Electricity suppliers unnerved by fluctuating RES surcharge

Despite eventually accepting a government revision last summer that has increased electricity supplier contributions to the renewable energy (RES) special account, suppliers, now feeling troubled by the fluctuating level of contributions they are expected to pay, want an upper limit set as a form of protection.

Government officials, who have not responded to the request, described the uneasiness being felt by suppliers as unnecessary in comments to energypress.

The measure was introduced to cover the RES special account’s persisting deficit that threatened to devastate the energy market or lead to excessive surcharges for consumers through a RES-supporting ETMEAR surcharge included on electricity bills.

Suppliers were unnerved by sharp increase of their RES contribution during the first two weeks of November. These payments are determined by a market-based mechanism whose results are influenced by the System Marginal Price (SMP) as well as the Virtual System Marginal Price – the SMP level if RES systems did not exist.

In October, the RES-related surcharge for suppliers, which is revised weekly, averaged 4.4 euros per MWh. It skyrocketed to 12 euros per MWh in the first and second weeks of November before plummeting to 3.4 euros per MWh in the third week.

Since its introduction, the surcharge has averaged 6.3 euros per MWh, justifying a study conducted by the Aristotle University of Thessaloniki. Used by RAE, the Regulatory Authority for Energy, in its calculations, and the government, as a decision-making guide, the study had proposed a level of 6.5 euros per MWh.

Sector authorities have noted that suppliers should be paying closer attention to how the surcharge level averages out rather than its weekly level. Factors such as electricity production unit withdrawals and weather-linked electricity demand levels influence the surcharge level.

In essence, the method being applied requires electricity suppliers, especially main power utility PPC, the dominant market player, to return a portion of profits gained as a result of lower SMP prices.