We talked about the price of energy with the renowned economist and analyst from the INESS organization, Radovan Ďuran.
In Slovakia, there is currently a lot of talk about rising energy prices in households, such as electricity or gas. The Minister of Economy “calmed” the public when he said that, for example, gas prices will only return to the level a year ago. Is that really so, or should we prepare for another rise in price?
Next year, the price would not have to jump significantly, because traders negotiated it at lower prices in the first half of the year. For 2023, however, power electricity is sold for 93 euros, significantly more than the prices in the first half of this year. In a year, there may be a more significant increase in prices in household prices.
How long will high prices in this sector last? Is it possible to assume that with the end of the pandemic, prices will also fall to their original values?
It is not easy to assign weight to the individual factors that triggered price increases. The pandemic has rather a small impact, compared to 2019, we do not see a radical increase in electricity consumption (even this is not possible). Electricity prices need to be seen in particular in the context of commodity markets and policy decisions. China is not catching up with coal, there is no wind in Germany, gas consumption is rising due to the shutdown of coal-fired power plants, the European Commission is reducing the volume of allowances every year and increasing the pressure to reduce glass gas emissions. All this affects the rise in electricity prices and is not related to the pandemic.
Does Slovakia not expect an even bigger price catastrophe, as the Slovak energy system is generally unsustainable? In a year, we consumed 30 terawatt hours of energy, while our domestic power plants produced only 29. So we have to find the remaining energy abroad.
Not. Firstly, the launch of the new Mochoviec is expected, secondly, Slovakia has robust cross-border connections and thirdly, a beautiful feature of the market mechanism is that the price balances demand with supply. Part of the consumption, due to its cost at higher prices, simply falls out.
Is it not time to switch to sustainable energy sources, as we produce most of our electricity in nuclear power plants, where fuel is again sought from abroad?
Sustainability is a mythical word that everyone interprets differently. In the first half of the year, German wind farms produced a quarter less electricity than a year ago. It is this instability of power that increases the instability of electrical systems and increases the requirements for the existence of conventional sources of electricity.
The same applies to gas, which we import almost exclusively from abroad. Isn’t it better for Slovakia to think about solar energy or something like that?
The Slovak economy cannot rely on RES (renewable sources, ed. Note). The Slovak potential for wind and sun reaches about a third of the annual electricity production. The state should simplify investment in RES and remove regulations that hamper this – but it should avoid subsidies. Today’s price of electricity is a sufficient incentive.