War between the Government and ESM over the price of electricity?

Electricity bills. / Photo: Dragan Mitreski / Free Press.

The Government guarantees that AD ESM, according to the Law on Energy, will provide the necessary quantities of electricity next year to meet the needs of households and small consumers, claim the Ministry of Economy.

It is increasingly certain that the Government and ESM can not reach an agreement on the price of electricity that will be produced by state facilities. The state electricity producer ESM did not submit its bid yesterday, at the second tender from EVN Home. The application for the tender and the price offered by ESM is more than important, ie the final price that will be paid by the households and small companies depends on that price. According to the agreement that is valid until the end of the year, ESM sells the electricity to EVN Home at a price of 36 euros per megawatt-hour, and the current price of electricity on the HUDEX exchange, which is the most important for local procurement on the free market, is 258 euros for megawatt-hours!

EVN Home announced the next tender for electricity supply on December 9. ESM did not answer whether they will be able to make their offer by then, so the question that arises is what if ESM does not appear in the tender again? To this question we received an answer from the Ministry of Economy that "the Government guarantees that AD ESM in accordance with the Law on Energy and next year will provide the necessary quantities of electricity to meet the needs of households and small consumers."

- The electricity producer with the largest installed capacity in the Republic of Macedonia is obliged to offer the universal supplier, in the procedures for procurement of electricity, in accordance with the rules for procurement of electricity for the universal supplier, for sale electricity in 2022 at least 60 percent of the total annual needs of the supplier - say from the Ministry of Economy.

EVN Macedonia, on the other hand, explained to us that the universal supplier EVN Home supplies households at a price set by the Energy Regulatory Commission and which by the end of the year is 5,36 denars per kilowatt-hour for households with single-tariff meter, 6,69 denars for a high tariff for a two-tariff meter and 3,36 denars for a low tariff.

- Consumers in the household category are supplied by the universal supplier (in this case EVN Home), and if they want, they have the opportunity to enter the free market and choose a supplier that will supply them with electricity on the basis of a contract. In the open market, the price for electricity supply depends on the price at which the supplier buys electricity on the stock exchange. The price for electricity supply for households on the open market is much higher than the regulated price for supply from the universal supplier - say from EVN.

In conditions of enormous growth in electricity prices, ESM, as they stated, are trying to provide as much production as possible to help companies, which are facing huge prices in the open market, which in turn as an input component burdens consumer prices. This means additional procurement of imported coal, increased coal mining in Suvodol, greater exploitation of REK Bitola and inclusion of TPP Oslomej, which is an additional cost. On the other hand, the situation in ESM is not great even according to their last year's financial results. The company under whose cap are the state capacities for electricity production ended last year with a loss of 16,8 million euros, while in 2019 it had a profit of 3,3 million euros.

 

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