European Union seeks flexible household electricity prices

The planned reform of the EU energy sector has a new sub-goal: making household electricity prices more flexible. At least that is what European Commissioner for Energy and Climate Action Miguel Arias Cañete said at the annual energy conference organised by the Eurelectric association.

One reason for promoting flexible household electricity prices is the variable output of renewable sources, which depends heavily on current weather conditions. This is also increasing fluctuations in electricity prices. Moreover, their impact on electricity prices is constantly growing, and households should therefore also have the opportunity to respond to price swings.

According to the new president of the Eurelectric association, this is a logical step resulting from the growing share of renewable electricity sources, while fixed prices should remain available only under special tariffs.

„Due to the current evolution in the energy sector, it is becoming increasingly difficult to set a single electricity price for everyone“
Antonio Mexia, chief executive of EDP-Energias

Unlike airfares and other services, household electricity prices are generally fixed and have no real link to current wholesale market prices, which are affected by seasonal and daily fluctuations in demand.

According to the European Commissioner for Climate Action and Energy, households should be able to benefit from variations in electricity prices on day-ahead markets, which would make it possible to reduce household consumption and their electricity bills.

„In some countries, contracts linked to electricity prices on the spot market are already available, and in Sweden and Finland customers can save up to 30 % on their electricity bills with them,“
added European Commissioner Miguel Arias Cañete.

In addition to the Energy Union, the European Commission is now also working on electricity market reform, which will be unveiled next year.