Electricity prices on the screen of a smartphone in Turku, Southwest Finland, on 4 January 2023. The Consumers’ Union of Finland has urged the government to revamp the energy system to ensure low-income households especially are guaranteed access to reasonably priced electricity. (Anni Savolainen – Lehtikuva)
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MEASURES to restore consumer confidence in the energy system are required after the recent spike in electricity prices, according to the Consumers’ Union of Finland.
Juha Beurling-Pomoell, the secretary general of the Consumers’ Union, on Saturday outlined to YLE that the energy system should be amended in a way that ensures consumers are not faced with outrageous electricity prices, such as the over two euros per kilowatt hour witnessed last Friday.
The spike was the result of frigid weather and disruptions at a number of power plants in Finland.
“Many consumers are really aggravated that spot prices as high as these are possible given that electricity is principally being produced at a significantly lower cost. Our electricity production has also increased recently to the extent that we’re theoretically self-sufficient,” he said to the public broadcasting company.
The Consumers’ Union is not of the view that government subsidies should be a given. Instead it is an advocate of a system that would guarantee electricity at a certain price to low-income households with electric heating in circumstances where electricity is not available at a reasonable cost. Such a system is in place in, for example, Norway.
The guarantee would be triggered when spot electricity prices threaten to surge due to a long-standing disruption.
“The government should start drawing up a new system immediately,” said Beurling-Pomoell.
Minister of Environment and Climate Change Kai Mykkänen (NCP) stated to YLE on Saturday that securing the production of reliable electricity is one solution to shortages caused by low temperatures. The government, he said, is set to introduce an incentive to encourage investments in non-volatile electricity production, such as hydropower and nuclear power, or large energy storages.
The government could step in to regulate electricity prices or consumption only in exceptional circumstances, such as long-standing disruptions caused by shutdowns of nuclear power plants or damage to cross-border transmission cables.
“All schemes that deviate from determining the price in a market based on the balance between consumption and production create the need to decree who has to reduce electricity consumption,” he reminded.
The Consumers’ Union also pleaded with electricity companies to offer customers flexibility with payments on a case-by-case basis during spikes in prices. Serious payment difficulties are not in the best interests of anyone, added Beurling-Pomoell.
He also acknowledged that consumers are responsible for making sure they understand their electricity contracts.
“There’s a risk that you’ll be faced with outrageously high spot electricity prices. But on the other hand, you can also be faced with very low, even negative prices. It’s naturally the responsibility of consumers to understand this,” he stressed.
Aleksi Teivainen – HT
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Source: www.helsinkitimes.fi
