If the electricity sellers have predicted next winter’s consumption incorrectly, they may incur large losses.
In my circle many have been happy in recent weeks: a five-cent electricity contract, valid well into next year! If you have managed to make a cheap contract before the start of the rise in energy prices, you will get kilowatts priced at 5–7 cents throughout next winter.
There are also examples to the contrary. Those whose contracts are about to expire in the fall are in a difficult situation. New fixed-term contracts are currently at their worst up to 50 cents per kilowatt. It can be difficult to get an offer for a reasonably priced detached house with electric heating. Mainly stock exchange electricity is available.
Kilowatt hours it’s difficult for many to figure out, so the same in euros.
At the price of five cents of electricity, heating a single-family house costs a ton per year. If the price rises to 25 cents, the cost will already rise to five tons per year. An additional expense of four tons is a big blow to anyone.
For a district-heated townhouse resident, the same change is from 200 euros to 1,000 euros per year. On the other hand, in Helsinki, for example, Helen just announced the increase in district heating prices, which will soon be reflected in the company’s compensation.
In an apartment building in the heat of the earth, the price of electricity rises only a few hundred per year.
Cheap however, having a contract in your back pocket is not a sure guarantee that there will be no surprises in the winter.
Even if electricity costs the consumer a few cents, a company operating in the market has to get electricity from somewhere. If the seller has been responsible, he has bought in advance the electricity he will sell in the future – i.e. he has protected himself against the price risk either with his own production or with derivatives.
Next winter, it will become clear how different companies have succeeded in predicting the future.
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A couple of electricity sellers have already stopped operating.
In principle, customers’ electricity consumption is predictable, but severe frosts, for example, may increase electricity consumption significantly. If the companies have grossly miscalculated, they may incur large losses.
A couple of electricity sellers have already stopped operating in Finland. Energia 247 closed last year citing financial difficulties. Lumo Energia recently did the same, due to the difficult market situation.
If the electricity companies have been careless, there may be more terminations and transfers of too cheap fixed-term contracts to more expensive prices.
The Energy Agency supervises the operation of the energy market in Finland. Hopefully the supervisor already has a good picture of whether the electricity companies have acted responsibly.
The author is the director responsible for journalistic development at HS.
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