Competition and free market: possible victims of high energy costs?
By Francesco CALABRETTA
Cluster Leader Italy and Hungary Audax Renewables
As many had predicted, the expensive bill It's turning out to be anything but a temporary phenomenon (I talked about it too here And here). After the significant pre-summer increase, which saw the first government intervention to lower prices, the situation has not changed positively. On the contrary.
A crisis, the current one, which has profound, diversified causes which widely go beyond Italian borders, reducing - in fact - our margin for intervention. What remains, unfortunately, are the direct and indirect consequences. Therefore, in addition to the impact on families and businesses, which are increasingly struggling to keep up with significant increases in tariffs, there is also a generalized price increase of goods and services due to the increased price of the energy needed to produce them. In this sense, nothing is more explanatory than the abundant flow of news and social comments on the probable increase in the cup of coffee to 1.50 euro cents.
What makes this situation more full of negative implications is that it burdens more aspects of our lives: as citizens who consume energy every day, as consumers who purchase goods and services (from shopping onwards) and possibly as entrepreneurs, it doesn't matter whether they are micro or large companies.
Looking at this last aspect we discover that according to the estimates of Confindustria, Italian companies will shell out 37 billion euros in energy in 2022. In 2020 the figure was 20 billion and in 2018 8 with natural gas which in the meantime has increased by 700% compared to 2019.
And, in fact, in the past months, concerns have focused more on holding many activities, with particular interest in sectors such as manufacturing, agri-food or that composite galaxy that are artisan micro-enterprises.
At the same time, however, little or very little has been said about something that is not just a prediction, but already a fact, namely bankruptcy or the great financial difficulties faced by various energy sales company in half of Europe.
To tell the truth, the specialized media had begun to spread news about the closure of supply companies, especially in the United Kingdom where, since returning after the holidays, some sales companies had gone bankrupt, crushed by the debts incurred for the purchase of raw materials ( gas in particular) at unsustainable prices. In October, for example, two companies such as Pure Planet and Colorado Energy closed their doors, forcing the 250 thousand users served to find a new supplier. An operation that is proving to be anything but simple, given that most of the larger suppliers are already taking on a large number of new customers from other failed companies (Sole 24Ore). And beyond the accusations of attributed errors At Ofgem, the energy authority across the Channel, today we have reached almost 30 operators forced to close.
It's not better in the countries of the Union, an area particularly affected by the increase in prices, especially of gas. Second Bloomberg I'm beyond 40 the society who have declared bankruptcy: from Germany to the Czech Republic, passing through the Netherlands, Belgium and Finland.
In Italy the context is taking on worrying contours, considering the various suppliers have ended up in serious difficulty. Among these are the cases of Gas & Power Care, an energy sales company from Faenza, and Alpherg, a trader born in 2018 from the joint venture between Enoi and the multinational Trafigura.
The situation, as can be understood, is constantly changing and it is not clear what will happen in the near future. Much also depends on the national plans to counteract the effects of high energy prices and, above all, high gas prices (as emerges from the Relationship which the European Commission published at the beginning of 2022). However, there is some evidence from which it is useful to start if you want to tackle serious reasoning.
First of all, the advantageous "fixed price" offers proposed by free market operators to attract customers have proven to be a critical element for operators forced to maintain the same tariffs even in the face of violent fluctuations in energy prices.
In secondly, these offers which have generated competition and benefits for the consumer - free to choose the best solution - are putting into difficulty especially those subjects with "poorly covered" shoulders from a financial point of view, much more exposed to suffering the consequences of negative economic conditions .
In third place, government measures such as the possibility of paying the bill in installments ten times, if on the one hand it is a socially just measure to meet the difficulties of those citizens most affected by the crisis, on the other it cannot be placed on the shoulders of groups and companies alone private individuals already proven by important bank exposures for the purchase of raw materials.
Without wishing to repeat the now trite saying according to which "every crisis gives rise to an opportunity", today's situation is an opportunity to discuss which path to take. I say this knowing that I am part of an international group, Audax Renovables, strong in a solid financial situation and protected by far-sighted choices made on the subject of energy purchasing.
In summary, the options There are essentially two on the table. One, support a liberalized market in which a plurality of competitors operate capable - each according to their own initiative - of proposing different offers. Two, let it pass when it is happening without making corrections and see, once the storm is over - when it will end - how many subjects are left standing. With the risk that the consumer will, at that point, find himself having to decide between a small group of operators, with competition as an increasingly less central element.
