February 1, 2023

Hardwood Paroxysm

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Here are all the news arriving from January 2023

While the maneuver was approved in the Senate, in which 21 billion out of 35 were allocated to counter the effects of rising energy prices for the next three months, an action arrives in the Millbrough Decree that ends the truce that was approved last summer. Draghi government between suppliers and customers: The extension until June 2023 to suspend unilateral changes to electricity and gas contracts does not include the renewal of expired contracts. Therefore, the supplying companies can modify the general conditions on the price, subject to only the three months’ notice. With the loss of thousands of families, the price of energy could skyrocket. Such is the impact of a State Council ruling that on December 22 annulled an antitrust moratorium against major companies supplying electricity and natural gas on the free market for unjustified price increases.

Updated prices for the electricity bill for the year 2023

As Assoutenti has denounced in recent days, the decision applies to millions of families who signed fixed-price supply contracts between 2020 and 2021 and which are now heading towards their natural expiration, and could now suffer an abnormal increase in tariffs. “These are the same companies that, as of November 30, 2022, have not paid tax on additional profits, so much so that, compared to the 10.9 billion euros of expected revenue, Minister Giorgetti estimates that only 2.7 have been paid.” – Green Europe spokesperson Angelo Bonelli. On the other hand, the Chamber reduced the number of subjects to which the extraordinary tax on additional profits applies, and limited it to companies with at least 75% of energy revenues, with lesser revenues estimated at about 18.2 million euros. 2023.

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So far, in short, the bad news: But what did the government do next to reduce the cost of energy? Among the measures envisaged are a boost to the bonus for electricity and gas with an increase in the Isee threshold from 12,000 to 15,000 euros, tax relief for energy-intensive companies, and a reduction in value-added tax from 22% to 5% for methane and district heating. Measures that would add to the extension of the zero liquidation period for system fees on electricity and gas and the reduction of the value-added tax on gas by 5%.

However, many of the measures in the budget law are only planned or extended for the first quarter of next year. A relatively mild winter benefits families, but paying bills to those who need it most will feel most dramatically after the winter. However, there is good news.

Good news: Gas prices continue to drop

This time, a hand comes from the markets with the drop in the price of gas, which closed in the Amsterdam market at 81.3 euros per megawatt hour, after it reached 76.2 euros as a minimum. It is the value that the latter reached for the last time on February 11, when Russia’s attack on Ukraine was the worst-case scenario, but it is still 12% higher than last January’s prices, and it was already inflated in the past due to increased demand from China.

Speculation was no longer stopped by the agreement on the cap reached within the European Union on December 19, but by the favorable trend in the climate that made it possible to preserve and even increase European gas reserves. Added to this are the strong winds, which increase the electricity production of wind farms located in Northern Europe, which reduces the consumption of methane for generation. Then LNG deliveries continue, LNG, which, together with flows from North Africa and the Middle East, allows Europe to do without the Russian contribution, thanks to the central position now occupied by Italy which today is able to export almost 1 4/ What you consume. Of the gas imported today, more than 0.65 TWh comes from Algeria, 0.28 TWh from the Kavarziri regasification plant (Rovigo), 0.26 TWh from Azerbaijan and more than 0.15 TWh from the Livorno regasification plant. . Behind them are Libya and Russia, with a rate of 0.11 TWh each, Northern Europe with a rate of 0.1 TWh, and the Panigaglia (La Spezia) gas regasification plant with a capacity of 0.06 TWh.

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Russia returns gas to Europe: Putin is betting on it

Now we will ask ourselves why, if the price of gas falls due to both the climate and the economic slowdown, increases in bill costs are to be expected. Indeed, this may seem a contradiction given what has been said so far but from the beginning of January 2023 the new prices for the Enhanced Protection Service will arrive in addition to the price adjustments for the wholesale market indices (PUN for electricity and PSV for gas) to which most duty-free offers are “tied”.

In particular, with regard to electricity, a decrease in prices (about 25%) is expected for the first quarter of 2023 compared to the current very high prices in the protected market with the last adjustment made at the end of September, when international prices standards have reached their peak historical. For gas, on the other hand, there will be an increase of 20% and it will be valid for consumption recorded in December 2022 (the new mechanism, introduced in October 2022, provides for the price to be set in the following month and not in advance. ) and could be around 1.48 euros per Cubic meters.

“The calculation interval and the different reference period are the cause of the confusion in tariffs – explains the head of Nomisma Energia Davide Tabarelli – for electricity bills, the old calculation system that determined tariffs for each quarter in advance, the reference prices remained the relatively low prices for these days on the first of 2023. Therefore, If these days gas prices remain around 80 euros per MWh, then at the next calculation at the beginning of February 2023 for January 2023 bills we will have 30% reductions.

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