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.