A lot of my friends took a gamble over the winter, choosing to take the spot price electricity, over a contracted price. On many days, that is a great call as the spot price can be half of what I am paying per kWh, but on some days, it isn't such a great call at all - like tomorrow.
Yes... that is €2.35 per kWh.
The average price for tomorrow is €1.10. What this means is that if we were on spot price, on average we would be paying almost 12x as much for electricity. And what we use at the peak times, would be 25x as much. Heating a large house takes a fair amount of kWh, especially when it is -29°C outside. So, as we are heating our house from scratch due to the system problems, we can expect that tomorrow we will use about 200 kWh, so in one day, the price, without transmission costs, would be €220, which is about the same in US dollars.
For reference, that is what I paid for a gas heater, a new 10kg composite bottle and the hose connector today.
For another reference, that will fill my 65L car tank up 1.8 times.
This is the highest electricity prices have ever been in Finland, but the average today was 28 cents, and since the middle of December, it has been about 16 cents. We are on a contract at 9 cents. And we took the contract knowing that it is a gamble, because we will be paying the same price for kWh even in the summer, when the prices will be much, much lower. Though we won't be heating our house at that point, so our consumption drops dramatically. For us, the decision was for peace of mind and to keep a relatively predictable bill.
Two similar days in a month like tomorrow, and that is the equivalent to a month worth of electricity costs for us, and that is significant. Five days, and it is half an average salary worth. But, people are now stuck between a rock and a hard place, essentially playing a game of electric chicken with the prices.
Because they have made the decision to stay on spot because the assumption was that the new nuclear plant would give adequate supply, they have a sunk cost. And, the longer they go, the more they sink in, with the hope that prices will come back down and level out. And they well might, over the space of the next year, but how different will the overall price be, and how much stress has it caused them when the prices are so incredibly high?
I suspect, the difference isn't going to be that great once averaged out.
However, the people on spot prices are going to have to find the money to pay their bills now, not as an average later. This means that in the coming month, there are going to be people who are going to need to pay up to 20-30% of their total income more, just on increased electricity prices. They aren't getting anything more for this price, and it is unlikely that they will increase their earnings to cover it in the next month so they don't have to sacrifice their savings or lifestyle, which means, their spending is going to go down dramatically.
While the electricity companies are making record profits on the back of this, the rest of the economy is going to suffer further, as people trim back on their lifestyles to cover the increased costs of living, or go further into debt. Either way, the distribution of wealth narrows at a faster pace, with less in the hands of the majority, and more in the pockets of the minority.
There is no reason for the prices to be this high, because Finland is producing more energy than it has earlier, and the demand isn't significantly higher than other times. And, it has been cold before. Yet, there are constant excuses as to why the prices are so high, even though none of them are valid. It is just another money grab, taking advantage of people who trusted them when they said "the supply is good".
Maybe they should have questioned if it is good for the consumer, or the corporations.
Fluctuations in prices are to be expected, but just imagine if you went to fill up your car one day, and instead of $100, it was $2500 - and you had to fill up. While they are talking about conserving electricity, there is very little people can actually do in these situations, because the majority of the consumption is on heating, which as I have learned intimately, is a necessity. You can drop the temperature in the house slightly for a day or two, but too much and it becomes unlivable at these temperatures. We conserve energy where we can already, because 9 cents a kWh is still expensive, but we can actually affect our bills that much through using less.
For some of my friends, this is more of a large annoyance, as they are in apartment buildings, so their consumption is relatively low and it is often district heating, which is far cheaper. But, for a few others with standalone houses, they are going to really feel these days in their paychecks and savings, especially as it is right after Christmas and they are likely a little depleted already.
Personally, rather than all the money spent on military, I think that it should be spent on developing clean, cheap energy. There shouldn't be a lot of profit in energy creation and distribution and rather, the money should be made on what that energy enables. But, that isn't going to happen, because there is so much money in keeping people scared enough, that they accept buying weapons instead of wellbeing.
Maybe that is for another article though.
Taraz
[ Gen1: Hive ]