In recent months there have been almost exclusively price increases for electricity and gas in the wholesale trade, but the current trend points sharply downwards. This should also continue to alleviate the situation in the case of Wien Energie, which has applied for billions in federal aid. According to experts, the price drop could be a preliminary reaction to EU measures on the electricity market.
The high gas price in particular has caused enormous price increases in recent months – also on the electricity market. The wholesale price for electricity even rose by 1,400 percent within a year.
Relaxation in the case of Wien Energie
These huge price increases also contributed significantly to the acute economic difficulties of the energy supplier Wien Energie. Up to a total of $10 billion in grants from the city of Vienna and the federal government may be needed to fund the deposits needed for stock exchange trading, it said Monday.
Shortly after the request for help, however, the first everything was released. Due to the positive development of wholesale prices, a positive balance of 400 to 700 million euros was even achieved.
40 percent price drop in just two days
So happy in disguise? In fact, falling prices are now playing into the business’ hands. On Tuesday morning, electricity prices fell sharply for the second day in a row. Although the price is still 630 euros per megawatt hour, this corresponds to a minus of almost 40 percent in just two trading days.
The gas price also fell by 28 percent in the same period from 339 euros/megawatt hour to 245 euros/megawatt hour.
Reaction to the advance of Von der Leyen
However, the development is not a coincidence: on the one hand, prices, which had risen so dramatically on Friday, were no longer “fully explainable,” said Christoph Dolna-Gruber of the Austrian energy agency via Twitter. On the other hand, the markets are apparently reacting to the announcement by EU Commission President Ursula von der Leyen that she wants to intervene in the market in the short term.
Compensation for merit?
The reason for the price drop is therefore probably in the assumption of traders that the market will be intervened. It remains to be seen what such an intervention at EU level will look like – the longer term perspective could be particularly interesting here.
Von der Leyen also held out the prospect of a general structural reform of the electricity market – this could mean replacing the current merit order system, which had recently exacerbated current antics in electricity prices.
Source: Krone
I am Ida Scott, a journalist and content author with a passion for uncovering the truth. I have been writing professionally for Today Times Live since 2020 and specialize in political news. My career began when I was just 17; I had already developed a knack for research and an eye for detail which made me stand out from my peers.
