Due to a combination of less demand for electricity at the turn of the year and an ample supply of electricity generated by wind turbines, the electricity price fell to a level that we have not seen for some time. Several experts warn that the low prices are unlikely to be a harbinger of what to expect this year. Meanwhile, European policy on the energy market is under fire.
On Friday, December 30, the Epex Spot day ahead stood at €16,38 per MWh. On New Year's Eve this rose slightly to €20,13 per MWh, before dropping again to €18,14 per MWh a day later. These are historically low prices that have not been seen on the Epex for a long time. The last time the Epex fell below €20 per MWh was on August 8, 2021. The dip in the electricity price is only short-lived, it seems. Today, Tuesday January 3, the Epex is already at €145,86 per MWh.
Markus Krebber, the CEO of the German energy company RWE, also warned that electricity and gas will remain expensive for the time being. The CEO told the Westdeutschen Allgemeine Zeitung that despite government intervention, energy prices remain approximately double compared to before the Russian invasion of Ukraine. The German parliament approved a support package in December worth around €100 billion to support consumers and businesses to cope with high energy prices.
Additional taxation under fire
The American oil giant and energy company Exxon announced last week that it would take legal action against the EU against the extra tax on 'profiteering profits' from energy companies. According to Exxon, Brussels is violating its legal authority by imposing this additional tax. The record profits of oil and energy companies worldwide due to high energy prices have led to new calls for higher taxes on the sector. An additional tax is counterproductive, discourages investment and undermines investor confidence in the energy sector, an Exxon spokesperson told Reuters.
Exxon is taking the extra tax into account when considering the billions that the company would like to invest in the European energy market. The additional tax would cost Exxon approximately $2 billion in 2023, the CFO previously told analysts. The European Commission informed Reuters that it has taken note of the lawsuit. "It is now up to the General Court to rule on this case. The Commission considers that the additional tax is in line with EU law," a Commission spokesperson told Reuters.