Regarding the article entitled Why the price of electricity in Slovenia is the highest in Europe, which we published on Siol.net on October 18, 2022, we received a request from the Ministry of Infrastructure last night to publish a correction. Since the author was not included in the message, we do not publish unsigned matters, and we asked them to inform us of the site on this request. This morning we learned that we can name Petra Mesic, who is responsible for public relations at the Ministry of Infrastructure, as a writer. We publish the text we received in full, without editorial interventions and proofreading.
Request to publish a correction and present the facts and circumstances of the violation
Misleading torrents about electricity prices
The process of energy exchange is very complex and any simplification is very dangerous, as it can distort the real picture to a large extent and thus provide false and misleading information.
The distorted image is usually the result of the target offering, which has nothing to do with the prices that customers ultimately pay, whether they are household or business customers. Electricity can be traded in power exchangers in many ways, with different products or even types of trade.
It concerns different products and different types of trading – temporal, geographical and functional. As a result, various stock market prices and indices … Stock market prices, for example, are constantly changing (in the trading time window almost constantly) for a day in advance throughout Europe (differently, depending on the region, market, country .. .). Sometimes it is higher in France, sometimes it is in Germany, and often it is higher in Italy. Europe is divided into so-called price zones. Exchange rates for electricity in these areas move based on supply and demand in that area, they fluctuate and of course not quite the same. The different rates between regions impose limitations between cross-border capabilities, which are also not free. If there were a lot (or enough) electricity connections between countries, the whole of Europe would have uniform exchange rates. Thus, the transfer of energy from one region to another is quantitatively limited, conditional on capacities, as a result of which prices also differ, or there is a price difference between regions. The direction of the price (growth or decline) is often in the same direction, but not always.
The price of the Slovenian stock market is usually a little lower than that of the Italian and a little higher than the Austrian, but this of course changes, especially in certain exceptional circumstances. It is also necessary to distinguish between prices in the so-called spot market, in the next day market, and in the so-called futures markets for a period in the future. These are different types of stock trading and within that also different time products are marketed in this way. It is also necessary to distinguish between stock market prices for bandwidth and peak power, night power, etc. All these exchange products have a different exchange rate. The differences can be significant. For example, in one exchange, bandwidth power may be cheaper, but in another exchange, peak and night power. By combining products, the opposite effect can sometimes be achieved.
It is also important that the price on the stock exchange is formed with a very small amount of energy trading volume, especially in times of price hikes, as we realize that there is not a large volume of traded volumes, and in particular it affects the price of some liquid products insufficiently and thus on the price of this product. This is especially true of the so-called micro-exchanges or exchanges in micro-markets. At the same time, this does not represent the actual situation of real prices in this region.
Stock exchange, current prices are not equal to supply prices for end customers
We should never substitute stock prices (especially individual products) with end customer supply prices. It is determined by the supplier and depends on many factors, in addition to all the details already included, especially the general stock market strategies and strategies for buying and selling the quantities needed for its purchase or sales portfolio. Stock market prices fluctuate a lot, they do, while supplier selling prices fluctuate little or almost nothing. Customers’ goal is to get a stable price and the lowest possible price. And the goal of suppliers is to offer this to customers, as they want to acquire or retain customers. The effect of current stock exchange rates on the prices customers pay is not federal. Stock exchange volatility can be reflected to a certain extent for example. Annual contracts with major clients, while for indefinite contracts with home clients, this connection is usually non-existent.
In addition to the energy cost, the final electricity bills also include network fees and contributions.
It follows from all this that we have to be very careful when making international comparisons of this kind and that.
The only criterion for price comparisons of supply to end customers between countries is validated Eurostat data, which shows that the price of Slovenian domestic production (“ti localproducerprices”) in August 2022 according to the growth index since 2015 was lower than the EU average, and prices Retail which includes all taxes and fees, in the first half of 2022 for households €139/MWh (which places Slovenia in the bottom third of the member states with the cheapest electricity), and for industry €193/MWh (which places Slovenia in the bottom half of the countries members with the cheapest electricity).
If, after all, it is agreed that high stock prices are a certain criterion of insufficient comparison, the question rightly arises as to how good dealers or suppliers are in order to convert these high stock prices in the country or stock market area into one of the lowest prices final retail. Which customers pay at the end, while merchants still make high profits.
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Why is the price of electricity in Slovenia the highest in Europe?
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