The key to social measures must be facilitating access to solar panels and heating even for low-income households and municipalities, so that as much of society as possible ceases to depend on an erratic market. Photo by Marufish, flickr
Ministers from the countries of the European Union agreed on Friday on the basic principles of the plan to reduce electricity prices to an acceptable level. The main solution is to determine the maximum price of electricity from sources other than gas, which are the most expensive due to expensive gas and the uncertainty regarding its supply, and thus determine the price of electricity on the market, as it is derived from the most expensive source.
However, nuclear reactors, wind turbines, solar panels or coal blocks have much lower costs for electricity production and their owners logically have fantastic profits. The capping would work in such a way that these power plants would transfer the profit above the given limit to the states. The price of electricity on the market would therefore remain very high, but the states would gain new means to deal with social impacts.
The ministers considered the second way, i.e. capping the price of natural gas for the production of electricity, which would lead directly to a reduction in the price of electricity on the market. Such an approach, which may still be applied as a supplement, would not require the subsequent redistribution of money, which is the main disadvantage of a winning solution. The disadvantage can be mainly in our country, where we have experience with an unsuccessful savings tariff, which showed that a lot of money can be wasted with little effect, without solving the problem in any way.
At the same time, it is a chance to repair the most important subject of the current political school — that is, the targeting of support to prevent hundreds of thousands of households from falling into poverty and the subsequent earthquake in the entire society. At the same time, the Czech government has already announced that it wants to cap energy prices at the national level as well. This is a solution that follows on from the European one in a meaningful way.
Money from excess profits can be used for just such a measure. But it is necessary to avoid the development that occurred with the savings tariffs. In fact, it is necessary to go back to the very beginning, to what was proposed, for example, by the RAINBOW Movement already in the spring.
A social tariff, or rather social discounts on energy targeted at households with low incomes and high energy costs, should be offered. These are numbers that the state and energy suppliers have, and it is therefore possible to automatically select vulnerable customers and include them in the discount.
It is time to abandon the electricity “market” delusion and abolish it
Capping prices for others can be inspired by the original idea of a savings tariff, which was supposed to subsidize the price of some basic amount of energy and leave everything above that at the market price. The purpose is simple — to motivate savings or savings measures. Overall, it is important that while reducing the resulting prices, the motivation for saving and purchasing one’s own energy sources — especially solar panels on roofs — remains.
It must be said that interventions in the electricity market and setting prices for consumers are just buying time. And that time must be used to the maximum for careful home insulation or the installation of photovoltaics. And above all, it is finally necessary to make such investments available to low-income families who do not have the means to pre-finance and co-finance them.
For this, more money is needed for larger subsidies and professional energy advice. That is why it is also necessary to let go of the appetite for a non-functional solution, such as an artificial reduction in the price of emission allowances, which would bring only a slight price reduction, but at the same time would deprive the Czech Republic of hundreds of billions to solve the problem we are facing and whose name is dependence on fossil fuels.
Ideology needs to be thrown aside and numbers should be followed. She speaks clearly: it is necessary to resolutely intervene in the electricity market, to provide targeted help to people threatened by rising prices, and in the next step to enable households, municipalities and companies to reduce consumption and develop their own energy production in order to reduce their dependence on fossil fuels and the unpredictable energy market .
Source: Deník referendum by denikreferendum.cz.
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