In October, the EPDK did not apply the expected increase in the energy prices, the suppliers of the OIZs started to cancel the energy procurement contracts due to the losses they are exposing. The OIZs, on the other hand, start purchasing their electricity with high tariff prices in order not to interrupt their production. Enexion Energy Consultancy Managing Director Ceren Özdal emphasized that the fixed-price contract period in the liberalized energy markets will also draw to the close.
Energy purchase prices has not been increased in spite of expectations in October, and it is announced that it will not be a case until the beginning of this year. Major industrial firms, especially in the organized industrial zones (OIZ), which have made annual electricity contracts with fixed prices, are also negatively affected.
The expected raise is not applied but the industrialist is still unhappy
Enexion Energy Consultancy Managing Director Ceren Özdal noted that although the government retained the tariffs unchanged during October, some entrepreneurs are not happy with current status. Industrial contracts, especially those that ensure a fixed and discounted price for OIZs, have been canceled. In this regard, Mrs. Özdal stated that many industrialists began to change to the national tariffs in which they trust in the current situation, also added that the private sector suppliers cannot offer more affordable prices than the national ones at present.
Consolidation of suppliers is inevitable
Noting that the fixed prices are no longer sustainable with the liberalization of energy markets, and both consumers and suppliers are victims of this ongoing policy, Özdal stressed that the long term purchasing-at-a-fixed-price period will soon come to an end. Özdal has also noticed that the liberalization of energy market causes significant changes on the supplier side, leads to the consolidation of suppliers in the medium and long term. Thus, only big players succeed in preserving their positions.
Risk management is crucial
Ceren Özdal stated that there are a lot of players in the electricity market and it is difficult to assume the fact that during the year there is an excess supply and therefore low prices; and in some times it can lead to tight supply and high prices. Explaining that electricity prices could be different than predicted depending on such factors as the amount of investments, fuel prices and seasonality, Özdal reported that it is critical that both suppliers and industrialists manage their risks well. “The need for derivative products will increase in order to protect the participants in the electricity market, especially the market, from risk and to realize their investments in a safer way,” Özdal said.
