In more recent times, Greek industry has managed to make a series of energy cost gains following years of disputes prompted by what was a chaotic and unprepared liberalization of the high-voltage electricity market in the years following the millennium. The recent gains have generated some optimism in the sector.
However, the industrial sector has suffered numerous closures amid the country’s deep and extended recession. More still needs to be done in terms of industrial energy costs.
Constructive measures must be taken amid these adverse conditions to encourage industrial investments and revive Greek industry, until a few years ago the country’s biggest provider of jobs.
Industrial sector officials believe the lack of consistency and predictability of energy costs is a key factor behind the absence of industrial investments. Long-term industrial investments requiring years, if not decades, for returns on investment cannot be made amid an environment of unpredictable energy costs, let alone the prevailing instability in tax and labour costs, sector officials contend.
The level of uncertainty concerning energy costs, especially, will have fully returned by the end of 2017 when the “disruption management” plan – enabling energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by the power grid operator – is scheduled to expire. Also, electricity supplier surcharges are expected to be rolled over to consumers.
These two developments, alone, are expected to increase industrial energy costs by 11 to 20 euros per Mwh, sector officials estimate, which would once again place in doubt the hard-fought competitive edge gained in recent times by the industrial sector for improved electricity costs.
Industry needs steady, long-term agreements that will pave the way for investments. If investments are not being made at present, this is because energy cost agreements are limited to two-year periods while government measures taken for the industrial sector are short-term, according to one industrial sector official.