Croatia:Why RWE and GENI in Croatia offer dumping electricity price?

17. September 2013. / SEE Energy News

In some countries, in which these two companies operate, the electricity price is two times more expensive than in Croatia. And this, in the expert opinion, has to be equalized one day. With the arrival of Slovenian company GEN and German energy company RWE, which recently presented their lower electricity prices for Croatian households, literally overnight established what were lacking so much – the electricity market in Croatia. Because only a few days later the same things did HEP, whose management until recently claimed that the electricity price in Croatia was too low. And now all of a sudden it turns out that there is space for price cheapening, which is measured in tens of percent. What brings suddenly such a change?

When, for example, we look at the electricity price in European countries it is shown that Croatia really has one of the lowest price of this important energy source even if it compares with incomes or average citizens incomes. From the EU member states only Bulgaria, Estonia and Romania have a lower price than Croatia.

It is interesting how two new companies – electricity suppliers in Croatia operate in the most developed European countries and their price often is two times higher than this offered in Croatia. Therefore, it is more than strange that a one German giant like RWE works on such a small and poor market like Croatia.

Arrival of Slovenian and German companies showed what the market really is,  the only logical explanation why these two companies initially started with dumping prices is in the market conquest and domestic monopolist elimination – of HEP.

But it should not be forgotten that in all European countries the market liberalization actually led to the prices equalization, and good hydrological situation also serves to the current very low price.

In the Slovenian company which is, besides Croatia, also presented as a supplier in the markets of 18 countries (but the electricity offer to the households only in Slovenia and recently here), claimed the purchase electricity price in the countries in which GEN operates are different and may change depending on the weather, hydrology, season and other factors, some of which depend on the local markets.

– This is why we developed a special business model by which we exploit those price differences for the consumers’ benefit and interest and precisely that allows us always to be the most convenient supplier electricity in the market and to keep the leading position in every market in which we operate, say from the GEN.

But experts warn the Croatian citizens to read carefully all the conditions offered by some suppliers as price will change frequently now – usually twice a year. Estimates show how the HEP, GEN-I and RWE will fight hardly in the next years for every Croatian consumer and probably with further price cuts, but in the future it will have to be reduced to a European average. Only that in the future the rise in prices will not be called the price increase but correction.

Source; Serbia Energy See desk

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