ᐅ Does the electricity market need local pricing to ensure stability?

Hello everyone,

lately, I have been looking into current energy policies and came across an interesting question that I would like to discuss with you. Do you believe that the electricity market really needs local pricing to become more stable and efficient? Energy economists argue that small regional electricity prices are necessary to better regulate the market and address the increasing challenges of the energy transition. Such mechanisms could help minimize regional grid congestion and meet the actual electricity demand more efficiently. Do you also see potential in these local price structures, or are there better alternatives to solving this issue?

I look forward to hearing your opinions and experiences!

Bastelino schrieb:

Do you think the electricity market really needs local prices

These already exist today from local suppliers. Often provided by the regional utilities.

Bastelino schrieb:

to be more stable and efficient?

What do prices have to do with market stability? Are you mixing up grids and prices?

First of all, we need large connections from the places where electricity is generated to the places where it is consumed. The widely discussed power lines. The local grid is currently not always very well developed, but generally manages quite well.

nordanney schrieb:

What do prices have to do with market stability? Are you mixing up supply and prices?

Price stability means no inflation, right? Or am I really confusing something?

Bastelino schrieb:

Price stability means no inflation, right? Or am I confusing something?

Ah, you mean price stability rather than technical stability.

However, that doesn’t change the fact that there are plenty of local suppliers. Nor does it change that the government alone accounts for 40% of the electricity price. Nor does it change that in summer we sometimes produce so much electricity that we have to sell it to other countries, even paying them to take it.
Similarly, purchasing prices tend to be less favorable for small suppliers compared to large ones. And we also cannot influence the prices of gas or oil.