RAAEY is investigating any potentially dubious practices in the electricity market that drive up electricity costs, over and above the external factor of soaring wholesale prices, and place an excessive burden on the final bills paid by households and businesses.
Following a complaint from EBIKEN, it is scrutinising a range of charges and costs, starting with those set in the balancing market by vertically integrated energy groups. It is seeking to establish not only whether the charges are set transparently and reflect necessary services, but also whether they help strengthen competition.
A few weeks earlier, Deputy Environment and Energy Minister Nikos Tsafos had raised the issue at the 8th Renewable & Storage Forum, voicing concern about the increase in related costs. RAAEY had also asked IPTO to submit a report on the balancing market.
This is the market through which the system operator corrects in real time discrepancies between the volumes of electricity energy market participants had scheduled to generate and those the market had planned to consume, and the volumes the system actually needed.
The system operator is understood to have sent its responses to the Authority, which, after completing its assessment, is likely to summon some (or possibly all) vertically integrated energy groups to a hearing.
The message came yesterday from RAAEY Vice-President Dimitris Fourlaris, who said at IENE’s annual conference that the balancing market is essential to the safe operation of the electricity system, but also affects the overall cost borne by market participants and, ultimately, consumers.
“Its effective operation and transparency in setting the related charges are therefore particularly important,” Mr Fourlaris said, noting that RAAEY is assessing the data and the behaviour of market participants to determine whether further action is needed.
“The cost associated with system security is real and necessary. However, it should reflect services that are genuinely needed, be set under conditions of effective competition and be allocated in accordance with market rules,” the Authority’s Vice-President added.
EBIKEN has been highlighting since last year the practice of some players declaring on the energy exchange volumes greater than their customers need, thereby artificially inflating demand and driving up electricity costs for industry. It recently sent a new letter to RAAEY.
In the letter, it notes that the cost of the balancing market has risen significantly, now topping €20 million a week. It adds that repeated spikes have been recorded both around midday, despite high output from renewable energy sources, particularly solar, and after sunset, when solar generation falls away.
According to the letter, the increases have been so sharp that costs reached €35/MWh in September, significantly above levels in previous months, further inflating final bills that were already high because of the surge in wholesale prices.