Gov’t aims to increase subsidy support to €450m per month

The government will seek to increase the value of its electricity subsidies to 450 million euros a month with the aim of lowering electricity prices for consumers to pre-crisis levels, when they were as low as 17 cents per KWh, roughly half the current levels of 30 to 35 cents per KWh, sources have informed.

The plan will begin taking shape as of July 1, when the government introduces price caps for electricity producers, whose windfall profits will be taxed to help fund the energy-crisis battle.

The overall effort will require government officials to be vigilant for fiscal leeway as figures in this domain can fluctuate from day to day.

Government officials have estimated that revenue from the EU’s Emissions Trading System could reach an annual sum of between 3.5 and 4 billion euros. This, however, will not suffice to fully cover the administration’s energy-crisis plan, meaning the government will also seek to utilize state budget money and all available EU support programs.

There is some concern about the government’s calculations for the second half of the year as they are based on the assumption of wholesale electricity price levels at 225 euros per MWh. However, the ongoing tension between the West and Russia over its invasion of Ukraine has driven wholesale electricity prices even higher, currently at 306 euros per MWh.