Renewables

North Macedonia to reinstate cheaper afternoon power tariff for households

Ballpoint pen showing electricity meter readings.

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Published

June 29, 2023

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Published:

June 29, 2023

Country:

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Two years after abolishing it, North Macedonia plans to return the daily period of cheap electricity for households, between 13:00 and 15:00.

The power distribution company will need to adjust old household electricity meters manually to start calculating a cheaper daily tariff, according to President Marko Bislimoski of the Energy and Water Services Regulatory Commission of North Macedonia (RKE). He told Pari in an interview that the rate would be reintroduced on December 1, for the period from 13:00 to 15:00.

North Macedonian households enjoyed a lower tariff in the afternoon from October 2017 until the beginning of 2022, when the authorities scrapped it due to surging electricity prices. As part of the measures to support small consumers in the energy crisis, the value-added tax was lowered, but on July 1 it will be boosted to 18% from 10%.

The average increase in the bill will be mild as two out of the existing four tariffs will be cut, the government said.

Households are getting smart meters

“We are not introducing the cheap tariff for political reasons, but because of the electricity price signal on all exchanges in Europe, including ours,” Bislimoski pointed out. But everyone may not start enjoying the discount at the same time as some households have outdated meters, he explained. The distribution system operator is tasked with a rapid replacement of old devices with smart meters at its own expense, the regulatory body’s chief stressed.

The adjustment also involves changes in invoicing and software, Bislimoski said. Currently, the tariffs are lower only during the night, from 22:00 to 7:00, and all day on Sundays.

VAT should have stayed lower to act as buffer against electricity price shocks

In Bislimoski’s view, the VAT shouldn’t be increased as the energy crisis is not over, so a lower rate can prevent possible shocks. The power futures prices at the HUPX market in Hungary for 2024 are at EUR 160 per MWh, three times higher than in 2021, he asserted.

Officials have hinted earlier at the possibility of reinstating the cheaper daily tariff. Bislimoski underscored it left a wrong impression that it would happen already in July.

Minister of Economy Kreshnik Bekteshi expressed the belief in February that there would be surplus electricity from renewable sources from May to October. Within less than four years, 700 MW of new capacity will be connected to the grid, he estimated at the time.

A growing number of European electricity markets are experiencing ultralow or even negative hourly prices in periods of mild weather and on weekends, largely due to the surge in solar power capacity and the lack of storage systems. Some suppliers already prevent penalties for grid overburden with dynamic rates for consumers on such occasions, incentivizing them on short notice with low prices to use more electricity.

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