Skopje, 26 December 2021 (MIA) – The energy crisis hitting Europe and the reduced national production of electricity are the main reasons why electricity bills for households will increase starting from January 1, 2022. Forecasts over the new price in the regulatory market are different. Some experts and opposition parties have said households will pay higher electricity bills by 38%, while the government strikes a more reassuring tone saying electricity price will rise only slightly and North Macedonia will still have the lowest price in the region. The Regulatory Energy Commission (REC), the body in charge of forming the price in the regulatory market, has said it will not speculate with the process until it finishes all the requests sent to the Commission. It confirmed that all energy companies have sent requests seeking price hike. The Commission by December 31 at the latest should unveil the new electricity price, valid in the first half of 2022. The situation in the liberalized energy market is quite different. Major energy market consumers have been paying rising electricity bills, which is being reflected in the price of products manufactured by most companies, especially those in the food industry. The regional electricity stock market (HUPEX) in Budapest has recorded at one point almost 400 euros per megawatt hours. Last year, it was almost 70 euros per megawatt hours on average. In order to prevent a price shock, the government has frozen the prices of basic foodstuffs, including flour, bread, sugar, milk, cheese, meat, rice, eggs and pasta. The prices remain the same as they were on December 1 until at least January 31, 2022. The measure could be extended. Most countries in the region have taken similar measures. It is expected electricity prices in the European market to stabilize by mid-2022 after hikes due to rising natural gas prices and transition into production from renewable energy sources. Gov’t reassures electricity price won’t rise beyond 10 percent Economic ministers insist that electricity price as of January 1 will not rise more than 10 percent, reassuring that enough power will be provided to ensure normal functioning for the households. “We’ve made all necessary analyses together with other institutions such as ESM, EVN, and MEPSO. According to the analyses, I stick to what I’ve said before – it will not rise beyond 10 percent,” Economy Minister Kreshnik Bekteshi has stated. A new block tariff model, he said, is in the works already so as to establish the electricity price, which would be enforced as of next June. According to the model, the consumers using more electricity will pay higher bills, while those spending less will also pay less. Echoing the same sentiment, Deputy PM Fatmir Bytyqi rejected any speculation by the media and opposition politicians that households will start paying much higher electricity bills next year. In an interview with MIA, Bytyqi, who is in charge of economic affairs, said the country won’t introduce power restrictions in January since there is enough electricity. “I know one thing for sure – we will provide enough electricity for the citizens not only in January, but also throughout the year. It means that electricity needs will not be at risk and that there will be no power cuts. I can guarantee. The government, I know, has done everything in its power to make sure there is no significant price rise after January 1,” he has said announcing the government will continue to invest in renewable energy sources. Vouchers will be handed out to at-risk households to pay their energy bills during the winter, he announced. Some 30%-40% rise in electricity bills, according to opposition leader VMRO-DPMNE leader Hristijan Mickoski prognoses that electricity price will rise around 30% to 40%. “This is far from the truth from what the authorities have been saying that electricity will not rise more than 10 percent,” he has said recently. The global energy crisis, he has said, is also affecting our country and the key mistake the government made is that it allowed EVN Home, the universal supplier, to purchase power on its own instead of including the state-owned company ESM in the process of providing more power. EVN Home, Mickoski said, is a private company. “If the company covered the shortage through ESM, then the state would have been able to help. EVN Home now will not go bankrupt, and what has been already spent will not be covered by the state, but by the citizens instead,” he stated. Another issue contributing to the problem, according to Mickoski, is the poor performance of REK Bitola, the coal-fired power plant, and of the hydro power plans. Instead of accumulating water for the heating season, he claimed, they produced power before selling it over the summer. He explained that during the heating season, hydro power plants should operate with a 50%-60% capacity. “At the moment, it’s much less than that,” Mickoski stressed. Electricity price staying below 10 percent is political decision: experts Some energy experts in the country say the announcement of the government that the electricity price won’t rise higher than 10 percent in January is unrealistic, calling it a political decision. According to professor Konstantin Dimitrov, it is economically unsustainable. “The manufacturing electricity price must be higher because it was EUR 41 per MWh four years ago and ESM is selling to EVN Home for EUR 36 MWh. There’s no logic,” he told MIA. It’s difficult, Dimitrov said, to predict how much of the electricity needs could be covered by national production in the first six months of 2022 because there is not enough coal in the country. In the meantime, Economy Minister Kreshnik Bekteshi was in Kosovo to negotiate the procurement of three million tons of coal for the energy producing plants in the country for the coming few years. Energy Regulatory Commission refusing to speculate Until we have finished the analyses, we won’t speculate surrounding the electricity price paid by consumers in the regulatory market in the first half of next year, Marko Bislimoski, President of the Energy Regulatory Commission (ERC), has said. “We’ve received the requests of all three energy companies. We’re analyzing them in terms of electricity procurement, costs and renewable sources. It’s a fact that both EVN and MEPSO has reported significant rise in costs to procure electricity to cover loses in their networks. This is what exerts pressure the most on the price,” Bislimoski has told MIA. The Commission, he said, could influence only on 37.2% of the final electricity price, adding that the 13.6% increase in the electricity price sold by ESM to EVN Home could affect by nearly 4.5% of the final price paid by buyers after January 1. Insignificant energy investments in the past 30 years causing electricity price to rise The country in the past 30 years constructed the Kozjak hydro power plant, installed power of 80 MW; the Sveta Petka plant with 35 MW power, and the Bogdanci wind power plant with 36.8 MW power – in total the capacities have installed power of nearly 145 MW. The co-generation power plant TE-TO, which is a private investment, was also constructed with 220-230 MW installed power. Other investments were in the sphere of renewable energy sources, such as small hydro power plant, photovoltaics, biogas energy plans with a total power of 200 MW. “It’s a fact that the country in the past 30 years lives on former glory, when three units of REK Bitola were built, as well as REK Oslomej, REK Negotino among others. REK Bitola should have been shut down by 2020, however it continues to operate on coal, which of low quality. We have been reduced to importing coal because we have none at home in order to ensure the production of electricity. It costs more to import coal than to extract,” Bislimoski has told MIA. In the short run, he said, the country needs quick investments. “Photovoltaics is the quickest that can be done. It’s a good thing that more photovoltaics as well as wind plants will be built,” Bislimoski said. Janez Kopac of the Energy Community also agrees that nothing has been invested in energy for years. “Electricity will rise in the coming years, it’s a fact. Issues with the electricity price in the region is that almost all countries in former Yugoslavia, expect Slovenia and Croatia, haven’t invested anything in larger energy producing plants,” the President of the Energy Community Secretariat has said recently. He called on the country to help at-risk households pay the electricity bill when it will start rising. Approving a proposal of the Energy Regulatory Commission, the government in July reduced electricity VAT from 18% to 5%, which enabled household electricity bills to remain the same even though the Commission had made a decision to increase the price by 7.83%. Electricity VAT will remain 5% by July 2022 before rising to 10%. By July 2023, it should again be 18%. Starting early next year, the government will provide 1,000-denar vouchers for 36,000 at-risk households and close to 9,000 low-income pensioners. The Energy Regulatory Commission is expected by the end of December to define the electricity price for households and small consumers provided with power through EVN Home in the first six months of 2022.