Domestic energy-intensive reached a dead end industriessince low-cost fixed contracts expire on December 31st. Current what they signed with checkpoint before the energy crisis hit and they are subject to unpredictable price fluctuations in the wholesale market. Large and internationally competitive companies in the country cannot use the only tool to ensure stable electricity prices in the long term, which is bilateral contracts with producers. RES or with vertically integrated companies that can weigh their production costs and offer the best price. This opportunity finds a “wall” in the ceiling imposed on the compensatory price of renewable energy in the wholesale market as part of the mechanism for collecting excess profits and financing subsidies implemented from July 1. This issue was raised by EBIKEN in a series of letters to the Department of Energy asking for intervention to remove bilateral contract production from the ceiling. In the case of bilateral contracts, the producer’s income is identified with the contractual and usually fixed price agreed with the buyer. The price offered by the manufacturer must deviate significantly from market price fluctuations in order to be an incentive for the buyer. However, given the ceiling, the manufacturer cannot offer such prices, as its income is limited.

For example, suppose a renewable energy producer has agreed to sell industries at a price of 60 EUR/MWh. With a ceiling of 85 EUR/MWh that applies to RES, the producer receives 85 EUR/MWh from the market and returns the difference of 25 EUR to the buyer. In the meantime, the buyer will pay his supplier €250/MWh (wholesale price), which means that the final price will differ from the market price by only €25. The ceiling mechanism effectively deprives the producer of the income that would allow him to take the risk of long-term fluctuations in wholesale prices and offer low and stable prices through a bilateral contract. While the foreign ministry’s political leadership appears to be aware of the problem, it is not ready to intervene, at least not yet. The main reason is the impact of the exclusion of bilateral contracts on the income of the Energy Transition Fund, which will be significantly reduced. However, the industry side believes that the ministry will be forced to intervene, and this is due to the fact that it must be adapted to the recent European Council regulation, which clearly states that it is necessary to set a ceiling for bilateral contracts. on the real income of the producer, which obviously arises after the final liquidation of the bilateral contract, and not on the temporary income that he receives from the stock market.

The problem with bilateral contracts, in addition to industry, is also pointed out by representatives of the renewable energy market. Long-term bilateral contracts are a “passport” for bank financing of new projects. There is a big shift in the market between renewable energy producers and business, and according to information, preliminary contracts for several megawatts have been signed, but they cannot continue if they are not taken out of the cap.