement or Tomio Okamura from the SPD actually do not know where to go when spewing their guaranteed recipes for solving high energy prices, and their ideas have already been literally condemned by a number of economic authorities with reference to that such solutions would fatally harm the domestic economy rather than help it. And that includes the supposedly guaranteed plan to reduce the price of electricity, namely to leave trading in Leipzig.

So let’s sum it up: The government is preparing a system of sales through the state energy trader, at the pan-European level there is talk of a change, or excluding the pricing of gas power plants in the calculation of electricity prices, or about the method of capping the prices of natural gas that comes from Russia. And so on. This is not enough, but again… We come across the inability of responsible politicians to sell these results. Damage. And as for the problems with concluding new electricity contracts, we won’t find anything simple here either. “There is not a completely simple answer to the issue of fixing electricity prices,” Bohumil Trampota, an equity analyst at Komerční banka, said directly when asked by the EuroZprá server whether people should fix electricity prices in new contracts again at the end of their contracts.

According to Trampota, the price of electricity is at a very high level. But the outlook for the next few years is, let’s say, encouraging. “It is expected that the price should decrease in the coming years. From about five hundred euros per MWh for next year to about one hundred and thirty euros for 2027 (this is the price of electricity on the exchange, not for final consumers, but let’s assume that the dynamics will be the same). Second, producers usually sell electricity two to three years in advance. This means that the electricity we pay for this year was sold by the producers in the last two years. There was no war and ‘gas’ crisis then. This will be reflected in prices only – let’s say – at the beginning of next year,” Bohumil Trampota explained to the EuroZprá server. “That’s probably why I won’t give you a definite answer. I would simply follow the offer of suppliers and the development of the price,” Komerční banka’s analyst said when asked about the procedure for concluding (old) new contracts for the supply of electricity.

Yes, there are a number of reasons why this is so. You may be wondering what all is to blame for high electricity prices. According to Bohumil Trampota, the price of electricity is influenced by emission allowances, fuel (coal and gas) and currently also a risk factor (war). “We can simply say that if the situation in Ukraine and the gas supply are resolved (unstable supplies from Russia will be replaced by other sources), the price of gas will drop rapidly, and the price of electricity will also start to drop rapidly. The question is how long it can take,” stated Bohumil Trampota.

A winged proverb says that everything has to be tried. And it seems that some authorities think the same way. For example, about the fact that when the price of electricity on the energy market went crazy and the whole system began to collapse, it is time to remove the cause of the extreme price increase as quickly as possible. Why? Well, so that the situation returns to normal and all sorts of extremists and populists run out of breath to carry out their coups or returns to power. This is also why in Europe they recommend removing the aforementioned gas power plants from trading on the stock exchange, as this step could quickly reduce electricity prices by up to two-thirds, according to environmental organizations. ČTK stated on the topic that there is no such elegant solution for heating with gas (such as removing gas power plants from pricing), therefore the state needs to help people and support warming, energy savings and the transition to clean heating, for example heat pumps, as much as possible. if possible also powered by electricity from solar panels on the roofs. It is certainly sad that rising energy prices make life very difficult for some social groups of the population, but unfortunately it is not certain that the group of politicians who incite unrest in the country with reference to a change of government is really able to help with high energy prices.

The article is in Czech

Tags: COMMENT Fix energy prices save longer guaranteed savings experts advise caution

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