A succession of electricity cost increases between 2008 and 2013, totaling 60 percent, has made the cost of electricity for consumers in Greece Europe’s most expensive.
A study conducted by ACER, Europe’s Agency for the Cooperation of Energy Regulators, and CEER, the Council of European Energy Regulators, presented last week in Brussels, showed that Greece is at the top of an unenviable list of Europe’s most expensive countries in terms of electricity cost increases, averaging ten percent per year over the six-year period until 2013. The study primarily attributed the development to taxes and indirect surcharges.
Electricity cost increases have been widespread throughout the EU’s 28 member states, but at a lower rate than Greece, averaging 4.4 percent per year, despite lower wholesale price levels. The consequences in Greece have been alarming with unpaid overdue electricity bills currently at a record level of 1.7 billion euros. Officials at PPC, the Public Power Corporation, have been forced to negotiate pay-back adjustments at a frenetic pace.
Besides higher electricity rates, consumers have had to struggle with increases to the Public Service Compensation (YKO) surcharge and a greenhouse gas emissions surcharge subsidizing renewable energy source (RES) producers. Although the actual cost of electricity in Greece has risen at an annual average rate of seven percent, indirect surcharge and tax increases have risen by an average of 13.8 percent, according to the study.
Greek consumers have a choice of four electricity supply companies, based on 2013 figures, compared to 376 suppliers in Germany, 204 in Finland, 124 in Denmark, 77 in Poland, 71 in the Netherlands, and 30 in Italy.
The study showed that RES-related increases were significant in countries with the highest electricity cost increases between 2012 and 2013. Greece and Lithuania are prime examples. In Greece, RES-linked increases reached 119 percent, Europe’s highest, while Lithuania followed with a 44 percent increase.
In terms of actual amounts paid for electricity, Greece remains at the EU average level, while Denmark topped the European list. Households consuming 4,000 KW annually pay 1,221 euros in Denmark, according to the study. Based on this consumption level, the cost is 1,204 euros in Germany, 1,090 euros in Italy, 947 euros in Cyprus, 901 euros in Ireland, and 698 euros in Greece, ranked 14th among the 28 member states.
The study showed that competition appeared to be most effective in the electricity markets of Denmark, Finland, Germany, the UK, Italy, and Norway. As for the natural gas market, such was the case for the UK, the Czech Republic, the Netherlands, Germany, Slovenia, and Spain, the study noted.
The recession in Greece has led to a sharp increase in the number of households needing special terms for electricity. Over ten percent of Greek households have become eligible for lower-rate electricity supply programs. Malta and Romania are at similar levels, while, at the other end, the rate in Ireland, Lithuania, Portugal, and Slovenia is at about two percent.