Suppliers set to receive initial €165m sum for subsidized bills

Electricity suppliers are set to receive a deposit amount totaling 165 million euros from the state’s Energy Transition Fund as compensation for their reduced revenues to result from subsidized electricity bills offered to consumers by the government for September and October as part of the overall effort to tackle the effects of the ongoing energy crisis.

Suppliers also stand to receive a 228 million-euro sum for electricity subsidies concerning November, while a 235.5 million euro-euro sum for December subsidies will be offered in 2022.

These sums will be divided up for electricity suppliers based on their market shares on August 31, 2021. Some corrections and revisions could be needed in 2022.

The subsidy plan announced by the government concerns a total of 7.6 million low-voltage household and business electricity connections.

 

 

Power bill subsidies increased, gas cost support also expected

The energy ministry is preparing to increase an electricity-cost subsidy package to between 280 and 300 million euros, from a 200 million-euro sum announced last month by Prime Minister Kyriakos Mitsotakis at the Thessaloniki International Fair, as a result of the continuing surge in energy costs, which, if not combated, could have political ramifications.

The ministry’s response comes following the announcement of September’s increase in the wholesale electricity price average, the latest in a series of monthly rises. Wholesale electricity prices averaged 134.73 euros per MWh in September, up from 121.72 euros per MWh in August and 101.86 euros per MWh in July, all well over the January average of 52.52 euros per MWh.

Finalized decisions on the subsidy support package have yet to be taken but officials have already agreed to draw the amount to be provided to consumers from the Energy Transition Fund.

The expected subsidy increase for electricity consumption would result in support worth between 40 and 45 euros per MWh, instead of 30 euros per MWh, effectively resulting in a monthly electricity bill reduction of 14 to 15 euros for consumers.

The government is also looking to subsidize natural gas bills through an additional support package expected to be worth roughly 150 million euros. Retail natural gas prices have risen by approximately 500 percent since the beginning of the year.

RES operator given control of new Energy Transition Fund

DAPEEP, the RES market operator, whose influence in the energy market is growing, will be given control of the new Energy Transition Fund, a move promising to give the operator a key role in efforts to counter energy cost increases when prices are at exorbitant levels, as is the case at present.

A large percentage of the ETF’s revenues will come from CO2 emission right auctions, staged by DAPEEP.

Through its authority over the new ETF, DAPEEP will be in a position to manage state funds, including, for example, planned subsidies for natural gas bills, expected to be derived from the state budget, at least for the final quarter of 2021, sources informed.

In due course, DAPEEP, through the ETF, will also manage funds to be generated by other prospective green surcharges, including an expected expansion of the carbon emission rights system into transportation and buildings.

These new roles promise to further establish the place of DAPEEP in the domestic energy market.

Suppliers question sufficiency of €150m subsidies to tackle energy costs

Electricity suppliers have questioned the sufficiency of a 150 million-euro amount to be made available by the government through a new Energy Transition Fund as support for households and businesses to combat increased energy costs.

The doubts were raised during an energy ministry meeting yesterday involving the country’s electricity suppliers, facing pricing-policy pressure – especially the non-vertically integrated – as a result of elevated wholesale electricity prices that have been driven considerably higher by a combination of factors in international markets.

According to Greek energy exchange data, the day-ahead market price average for today is 172.27 euros per MWh, while the day’s maximum price level in this wholesale market exceeds 200 euros per MWh.

The subsidy plan’s calculations are based on wholesale electricity prices ranging between 117 and 120 euros per MWh.

Energy markets throughout Europe are being severely impacted by the price surge. In the UK, for example, wholesale electricity prices have risen as high as 400 euros per MWh following colder weather and higher energy demand.

Independent players set to offer discounts, awaiting PPC clarity

Independent suppliers are set to offer discounts and tariff reductions to consumers, their effort focusing on consumption levels ranging between 300 and 600 kWh, not covered by state subsidies, according to latest updates.

Independent suppliers are awaiting the outcome of a meeting today involving energy minister Kostas Skrekas, during which state-controlled power utility PPC’s discount strategy will be clarified, before they take specific decisions, including for the consumption category of up to 300 kWh, applying to the majority of households.

Besides an across-the-board discount of 30 percent for all consumers, including the category up to 300 kWh, PPC has also promised an additional discount of between 3 and 4 percent for the 301-600 kWh category.

It still remains unclear how much the price gap between PPC and independent consumers offering lower tariff prices could be narrowed by this move.

Independent suppliers know well that they will need to keep offering lower tariffs than PPC, the dominant player, to remain competitive.

The government plans to adopt an Energy Transition Fund to offer electricity subsidies to households and small and medium-sized enterprises, heating fuel subsidies, and a range of other initiatives as a tool to contain the surge in wholesale energy costs, prompted by a combination of factors in international markets.