Athens to seek one exemption, revision at crucial EU meeting

Greece will seek one exemption as well as a revision to three European Commission proposals intended to raise funds from the energy market to help households and businesses cover costlier electricity bills when the EU’s energy ministers stage a crucial meeting this Friday.

Greek energy minister Kostas Skrekas will strive for the continuation of a revenue recovery mechanism without a lifting of a price cap on natural gas-fueled power stations.

The European Commission has proposed a maximum price for all electricity generation technologies (RES, nuclear, hydropower without storage, lignite, biofuels and geothermal), with the exception of gas. However, the Greek model has featured a price cap on gas-fueled units since July.

According to sources, if Greece is unable to keep its price cap on gas-fueled units, then a surcharge of 10 euros per thermal MWh of natural gas quantities used by electricity producers will be imposed. This measure, announced last week, would raise 400 million euros annually, market officials have estimated.

Greece is also expected to seek revisions to a Brussels proposal aiming for a reduction in  electricity demand. Athens, sources informed, wants Brussels’ proposal for a 5 percent electricity consumption demand to be optional, not compulsory, as the European Commission has proposed. Major Greek industrial players have reacted against this measure, citing reduced competitiveness abroad.

Greece will adopt an extraordinary 33 percent tax on windfall profits earned by Greek refineries in 2022, Brussels’ third measure, the energy minister informed during a SKAI TV interview on Saturday.

 

Price caps a risky solution, expert warns, proposing filters for bids

A leading energy market expert, professor Alex Papalexopoulos, has reiterated his opposition to a complete reform of the European electricity market, believing proposals currently being tabled will lead to perilous conditions.

Speaking at the 17th IAEE European Energy Conference, Dr. Papalexopoulos, the architect behind Greece’s target model, noted markets are signaling the need for reduced dependence on natural gas, representing too great a share of the energy mix.

The European electricity market needs reforms, but not in the manner currently being discussed in Brussels, Dr. Papalexopoulos contended. Instead, revisions should focus on issues such as flexibility and back-up solutions, the expert noted.

Dr. Papalexopoulos pointed out that US wholesale markets are equipped with special filters that examine offers submitted by gas units and determine whether these have the potential to manipulate the market. Equivalent filters do not exist in Europe, resulting in excessively high prices, he noted.

Dr. Papalexopoulos expressed doubts about price caps and recovery of windfall profits, noting they actually do not exist.

 

Budget spending on subsidies tightened for rest of year, 2023

The state budget’s capacity for electricity and gas subsidies is set to tighten as the government is determined to limit their total cost for 2022 to 1.8 billion euros, after having already spent 1.3 billion euros this year.

Government support measures worth 1.1 billion euros for October include no more than 100 million euros in budget money, slashed from 600 million euros in September.

The government plans to limit its budget allocations for electricity and gas subsidies to a total of 500 million euros from now until the end of the year, or between 160 and 170 million euros per month. The same level of budget spending on energy subsidies is expected in 2023.

A draft budget for 2023, to be submitted to parliament in the first week of October, includes an extraordinary amount to help get the country through the year’s difficult first few months of winter and early-autumn weather.

According to sources, this extraordinary amount will total between 400 and 500 million euros, or 80 to 90 million euros per month, clearly not enough if Russia’s war in Ukraine and the energy exchange turbulence continue.

All will depend on how international gas prices develop. Gas futures for 2023 were at 169 euros last week, 200 euros a few days ago, and 188 euros yesterday. Prices have been fluctuating between 20 and 40 euros per day.

 

 

Ministry, power producers to discuss diesel as alternative

A leading energy ministry official has scheduled, for today, a teleconference with electricity producers operating gas-fueled power stations to discuss the prospect of emergency diesel supply for alternative generation purposes should natural gas imports encounter issues.

The energy ministry’s secretary-general Alexandra Sdoukou and producers will  overview the supply chain to be activated for diesel as an alternative liquid, if market conditions require such action.

Previous thoughts by officials for power stations to partially run on diesel fuel, a few hours per month, to help ease natural gas demand, appear to have been abandoned as producers have raised concerns about various complications.

Instead, diesel will only be used as an alternative fuel by gas-fueled power stations if gas imports reach perilously low levels and the country enters a period of heightened alert. RAE, the Regulatory Authority for Energy, will need to approve the switch by producers to diesel.

Five gas-fueled power stations in Greece are equipped to also run on diesel. Power utility PPC operates one of these in Lavrio and another in Komotini, Elpedison operates two more, in Thisvi and Thessaloniki, and Heron operates such a unit in Viotia.

Experts have previously informed energypress gas-fueled power stations can run on diesel for a maximum of five days per month without any technical issues or maintenance needs and 40 days a year. This limitation is necessary to avoid excessive soot accumulation and facility underperformance, the experts noted.

 

PPC holding back on lignite generation ahead of winter

Power utility PPC has gradually been switching off its lignite-fired power stations in order to build up on lignite reserves at these facility grounds ahead of the upcoming winter season.

PPC is aiming for a lignite accumulation of approximately 2.5 million tons. The power utility’s current lignite reserves total 2.15 million tons. If PPC’s 2.5 million-ton winter objective is to be reached, the company’s lignite mines will need to operate at full capacity over the coming weeks, extracting amounts of 35,000 to 40,000 tons per day.

All seven of PPC’s lignite-fired power stations were operating at full capacity during summer’s peak periods. Now, just two of these units are operating, Agios Dimitrios III and V.

Agios Dimitrios II is undergoing maintenance, while Agios Dimitrios I and IV are on stand-by. Melitis is currently sidelined by a technical fault but is expected to be become available again on October 3. Megalopoli was closed for days but has become available as of today, if needed.

PPC’s lignite reserves have dwindled following strong demand during the summer, when PPC’s lignite share of the energy mix reached as high as 25 percent.

 

 

 

DEPA Commercial gas storage in Italy, Bulgaria, 200,000 MWh

DEPA Commercial has stored away, at facilities in neighboring Bulgaria and Italy, natural gas quantities for a total of 200,000 MWh, slightly less than one third of the 622,440 MWh the company is expected to store through a Preventive Action Plan established by RAE, the Regulatory Authority for Energy.

DEPA Commercial began its effort by storing natural gas at Bulgaria’s Chiren facility and, over the past 15 days or so, has also been storing away gas quantities in Italy.

DEPA Commercial, like all main gas suppliers licensed to use the country’s gas network, is expected to make these gas reserves available for all of the upcoming winter period, or, more specifically, from November to March.

These gas reserve amounts stocked up through the Preventive Action Plan are planned to play a protective role should Moscow make changes to deliveries of pipeline gas quantities.

Gas suppliers whose imports represent no more than 1 percent of the country’s total gas imports have been exempted from RAE’s gas storage requirement.

DEPA Commercial is Greece’s biggest gas importer, requiring the company to establish gas reserves for 622,440 MWh. The top three include Mytilineos, which must store away gas for 267,900 MWh and Promitheas Gas with 137,940 MWh.

 

European action taken to avoid energy-led bankruptcy crisis

Energy retailer bankruptcies in countries such as the UK and energy group nationalizations in France and Germany, worrying developments of recent months, have emerged as a severe warning that a 2008 Lehman Brothers-type bankruptcy crisis in Europe is possible.

The energy crisis in Europe has placed the entire economy in peril as it could prompt a series of devastating knock-on effects.

Concern is high as a result of the high exposure of energy companies to margin calls, serving as guarantees that exist to ensure that if one counterparty goes bankrupt, the other will collect money it is owed.

The problem is that wildly fluctuating electricity and natural gas prices have forced companies to drastically increase their guarantee sums, even if just temporarily, a demand greatly pressuring their finances.

Highlighting this increased pressure, Greek power utility PPC’s chief executive Giorgos Stassis recently noted that PPC needed – for the aforementioned reasons – to commit one billion euros one day in August before being reimbursed half this amount shortly afterwards, when prices eased.

Margin-call demands have a multiplying effect that could turn the energy crisis into a debt crisis, as was the case with the financial crisis of 2008. This explains why European governments are rushing to offer capital guarantees and liquidity to energy companies in an effort to avoid bankruptcies caused by an inability to meet current needs.

It is estimated that such support measures in Europe will cost in excess of 1.5 trillion euros and could reach as high as two trillion euros.

 

 

 

EC windfall profits tax soon, revision to local plan possible

Greece will not be required to make adjustments to its windfall profits tax on electricity producers now that the European Commission is preparing to implement a corresponding tax mechanism covering the entire EU, energy ministry sources have told energypress.

Brussels’ related directive notes that EU member states already implementing wholesale electricity market interventions to contain retail prices, namely Greece, Spain and Portugal, can maintain their measures, with any revisions being at their discretion, the ministry sourced added.

However, revisions to the Greek formula, influenced by details in the European model, cannot be ruled out, as government officials will examine whether partial changes can be made to improve the formula recovering electricity producer windfall profits for the country’s day-ahead market, the ministry sources added.

 

 

Energy saving compensation for industry, incentives for households, businesses

Industrial enterprise compensation packages, offered through auctions, in exchange for lower energy consumption, and energy-saving incentives for households to be announced at the end of this month, have been included in a Greek plan aiming to achieve a European Commission order for a 5 percent reduction of electricity usage by all EU member states.

It will be up to each EU member state to decide on the details of respective formulas achieving the crisis measure’s objective set by the European Commission.

The Greek plan is greatly relying on industrial players to embrace compensation packages to be offered through auctions.

Reduced energy usage by households and businesses will be optional as, contrary to other EU countries, smart meters, offering immediate online information on energy consumption, have yet to be installed in Greece.

A promotional campaign encouraging households and businesses to use less electricity will be launched at the end of this month, immediately after the energy ministry has announced subsidy-related incentives.

 

‘EC intervention acceptance of energy market failure’

The European Commission has finally decided to adopt state intervention measures in energy markets, mainly electricity, after much delay, essentially accepting the failure of markets to produce desired results, Pantelis Kapros, Professor of Energy Economics at the National Technical University of Athens, has noted in an analysis.

Major energy price increases needed to spread throughout Europe for Brussels to decide to intervene, the energy expert noted.

Fixed price offers and price hedging contracts – which, in many countries, secured, over a considerable period, relatively stable retail electricity prices not reflecting rising electricity prices at energy exchanges – have become impossible to maintain as a result of the extended energy price crisis, the professor pointed out in his analysis.

Consumer prices are now skyrocketing virtually everywhere in Europe, increasing the risk of bankruptcies, a perilous situation that has prompted EU governments to push the European Commission for state intervention proposals, the professor underlined.

During this crisis, electricity markets have failed to achieve consumer prices at levels reflecting the true long-term average cost of electricity, as healthy competition would, the professor noted.

Given the exorbitant natural gas prices at present, green hydrogen would represent a lower-cost alternative, if infrastructure was in place, the professor noted, concluding green transition is the only positive way out of the problem, as has now been recognized by all.

Major industries turning to natural gas alternatives

Energy-intensive industries are abandoning, one after another, natural gas as an energy source and turning to alternatives in order to contain their operating costs.

Aluminium of Greece has switched to diesel for smelting procedures at its Agios Nikolaos facility in Viotia, northwest of Athens, while Motor Oil, has begun using naphtha for some of its energy needs, in place of natural gas, whose price levels have spun out of control.

According to sources, another major industrial player, ElvalHalcor, is also examining LPG as an alternative to natural gas, which the company uses for its aluminum and copper smelting furnaces.

However, this fuel switch cannot be carried out instantly as specialized studies focused on safety matters must precede the change. In addition, equipment needed for this fuel switch is not readily available. Also, ElvalHalcor is examining the extent of LPG availability in Greece as an industrial enterprise of its size would require big amounts.

European Commission energy crisis measures set to be announced, which will require energy savings and discourage the use of natural gas, are driving industrial players to seek energy source alternatives.

 

Brussels placing energy crisis hopes on windfall profits tax

The European Commission is placing its hopes on greater revenues to be generated by a windfall profits tax on refineries, wholesale gas companies and electricity producers as a solution to get the EU through the energy crisis.

According to the plan, the EU-27 will use these increased tax collections to subsidize, as widely and as generously as possible, electricity bills of European households and businesses.

Thoughts of imposing a price cap on natural gas from all sources, including Russia, have been abandoned, following objections raised by many EU member states at a recent meeting of EU energy ministers.

The windfall profits tax on oil, gas, coal and refining companies, to be announced today by European Commission president Ursula von der Leyen, could reach as high as 33 percent, according to Bloomberg. Drafts of this extraordinary tax measure do not include its tax rate.

 

Brussels to demand reduced energy usage from member states

The European Commission is set to call on EU member states to implement a plan requiring consumers to use less electricity for three to four hours a day.

Though it will be at the discretion of EU member states to each decide their respective hours of reduced electricity usage, the fact that this energy-saving measure will be mandatory highlights the seriousness of the energy crisis.

A draft of Brussels’ plan was leaked yesterday ahead of a series of measures to be announced tomorrow by European Commission president Ursula von der Leyen.

Though the latest energy-saving proposal will offer some flexibility to governments, including the ability to implement the measure during hours when RES output is low, it is expected to prompt further disagreement between member states as to how the energy crisis should be confronted, as was the case last Friday at a meeting of EU energy ministers.

Other measures to be announced by the European Commission’s leader tomorrow will include compensation offers, through auctions, for industrial enterprises reducing energy consumption.

 

Energy sufficiency fears rising, extra FSU may be required

The probability of a complete disruption of Russian gas supply to Europe, including the Turk Stream pipeline supplying Greece and other Balkan countries, is becoming increasingly likely, members of the country’s crisis management team have told energypress.

Over the past few weeks, energy operators have been staging more frequent simulated tests for the country’s electricity and natural gas systems in an effort to measure the extent of energy shortages that would result from a Russian decision to cut off all Gazprom supply routes to Europe.

The tests, according to sources, include rapid moves securing additional LNG cargo orders as replacements for Russian gas quantities.

An extra FSU at the LNG terminal on Revythoussa, the islet just off Athens, in addition to one just installed at the facility, cannot be ruled out at this stage, Athanasios Dagoumas, president of RAE, the Regulatory Authority for Energy, noted yesterday during a speech at the OT (Oikonomikos Tahydromos) Forum.

 

Revised subsidies, aiming for lower power usage, in October

A revised subsidy package for electricity, which has been shaped by the energy ministry and will be introduced in October, will inversely relate subsidies offered with electricity usage levels, while bonus subsidies will be offered to households and businesses that manage to reduce electricity consumption by 10 percent compared to levels registered a year earlier.

Until now, flat-rate electricity subsidies have been offered to all consumers regardless of consumption levels.

The new plan’s objective is to offer consumers incentive for reduced electricity usage during what is expected to be a challenging winter. Natural gas, currently the highest-cost energy source, is responsible for roughly 40 percent of electricity generation in Greece.

The new electricity subsidy plan’s implementation in October was confirmed by Prime Minister Kyriakos Mitsotakis at the ongoing Thessaloniki International Fair.

Heating fuel subsidy boost for minimal electricity heating

Heating fuel subsidies will continue being offered universally in Greece this coming winter, but at a higher level, up to 20 cents per liter, or 25 cents per liter including VAT, along with more generous income criteria, as the government wants to make fuel-based heating the lowest-cost heating solution this winter in order to minimize the number of households turning to electricity for heating.

Increased electricity usage would mean increased demand for natural gas, the costliest energy source at present. Natural gas represents roughly 40 percent of overall electricity generation in Greece.

The new subsidy package for fuel heating is expected to enable all consumers to purchase heating fuel at a level of 1.30 to 1.40 euros per liter, instead of 1.60 euros per liter, the price level if supply were to start now.

Heating fuel subsidies in Greece were worth a total of 174 million euros last winter, a sum seen rising to 300 million euros this season.

The number of households eligible for heating fuel subsidies is expected to increase to 1.3 million from 800,000 last winter as a result of a planned income criteria revision widening the offer’s eligibility.

The offer’s personal income criterion is expected to increase to between 17,000 and 18,000 euros per annum from 14,000 euros at present for single-resident homes, while corresponding income criteria rises will be made for families.

 

Eurometaux: Crisis measures needed to ease pressure on struggling industry

Europe needs to take emergency energy-crisis action to ease the growing pressure on the industrial sector, a letter forwarded to the European Commission by European industry association Eurometaux has underlined.

The letter was signed by representatives of 40 major industrial enterprises and associations, including three leading Greek industrial players, Evangelos Mytilineos, head of Mytilineos group, Panos Lolos, ElvalHalcor’s Copper Segment general manager, and Antonis Kontoleon, president of EVIKEN, the Association of Industrial Energy Consumers.

Aluminium and zinc production in Europe has been forced to drop to 50 percent of capacity as a result of high energy costs, while the copper and nickel sectors are also facing serious problems, the Eurometaux letter notes.

Reasonable electricity and natural gas prices are necessary for production of metals, the letter underlines.

Europe cannot have a successful energy and raw materials strategy if electricity and gas prices remain at current levels for an extended period of time without relief, the letter says.

The crisis requires a comprehensive package of solutions, while no option should be disregarded during such unprecedented conditions, the association notes.

An improved temporary framework for state support as well as incentives for electricity purchase agreements with RES producers are among several proposals listed by Eurometaux in its letter to Brussels.

New subsidy model, in October, to reward lower power usage

The government is preparing to replace flat-rate electricity subsidies offered to all consumers, regardless of power usage levels, with a new subsidy model rewarding consumers using less electricity.

According to government sources, a new model for electricity subsidies will be implemented October 1 for households, professionals and businesses.

Under the new system, subsidies will be determined by an algorithm taking into account energy savings.

Officials have yet to decide whether subsidies will only be awarded to consumers who have achieved specific consumption reduction targets, or whether various subsidy levels offered will be inversely related to power usage.

For example, consumption levels of up to 300 KWh in a month could by subsidized by certain amount that would be reduced for consumers exceeding this monthly consumption limit.

The subsidy model changes, to be made quickly, are likely to cause complications for suppliers, who are still coming to grips with the existing subsidy system and are not expected to be informed of the new plan’s finalized details until just before its launch.

Suppliers have already made clear that a subsidy system awarding households and businesses amounts inversely related to consumption levels would be the fairest solution.

 

PPC’s liquidity, €3.6bn, ‘crisis tool’; Ptolemaida V ‘trial run in October’

Power utility PPC’s company plans are being adjusted on a daily basis as a result of changing market conditions in the energy crisis, but the corporation’s liquidity, at 3.6 billion euros – 2.197 billion euros in cash reserves and 1.444 billion euros in secured credit availability – stands as a protective weapon amid the uncertainty, chief executive Giorgos Stassis has told analysts during a presentation of PPC’s second-quarter results.

PPC’s net debt on June 30, 2022 was 2.245 billion euros, while PPC faces expiring debt payments worth 220 million euros in 2022, 543 million euros in 2023, and 1.015 billion euros in 2024, for which payment deadlines of 600 million euros can be extended by a year, Stassis informed.

The majority of PPC’s debt, 67 percent, has fixed interest rate terms, while 33 percent of the company’s borrowing is ESG-linked, the chief executive added.

PPC’s new Ptolemaida V power station, to be launched as a lignite-fired power station before eventually converting to natural gas, is expected to undergo a trial run in October, ahead of a scheduled launch in January, Stassis noted.

PPC is pushing ahead with investments in renewable energy, the company’s portfolio of RES facilities under construction or ready to undergo construction at 394 MW, the chief executive informed, adding that RES projects representing a further 4 GW are practically assured.

Company news concerning acquisitions is soon expected from Romania, possibly within the next few months, the chief executive noted.

Gas subsidy cut a disincentive considered for lower demand

Reduced natural gas consumption, not just in the industrial sector, but for households as well, is emerging as a key strategy in the government’s battle against the energy crisis as a very challenging winter approaches.

Government officials are looking to drastically reduce, or even eliminate, subsidies offered for natural gas – both state subsidies and gas utility DEPA subsidies – according to one proposal already being discussed.

Natural gas subsidies offered in Greece peaked in April at 40 euros per thermal MWh, double the level of the rate offered a month earlier. A total of 540,000 households, along with all business and industrial consumers, regardless of size, earnings or workforce, were eligible for these subsidies.

However, the country’s fiscal leeway has tightened, eroding the government’s ability for gas subsidy support packages worth 90 to 100 million euros per month.

At current gas price levels, support packages, as they stand, would exceed an annual cost of 15 billion euros, representing 7 percent of GDP.

Last April, when international gas prices were lower compared to current levels, the month’s gas subsidy support package – state and DEPA, combined – reached a total cost of 88.74 million euros.

Reducing or eliminating gas subsidies would serve as a disincentive for new gas connections, especially if gas prices remain high. However, such an initiative would place existing consumers under increased pressure, which could result in political cost. The next Greek legislative election will be held by July, 2023.

Reduced power usage, gas price caps on EU meeting agenda

A list of emergency energy price-control measures to be discussed by the EU-27 energy ministers at an extraordinary meeting on September 9 make up a document prepared by the EU’s Czech presidency.

The proposals to be discussed, nine in total, include temporary caps on the price of natural gas used for electricity generation as well as plans for a reduction of electricity consumption.

Member states are already forming alliances and preparing to back preferred strategies ahead of the emergency meeting.

The document highlights the need for a united European response to soaring energy prices, while also underlining the difficult winter that lies ahead. “The resilience of the European energy market will be tested in the coming winter,” the document notes.

The list of proposals to be discussed also includes a temporary cap on the price of imported natural gas from specific sources of origin, as well as temporary exclusion of natural gas power plants from energy exchange clearing prices.

 

Government moves ahead with plan to reduce energy consumption

The introduction of energy saving measures, both compulsory and optional, for consumers has now become a priority for the government following growing shortage fears, throughout Europe, prompted by Russia’s indefinite closure of the Nord Steam I gas pipeline, supplying Germany and, by extension, central Europe.

At a meeting of government officials in Athens yesterday, Prime Minister Kyriakos Mitsotakis agreed to move ahead with measures intended to restrict electricity and natural gas consumption in an effort to avoid energy shortages during winter, sources informed.

The government will aim to decrease the amount of natural gas used for electricity generation by approximately 10 TWh, sector officials told energypress.

Annual natural gas consumption in Greece amounts to 70 TWh, of which 50 TWh is used for electricity generation.

An initiative was taken in early July, through a joint ministerial decision, to reduce electricity consumption at all public buildings, numbering 212,000, by 10 percent. The response, so far, has been poor, according to sources.

Campaigns raising the public’s awareness of the need to cut back on energy consumption will soon be launched by energy companies and operators. Citizens will be advised to keep heating temperatures at a maximum of 19 degrees Celsius and lights switched off in rooms not being used.

The government is also striving to limit electricity and natural gas consumption in the industrial sector.

Energy minister Kostas Skrekas met yesterday with key industrialists at the helms of Titan cement group, Viohalco and the Mytilineos group, whose subsidiaries include Aluminium of Greece, to discuss plans limiting energy consumption, as well as the replacement of natural gas with diesel as an energy source wherever possible.

 

 

Worst-case natural gas scenario for Europe becoming a reality

The worst-case scenario for natural gas supply in Europe appears to be turning into a reality. If Russian gas supply to Germany via the Nord Stream I pipeline – now closed temporarily for repair work, according to Russia’s Gazprom – ends up being stopped, long term, the effects, skyrocketing prices and energy shortages, would swiftly spread across Europe.

The pipeline’s shut-off would leave no supply route unaffected, including Turk Stream, a key pipeline route for supply of Russian gas to Greece.

Greek government officials discussed concerns over such a scenario during a meeting yesterday at the Prime Minister’s office, while, on a wider level, the clouds are darkening over Europe, as Moscow appears increasingly likely to keep Nord Stream I shut off.

If so, Greece will need to activate its national emergency plan, whose measures include further LNG shipments, diesel conversion of natural gas-fueled power stations, and increased lignite power generation.

Even so, the national emergency plan may not suffice to fully cover the country’s energy demand should cold winter conditions be prolonged, a minister who took part in yesterday’s meeting at the Prime Minister’s office acknowledged to energypress.

In Greece, the wholesale price of natural gas rose sharply yesterday to 280 euros per MWh, impacting electricity prices.

Nord Steam I indefinite closure raises alarm in the EU

Gazprom’s announcement of a latest closure for the Nord Steam I gas pipeline, until further notice, a move that will significantly reduce Russia’s gas supply to Europe, has raised EU concerns to a new high.

In response, an EU crisis team will hold an emergency teleconference meeting today to assess new market conditions resulting from the closure, for an indefinite period, of the Nord Steam I gas pipeline, northern Europe’s main supply route for Russian gas.

Russian gas supply to Europe through Ukraine has already been severely limited.

New measures are likely to be agreed on, to protect EU energy security ahead of winter, at today’s EU crisis team meeting, including moves for energy rationing, seen as an inevitability if Nord Steam I remains closed for an extended period.

“The EU is now in the red zone as further demand reduction needs to take place,” said Thierry Bros, a professor in international energy at Sciences Po in Paris. He estimates an extra 3% of demand needs to be cut.

 

New power subsidies to be linked to usage levels

The government is moving to revise its energy subsidies strategy, until now offered universally, regardless of consumption levels, by incorporating subsidies with energy usage, offering them as a reward for restricted consumption, an approach also being prepared on a wider European scale by the European Commission.

In Greece, state subsidies offered for electricity over the past few months have covered as much as 94 percent of electricity cost increases.

However, such generous support, irrespective of electricity consumption levels, cannot be sustained in 2023 as fiscal margins have tightened, government sources informed, adding that the budget cannot keep supporting such expenditure over an extended period.

Given the high level of electricity subsidies in Greece, consumers have remained careless with consumption.

The European Commission is believed to be preparing to incorporate a revised version of Greece’s windfall tax on electricity producers into its wider plan promoting measures designed to reduce electricity demand.

Key industrialists asked to cut down on energy consumption

Energy minister Kostas Skrekas has asked a group of leading Greek industrialists to reduce energy consumption at their production facilities as a means of greatly contributing to the country’s wider energy-crisis effort ahead of what could be a challenging winter, energypress sources have informed.

The minister’s request, a response to Russia’s latest closure of the Nord Steam I gas pipeline, which, according to Moscow, was necessary for repairs, represents the start of the government’s gradual implementation of an emergency plan that factors in the possibility of a complete cut in Russian gas supplies.

The energy minister met last Friday with three industrialists, Dimitri Papalexopoulos, chairman of the executive committee at Titan cement group, Nikolaos Stasinopoulos, president of Viohalco, and Evangelos Mytilineos, chairman and board of the directors at the Mytilineos group, whose subsidiaries include Aluminium of Greece.

The minister, through this initiative, is striving for energy savings of approximately 15 percent as the production facilities of the three industrial groups are the country’s biggest consumers of electricity and natural gas.

Implementation of the minister’s plan is expected to help prevent power cuts to households and businesses. The three businessmen were also asked, by the energy minister, to avoid incorporating job cuts into their energy saving strategies.

 

 

Retail electricity market pressured by rise in unpaid bills

A rise in the number of overdue electricity bill payments, despite the government’s subsidy support and cash returns, received by consumers through a power pass plan, is increasing the pressure felt by suppliers in the retail electricity market.

According to a study conducted by consumer support group Ekpoizo, 17.6 percent of respondents have faced threats by suppliers for power cuts over the past three months, while 3.1 percent had their electricity cut.

The study showed that 92.3 percent of respondents declared being dissatisfied with the level of cash returns they have received through the government’s power pass plan.

One in two consumers received up to 50 euros through the power pass plan, while just 8.1 percent received a sum of between 301 and 600 euros, according to the Ekpoizo study.

Also, the overwhelming majority of respondents, an 89.9 percent share, want a wholesale price adjustment clause included in electricity bills to be abolished.

A considerable percentage of respondents, 42.7 percent, expressed support for further renewable energy utilization. Just 14.5 percent of respondents considered the government’s electricity subsidies effective.

European gas storage units 80% full, sufficiency still not assured

Europe’s natural gas storage facilities have been filled to 80 percent of their capacity, on average, well ahead of an early-October target that had been set by EU authorities as an energy crisis emergency plan.

Given the intense competition anticipated for LNG cargoes in the international market, as well as Asia’s strengthened markets, securing sufficient reserves is important but not a guarantee that Europe will make it through the winter unscathed.

German estimates project that European gas reserves at 80 percent of storage capacity, as an EU average, would last for approximately two months if Russia were to fully disrupt its supply to Europe. The winter’s level of harshness will greatly shape consumption levels and, by extension, consequences.

European gas reserves are likely to reach 90 percent of storage capacity over the next month.

At this stage, the challenge for the EU is to continue securing gas loads. This would minimize the use of gas kept in storage and maintain high storage levels all the way through winter for a bolstered position looking further ahead.

 

Revythoussa new FSU ready to receive LNG, slots in October

A newly installed floating storage unit at the Revythoussa LNG terminal on the islet just off Athens, which has boosted the facility’s capacity by 70 percent, is now ready to receive additional LNG shipments.

The LNG terminal’s capacity boost comes ahead of an October auction, to be held by gas grid operator DESFA, for slots at the facility.

All technically related preparations concerning the new FSU have been completed. The capacity boost enables two LNG tankers to unload at the same time, meaning scheduled tanker arrivals can  be facilitated along with short-notice import orders placed by suppliers or traders.

Such a need does not seem necessary at present, market sources have informed, but the usefulness of the terminal’s capacity boost will start becoming apparent once autumn sets in.

Suppliers and traders will be able to plan their LNG imports for 2023 in accordance with the terminal’s increased capacity as DESFA will auction off slots in October.

The FSU, leased by DESFA in June for a 12-month period through a tender, boosts the terminal’s capacity by 70 percent, from 225,000 cubic meters to 380,000 cubic meters.

 

 

Brussels preparing crisis action, natural gas price cap likely

The European Commission is preparing drastic action to counter the energy crisis in the form of a price cap on European wholesale gas prices to deescalate electricity prices around Europe.

According to energypress sources, details of the plan will have been finalized by around September 20 so that it can then be discussed by the EU’s energy ministers and heads of state.

Despite these necessary steps, the finalized plan could well be ready for implementation by the end of September as Brussels is seeking a swift procedure.

Highlighting the cruciality of the gas-cap plan for Brussels, European Commission president Ursula von der Leyen is being regularly updated on its progress by the European Commission’s Directorate-General for Energy.

The Directorate-General for Energy is believed to be examining two alternative plans, sources informed.

The first alternative, seen as the more probable option, would entail gas import disruptions for gas offered at prices over the cap to be implemented. Brussels authorities believe Europe’s considerable share of global fuel demand could help subdue gas prices if orders are stopped collectively. The second alternative would involve subsidy support for gas imports.