This week the electricity price has more than halved. Higher temperatures and a relatively large production of renewable energy in particular push down the price of electricity. Meanwhile, on Monday, December 19, the government released more details about the Energy Cost Allowance for Small and Medium-sized Enterprises (TEK).
The electricity price has fallen sharply this week. On Tuesday, December 13, the EPEX spot recorded €434,49 per megawatt hour. On Wednesday, December 14, the price rose a little, to €437,94. After that, the electricity price fell sharply. On Monday, December 19, the electricity price was at the lowest point of the week, at €194,63. After that, the electricity price rose slightly. On Tuesday, December 20, the electricity price was €199,63 per megawatt hour.
It is not unusual for the electricity price to drop at the end of the week. The electricity demand from industry is lower during the weekend. This week this 'weekend dip' was quite severe and even on Tuesday the electricity price was still below Sunday's level. The main reason for this lower electricity rate is the higher temperature. The lower gas price in particular makes electricity cheaper, but there is another reason that the electricity price rises at low temperatures. In several European countries, houses are heated electrically, such as in France, which means that the demand for electricity peaks considerably during cold periods. Due to the low utilization rate of French nuclear power plants, France has purchased a lot of electricity from other European countries in recent weeks. The additional French electricity demand forced gas-fired power stations across Europe to work harder, causing electricity prices to rise. Now that the temperature is rising again, it is leveling off the peak in power consumption and electricity prices.
The additional revenues from green energy also push the electricity price down. Between late November and early December, electricity prices also rose as less electricity was generated from renewable sources. This week, renewable energy production increased sharply. In particular, the large production of wind energy brought the electricity price down this week, because electricity from this source is virtually free.
Allowance for energy costs further elaborated
At the close of 2022, the government announced more details about the Energy Cost Allowance (TEK). Companies with a maximum of 250 employees can submit an application for the TEK to the RVO. To ensure that companies can be helped quickly, the government has chosen to rely on historical data. The TEK is therefore determined on the basis of consumption in recent years. In addition, the current energy price is not taken into account, but the government assumes a modeled price.
If the RVO approves a company's application, the company will receive 60% of the maximum subsidy within a week. The final amount of the subsidy will then be determined. Because many requests must be processed in a short time, the execution is largely automated.
However, this does not mean that the TEK is finished yet. The government has yet to assess whether additional conditions will be imposed on the scheme. For example, the government is considering setting a maximum turnover growth or profit. In addition, the scheme still needs to be approved by the European Union.
The government announced the basic criteria of the TEK as early as the second week of November. These criteria remain unchanged for the time being. To qualify for the scheme, a company must spend at least 7% of its turnover on energy costs. Before November 11, the consumption limit was still set at 12,5%. In addition, a company had to consume at least 5.000 M3 of gas or 50.000 kilowatt hours of electricity. But the conditions have now been loosened.