Experts warn about the government's energy loan plan; suppliers are unprepared for the changes.
As a result of historically high energy prices The government proposed a loan plan On Wednesday, the additional bill would be spread over several years, and the proposal has received broad initial support from parliamentary parties, who will negotiate with the government on the details before voting on the proposal in the Danish parliament.
The plan aims to allocate up to 45 billion Danish kroner for energy loans, but since the scheme is voluntary, each household will have to decide for itself whether the idea is good for them or not.
According to TV2, Nordea consumer economist Ida Marie Mosby commented that many people have requested such a loan program so they don't have to leave their homes because electricity, gas, and heating will be very expensive this winter. However, she also sees several points that families should be aware of as consumers before accepting this offer: “As a starting point, it’s a good solution, but there are also many uncertainties. After all, we don’t even know what the energy prices will be for the winter. The risk is that people don’t know what bill they’re expecting.”.
Interest at a rate of 2%
According to expert Ida Marie Mosby, it wouldn't make sense to pay interest on the entire amount from the start, as the debt will only increase with each payment. She recommends treating this debt like any other, such as a bank or mortgage, and considering the family's financial situation in the coming years.
15,000 kronor in installments per family
According to the Politiken newspaper on Wednesday, if the government's energy loan framework of 45 billion Danish kroner is used, it means that every household in Denmark could freeze 15,000 kroner as a loan to be repaid within the specified period. Whether this happens depends on how prices develop and how many people choose to accept the offer.
In addition, the distribution will not be equal, as some households will be more affected than others, because gas prices, for example, have risen more than electricity prices, and the government proposal set a ceiling of 2.99 kronor after which the loan can be used. So if you suddenly have to pay 4.99 kronor per kilowatt-hour, then the first 2.99 can be paid immediately, and then the remaining amount will be converted into a loan that can be repaid to the state over five years at an interest rate of approximately 2%.
Lasse Olsen, chief economist at Danske Bank, believes that providing people with financial security at the same time as incentivizing them to reduce energy consumption could lead to increased energy demand.
Energy providers are not prepared for the changes.
It is worth noting that the country's energy companies have stated that, if the proposal is adopted in the Danish parliament, they are not prepared for the changes required in payment systems based on a comparison with last year's bills, and that this will require time that may take several months, including adjustments to collection systems, as it will require spending a lot of resources and money to make changes to the systems.
