Power utility PPC has raised a compensation claim for its maintenance of high-cost diesel-fueled power stations on islands – both interconnected and now in the process of being interconnected – as back-up, while also calling for an exemption from a special consumption tax (EFK) on the diesel it uses to run these facilities.
The two requests were expressed by PPC through public consultation held by power grid operator IPTO for its ten-year development plan covering 2021 to 2030.
To this very day, the power utility has fully met the grid operator’s requests concerning provision of back-up services to ensure uninterrupted electricity supply to consumers on the Cyclades, yet, despite the corporation’s initiatives and the costs it has shouldered, which are growing, an appropriate regulatory framework ensuring sustainability for this service has not been established, PPC noted in the public consultation procedure.
Industrial enterprises of the mid-voltage category are still waiting for the implementation of a special consumption tax (EFK) reduction more than four months after the measure was first announced by the government.
Though this tax cut would have minimal impact on the government’s tax revenue, it is important for a large number of companies – approximately 170 with annual energy consumption levels of more than 13 GWh.
Last July, Prime Minister Kyriakos Mitsotakis announced the special consumption tax for mid-voltage industrial firms would be lowered from 5 euros per MWh to 2.5 euros per MWh, the level imposed on high-voltage producers.
The measure’s total cost, estimated at 3 million euros, promises some energy-cost relief for mid-voltage industrial enterprises.
Producers have not received any further news on the consumption tax cut measure since it was announced in July, prompting concern and frustration among industrial circles.
Energy cost represents a considerable part of total production costs for energy-intensive producers.
Wholesale electricity prices in Greece are 47 percent higher than the EU average and nearly 70 percent higher than the lowest price level in the EU, according to official European Commission data.
Illicit shipping fuel trade in Greece remains a persisting issue despite a series of measures implemented by a succession of governments since 2002 to restrict movement by vessels of smuggled fuel.
In a latest initiative, the finance ministry is preparing a rule, which, if implemented, will nullify preceding measures, subsequently permitting, once again, the use of floating refueling means of any capacity without any restriction of movement.
Adoption of this rule will effectively facilitate the avoidance of special consumption tax payments on shipping fuel purchased.
Special consumption tax on shipping diesel is 410 euros per cubic meter, roughly the current market value of the fuel, while this tax on mazut is 38 euros per ton.
Relatively recent rules, introduced in 2015 and 2016, requiring shipping companies to install certified fuel inflow-outflow monitoring systems as well as GPS technology, have not yet been fully implemented and, subsequently, proved insufficient to stop illicit shipping fuel trade.
A series of issues concerning prospective industrial energy cost savings that have surfaced either as industrial-sector requests or government announcements remain unresolved, creating insecurity within industrial circles.
New industrial electricity tariffs, currently being negotiated but with much ground still to cover for convergence, are at the very top of this list for industrialists.
One energy-intensive industrial producer has already abandoned power utility PPC after rejecting the industrial electricity tariff prices the utility had to offer.
Industrialists also want a public service compensation (YKO) surcharge reduction.
On another front, the sector expects a special consumption tax rate for mid-voltage industrial consumers with annual consumption levels of more than 13 GWh to be equated with the special consumption tax rate offered to high-voltage industrial enterprises. This revision, concerning approximately 170 factories, has been announced by Prime Minister Kyriakos Mitsotakis.
Another matter for the industrial sector concerns exempting major-scale industrial units from a series of additional electricity supply surcharges, in accordance with European Commission directives.
Industrialists also want a special consumption tax exemption on electricity used for mineral processing in cement and glass production, which would align Greek law with an EU directive from 2003.
The industrial sector is also anticipating a new mechanism to offset CO2 emission right costs.
The government is preparing to reduce a special consumption tax for energy-intensive mid-voltage companies and also push through a series of other measures aiming to reduce industrial energy costs, deputy energy minister Gerassimos Thomas has revealed in an interview with Greek daily Kathimerini.
The deputy minister said he is confident a Greek proposal seeking extensions for the country’s demand response mechanism and transitory flexibility remuneration mechanism (TFRM) will be approved by the European Commission.
The special consumption tax for energy-intensive mid-voltage companies will be reduced to the level offered to high-voltage companies, the deputy minister informed.
Also, a new public service compensation (YKO) mechanism offering benefits for high and mid-voltage industries will be introduced, he said.
Power grid operator IPTO needs to design and launch new demand response products in compliance with EU directives, the deputy minister noted while addressing the forthcoming launch of the target model in Greece.
The objective is to provide incentives to private-sector producers and industry for equal participation in the balancing and energy markets, he explained.