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.

 

 

Gas heating most affordable option following new subsidy

The energy ministry has announced a natural gas-heating subsidy of 9 cents per liter, making gas heating the lowest-cost heating solution for households – compared to fuel and electricity – despite a 300 percent natural gas price increase compared to a year ago.

This gas subsidy comes as crucial support for the mass of households that took pre-crisis decisions to convert to gas heating over the past decade or so, only to see gas prices skyrocket in recent months.

Taking into account the gas subsidy, announced yesterday by energy minister Kostas Skrekas, gas heating will begin the winter season at 12 cents per liter (120 euros/MWh), below the cost of 13 to 14 cents per liter for heating fuel and 16 cents for electricity heating.

The gas heating subsidy level is based on the assumption, by gas companies, of TTF price levels of roughly 200 euros per MWh in coming months.

Given the aforementioned figures, the heating cost for a 100 square-meter apartment requiring 9,000 KWh for heating over a winter is 1,000 euros for gas heating, 1,250-1,300 euros for fuel heating, and 1,450-1,500 euros for electricity heating.

Without the gas heating subsidy, the resulting gas heating cost, priced at 21 cents per liter, would reach nearly 2,000 euros for a 100 square-meter property.

 

 

PPC’s October tariff down 25%, similar cuts by all players

Power utility PPC, the dominant retail player, has announced an October tariff for households of 0.595 cents per KWh, 25 percent lower than the September tariff offered by the utility.

This 25 percent month-to-month reduction rate more or less applies for October household tariffs offered by all the country’s suppliers, who have just announced their tariffs for next month.

Under new market rules, electricity retailers must announce their tariffs for forthcoming months by the 20th of each preceding month.

PPC’s tariff of 0.595 cents per KWh is for monthly consumption of up to 500 KWh. The utility’s tariff for consumption over this level was set at 0.607 euros per KWh.

Protergia announced an October household tariff of 0.57630 euros/KWh. Elpedison’s October tariff was set at 0.5905 euros/KWh. Heron’s new tariff is 0.698 euros/KWh, with a punctuality discount rate of 20 percent that reduces its level to 0.5584 euros/KWh. Elsewhere, October household tariffs are: Volterra, 0.685 euros/KWh; Fysiko Aerio, 0.594 euros/KWh; Zenith, 0.589 euros/KWh; Watt+Volt, 0.5890 euros/KWh; Elin, 0.599 euros/KWh; Volton, 0.589 euros/KWh.

In September, the government spent 1.9 billion euros on electricity subsidies to contain retail prices at levels of between 14 and 16 cents per KWh.

Subsidies for October, to be inversely related to consumption, are scheduled to be announced today.

October tariffs slightly lower than September levels

Electricity tariff levels for October, to be announced late tonight by electricity retailers, are expected to be lower than September’s levels but still higher than August prices, energypress research has shown.

The anticipated retail electricity reduction has been attributed to a recent reduction in natural gas prices at the Dutch TTF hub.

Most suppliers are expected to set their tariffs for October at levels between 60 and 68 cents per KWh, while prices, by some suppliers, slightly below the level of 60 cents per KWh, have not been ruled out.

Under new market rules, electricity retailers must announce their tariffs for forthcoming months by the 20th of each preceding month.

September’s tariffs ranged between 68 and 80 cents per KWh, well over August’s levels of between 47 and 58 cents per KWh.

The government is seeking to stabilize prices for consumers through a latest subsidy package, whose amounts offered will be inversely related to consumption levels. It will be implemented as of October 1.

According to sources, highest subsidies will be offered to consumers making a low-consumption category, to be set at a maximum of 500 KWh per month. Slightly lower medium-category subsidies will be offered to consumers using between 501 and 1,000 KWh per month, while consumers exceeding 1,000 KWh per month will be offered the smallest level of subsidies, the sources added.

Higher-level energy consumers who succeed to reduce electricity usage by at least 15 percent compared to a year earlier will be transferred to the next-highest subsidy category, the sources informed.

Natural gas subsidies are expected to be universally applied.

 

 

October tariffs down, subsidies to reward lower power usage

Supplier electricity tariffs for October, due to be announced tomorrow, will be lower compared to September levels and are seen ranging between 0.599 and 0.680 euros per KWh.

A recently introduced market rule requires suppliers to provide their next month’s prices by the 20th of the preceding month.

Pricing for next month has proven very difficult to calculate as market conditions remain very fluid, TTF index prices changing continuously, market officials noted.

However, Greek market peculiarities, factoring in natural gas prices with some delay, are expected to result in lower retail electricity prices next month, the officials explained.

A day after October’s electricity tariffs are announced, the government plans to release a new subsidy formula, to become effective October 1.

According to sources, three consumption level categories will be established, the subsidies to be offered for each inversely related to electricity usage. For example, consumers with usage placing them in the highest consumption category will receive the lowest subsidies and vice versa.

Also, higher-usage consumers in lower subsidy categories will be elevated to the next highest subsidy category if they can reduce consumption by 15 percent compared to a year earlier.

 

 

 

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.

 

Subsidies to cover 40-60% cost of net-metering solar panels

The government plans to offer a subsidy package covering between 40 and 60 percent of investment costs for approximately 250,000 roof-mounted solar panels installed for net metering purposes by households, farmers and small businesses.

Prime Minister Kyriakos Mitsotakis announced the government’s plan over the weekend at the ongoing Thessaloniki International Fair.

The overall capacity of small-scale solar energy panels to be installed through this support program will reach 2.5 GW, while a 10-KW limit will be set for each installation, energypress sources have informed.

Some beneficiaries with less energy needs will undoubtedly opt for smaller solar panels, meaning the number of parties eligible for subsidy support will rise.

The program’s funds for households and farmers will stem from the National Strategic Reference Framework (NSRF) as well as the REPower EU action plan, designed to rapidly reduce European dependence on Russian fossil fuels and accelerate the green transition.

Small businesses will be included in this subsidy support program with corresponding amounts from the development fund.

 

Windfall tax for oil and gas firms, government decides

Windfall profits earned in 2022 by petroleum companies, through their refineries, as well as by natural gas wholesalers, will be subject to an extraordinary solidarity tax, the government has decided, energypress sources have informed.

The money to be collected through this extraordinary tax will go towards the Energy Transition Fund to support the government’s energy subsidies offered to households and businesses.

The government’s plan to move ahead with this extraordinary tax is linked to a probable European-wide solidarity tax on windfall profits earned by fossil fuel companies.

The Greek plan will be shaped along the lines of a windfall tax model imposed on electricity producers.

This new windfall tax on oil and gas companies was discussed at last Friday’s emergency meeting of EU energy ministers. It was supported by Greek energy minister Kostas Skrekas, as well as his German and Spanish counterparts.

The Greek government appears determined to implement the windfall tax on oil and gas companies even if it fails to receive EU approval. Athens recently imposed a 90 percent windfall tax on electricity producers without EU approval.

 

 

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.

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.

 

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.

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.

Consumer confusion, distrust over supplier tariff offers

Many consumers are feeling confused about electricity tariff comparisons and how to go about determining the best supplier deals available in the market, a considerable number of enquiries expressed by energypress readers has indicated.

The confusion of consumers amid the energy crisis appears to have abounded despite the government’s recently introduced simplified system, through which suppliers announce the forthcoming month’s tariffs on a monthly basis. The net price for consumers results once state electricity subsidies have been subtracted.

Common questions asked by consumers include whether they should be on the constant lookout for lower-priced electricity offers, given the monthly tariff announcements by suppliers, which can fluctuate from month to month.

Consumers are also expressing insecurity as to where they should look for finalized, guaranteed price offers of suppliers, once the government’s subsidies have been deducted.

A price-comparison tool introduced by RAE, the Regulatory Authority for Energy, for this purpose does not appear to have convinced some consumers, or helped clarify the market picture for them, even though many consumers are aware of the tool’s existence and are using it.

 

 

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.

September subsidy support results in tariffs as low as €0.02/KWh

Household electricity prices in September will range from as low as €0.02 per KWh, well below pre-crisis levels, to €0.16 per KWh, given the government’s latest subsidy plan for the month, offering €0.639 per KWh for all households and all suppliers, a support package based on September’s price levels announced by power utility PPC, supplying the majority of Greece’s households and businesses.

The government’s subsidy package is based on an intention to lower household electricity prices to August levels (€0.15-€0.16/KWh), which led to a subsidy offer of €0.639 per KWh.

PPC set its price for September at €0.788/KWh for the first 500 KWh of consumption and €0.80/KWh for consumption beyond this level. Deducting the government’s €0.639 subsidy offer takes the resulting price for consumers to between €0.149 and €0.161/KWh, the levels charged in August.

As for other suppliers, Protergia’s resulting price, once the subsidy has been factored in, is €0.14313/KWh, down from the nominal price of €0.78213 cents.

Elpedison’s nominal rate for September was set at €1.0864/KWh, minus a €0.40/KWh Elpedison Loyalty Pass discount, taking the offer to €0.6864, which, following the government’s subsidy deduction, results in a net charge of just €0.029/KWh.

Heron’s €0.75/KWh price works out to a net charge of €0.111/KWh once the government’s €0.639/KWh subsidy has been factored in.

Hedging tool to collect up to €500m annually for crisis aid

Authorities estimate a new Permanent Hedging Mechanism will accumulate an annual sum of between 350 and 500 million euros, for consumer subsidy support, through public service compensation (YKO) surcharges included in electricity bills.

According to energy minister Kostas Skrekas, the new mechanism will operate as a prospective reserve Energy Transition Fund and will be used should energy prices rise further to help fund consumer support initiatives.

“With this risk hedging tool, we are shielding and protecting the people of Greece from any future painful energy crises,” the minister noted.

Under the plan, public service compensation surcharges for three existing household consumption categories will be set at one level. As a result, public service compensation charges for households consuming up to 1,600 KWh per four-month period will be increased by 1.01 cent, from the existing level of 0.69 cents to 1.7 cents.

This means that public service compensation charges for households consuming greater amounts will actually be reduced as current YKO rates for consumption levels of between 1,601 and 2000 KWh per four-month period are 5 cents per KWh and 8.5 cents per KWh for consumption levels of over 2,000 KWh per four-month period.

Households consuming up to 1,600 KWh per four-month period should expect to pay additional public service compensation charges of 4 euros per month.

 

 

September electricity subsidies to be doubled to nearly €2bn

The government intends to absorb the greatest part of electricity price increases for September through subsidies expected to reach nearly two billion euros for the month, a support package seen subduing retail tariffs at 0.15 euro per KWh, the level of retail electricity prices in August.

This latest monthly subsidy amount is nearly double the 1.136 billion euros the government needed to commit for August to fight escalating energy costs.

Electricity retailers announced higher tariffs for September a couple of days ago, but the latest subsidies are expected to keep prices virtually unchanged for household consumers. The cost of electricity for businesses, however, is seen doubling next month.

Electricity subsidies for September will need to increase sharply to a level of 0.60 euro per KWh, up from 0.337 euro per KWh in August, a 70 percent increase.

Approximately 900 million euros of the government’s two billion-euro subsidy package for September will be covered through the state budget, while the other 1.1 billion euros will hail from the Energy Transition Fund, which gathers CO2 emission right auction revenues, RES special account surpluses and windfall profit taxes imposed on electricity producers.

Power suppliers given until August 8 to revise misleading advertising

RAE, the Regulatory Authority for Energy, has given three electricity suppliers until August 8 to revise their commercial policies after they were found to be presenting state electricity subsidies as discounts of their own in advertising campaigns.

Details of the three electricity suppliers, not disclosed, will be posted on the authority’s website on August 9 at 11 am if they miss the deadline to revise their commercial policies and fail to inform RAE of the reasoning behind their changes, RAE has announced.

 

Athens among 4 European cities with July price cuts

Household electricity prices in Athens fell by 7 percent in July, month to month, making the Greek capital one of just four European cities to register price reductions last month, a latest monthly survey conducted by HEPI, the Household Energy Price Index, has shown.

Retail electricity prices in Athens dropped to 0.218 euros per KWh, below the European average of 0.284 euros per KWh and slightly above the average retail electricity price for 33 cities included in the study, which ended July at 0.217 euros.

Athens was ranked 21st among the HEPI survey’s 33 participating cities in terms of retail electricity cost.

The Greek government’s electricity subsidy program for June and July exceeded 730 million euros per month and will cost over 1.1 billion euros for August.

Besides Athens, three other European cities experienced retail electricity price reductions in July: Vienna (-20%); Madrid (-12%); and Rome (-10%).

Europe’s highest retail electricity prices were recorded in London (0.630 euros per KWh); Copenhagen (0.530 euros per KWh); Rome (0.459 euros per KWh); Amsterdam (0.419 euros per KWh) and Prague (0.409 euros per KWh).

July’s biggest retail electricity price increases in Europe, according to the HEPI survey, were registered by: Vilnius (44%); Amsterdam (37%); London (25%); and Sofia (24%).

Fixed charge cap of 5 euros, over €500m raised in July for subsidies

The government has decided to implement a five-euro cap on fixed charges in electricity bills, energy minister Kostas Skrekas has told parliament.

It is the latest in a series of energy-crisis measures introduced by the government and comes after electricity suppliers opted to increase their fixed charges as a means of keeping their tariffs – the competitive aspect of electricity bills – as low as possible.

A new market mechanism’s revenues generated for the Energy Transition Fund, supporting the government’s electricity subsidies initiative, reached over 330 million euros in the first half of the month and could exceed 500 million euros by the end of the month, the minister told parliament. This sum nearly covers the monthly cost for subsidies.

The energy crisis, brought about by pandemic-induced market abnormalities, has been exacerbated by Russia’s war on Ukraine, which the minister described as “catastrophic, causing thousands of deaths, many of the victims being unarmed civilians, and beyond that, an enormous energy crisis that is feeding economic and inflationary crises, which we hope does not also lead to a food crisis.”

Power prices for August set at near 50 cents/KWh, over 1 billion Euros in subsidies to cover 90% of the rise

(upd: 12:00) PPC announced its new electricity bill at 0.486 euros/MWh, while other suppliers set their own bills higher.

The minister, Kostas Skrekas, announced that subsidies for energy consumers are going to reach 1.13 billion Euros in August. The goal is to cover up to 90% of the price increase for households, through subsidizing the price with 337 euros/MWh.

Earlier, energypress wrote: 

The country’s electricity suppliers are expected to announce today their respective electricity prices for August, power utility PPC’s price level expected to be slightly below 50 cents per KWh and those of all other players slightly above this level, which, in some cases, could exceed 60 cents per KWh, sources have informed.

Suppliers are expected to post their price levels for August on their company websites from 11am onwards. Suppliers had initially been given a 9am deadline but were then offered a two-hour extension to establish greater clarity on the day’s gas prices at the Dutch TTF index.

The level of the government’s electricity subsidies, expected to be announced imminently, is a crucial factor as it will determine the eventual prices to be paid by consumers.

The government has announced it intends to offer subsidies that will lower electricity prices for consumers to pre-crisis levels of around 20 cents per KWh, meaning subsidies are likely to be worth approximately 30 cents per KWh.

Based on new market rules, suppliers must announce, on a monthly basis, their prices for the next month by the 20th day of the preceding month.

 

August pressure for energy retailers, covering subsidies

Electricity and gas retailers fear even tougher financial times in August as the government’s increasing levels of energy subsidy support offered to consumers to offset rising wholesale energy prices and keep energy bills serviceable will force suppliers to use greater amounts of company capital for the effort, company officials have told energypress.

Energy suppliers need to commit company capital for customer subsidies in accordance with subsidy support packages announced by the energy ministry before they are reimbursed about a month later via the Energy Transition Fund, once DAPEEP, the RES market operator, has cleared related amounts.

The one-month period elapsing from the time suppliers cover subsidies, at their own cost, to their eventual reimbursement is pushing suppliers to their financial limits.

It should be pointed out, energy suppliers have yet to be reimbursed for subsidies they paid for in June, concerning consumption in May.

Tourism boom revenue will help fund winter’s energy subsidies

The Greek tourism industry’s strong revenue figures being generated this summer, which could exceed those of the record-breaking summer of 2019 if July’s heightened activity is sustained through August, will prove invaluable in financing energy subsidies needed in coming months.

At the current rate, Greece’s tourism industry could contribute between 19 and 20 billion euros to the budget, well over the budget forecast of 16 to 17 billion euros.

International authorities, including Fatih Birol, executive director of the International Energy Agency, are warning of even tougher times ahead.

European countries greatly dependent on Russian natural gas are scrambling for solutions ahead of next winter. Germany is seeking nuclear-energy assistance from France. Chancellor Olaf Scholtz has reiterated energy prices will remain high for some time yet. Italian energy company Enel has warned customers that it cannot guarantee gas and electricity prices will continue to be offered under current agreements.

Latest calculations indicate that Greece’s electricity bill subsidies for households and businesses could soon exceed one billion euros per month.

The country’s electricity subsidy cost for August is expected to greatly exceed July’s figure of 722 million euros, which was based on a cost of 240 euros per MWh, now over 300 euros per MWh.

 

August electricity prices could reach 50 cents per KWh

Electricity suppliers are set to announce their tariff rates this Sunday, price levels expected to reach as high as 50 cents per KWh, which would demand consumer subsidy support worth over one billion euros for the month to keep electricity bill costs serviceable at a cost of approximately 15 cents per KWh for households and 16 to 17 cents per KWh for businesses, the government’s objectives.

According to some estimates, monthly Energy Transition Fund sums needed for the government’s support package could reach closed to 1.5 billion euros.

TTF natural gas contracts for August are at a level of 165 euros per MWh and are not expected to deescalate easily. Energy exchange prices have skyrocketed to levels of between 340 and 370 euros per MWh.

Such price levels are expected to force electricity suppliers to announce retail prices of 50 cents per KWh for August this coming Sunday, exorbitantly high considering June and July levels were at about 35 cents per KWh without subsidies.

 

July power subsidies 20 cents per KWh for all households

Electricity bill amounts for all households will be subsidized at a rate of 20 cents per KWh for consumption in July, without any upper limits and regardless of income levels, energy minister Kostas Skrekas has announced.

The total value of the government’s subsidy package for July is expected to reach 722 million euros, a 300 million-euro increase compared to June.

Besides the universal amount to be offered to all households, July’s electricity consumption for low-income households eligible for social support will be subsidized 240 euros per MWh, a rate fully absorbing the month-to-month increase.

In addition, electricity consumption concerning businesses with 35-kVA connections will be subsidized at a rate of 192 euros per MWh, while all other businesses and industries will be supported with subsidies worth 148 euros per MWh for July.

Furthermore, natural gas subsidies for industrial consumers will be subsidized at a rate of 30 euros per thermal MWh, according to the government’s support package.

Commenting on the government’s energy-security plan should Russian gas supply to Greece be disrupted, Skrekas, the energy minister, noted that the capacity of the Revythoussa LNG terminal on the islet just off Athens will be doubled with the installation of an FSU, expected to be ready to operate by the end of this month.

LNG imports will be increased, the minister noted, adding that power utility PPC’s new lignite-fired power station Ptolemaida V will be ready to operate in September. This facility will convert to gas later on. Also, five diesel-fueled units are ready to be used, if necessary, the minister informed.

New electricity market model launched, PPC role pivotal

A new model for the country’s electricity market, intended to contain soaring prices brought about by the energy crisis, comes into effect today with the introduction, as a first step, of price caps in the wholesale market, setting remuneration upper limits for electricity producers of all categories.

A ministerial decision expected imminently, possibly today, will set upper limits of 112 euros per MWh for hydropower facilities, 85 euros per MWh for renewables, 253.98 euros per MWh for natural gas-fueled power stations and 206.71 euros per MWh for lignite-fired power stations. These limits will remain valid for the first one-month period, starting today.

Any discrepancy between these upper limits and the average price of the day-ahead market will be transferred to the Energy Transition Fund for subsidy support.

The government hopes its plan will subdue electricity prices to levels of between 20 and 30 percent higher than last summer.

Calculations for a finalized electricity price per KWh, following the deduction of subsidies, will be based on state-controlled power utility PPC’s new price list. The government, guided by the utility’s new price list, will set a single price for all suppliers. The level at which PPC will set the bar remains to be seen. The company’s market dominance will set a standard for the entire market.

Though not yet confirmed, it is believed PPC will announce, by July 10, a nominal price of between 460 and 490 euros per MWh, meaning 46-49 cents per KWh.

PPC and all other players are abandoning a 30 percent discount offered to customers. PPC’s subsidies for hydropower and lignite units will now end up with the State, which is assuming the discount-policy role.

Gov’t aims to increase subsidy support to €450m per month

The government will seek to increase the value of its electricity subsidies to 450 million euros a month with the aim of lowering electricity prices for consumers to pre-crisis levels, when they were as low as 17 cents per KWh, roughly half the current levels of 30 to 35 cents per KWh, sources have informed.

The plan will begin taking shape as of July 1, when the government introduces price caps for electricity producers, whose windfall profits will be taxed to help fund the energy-crisis battle.

The overall effort will require government officials to be vigilant for fiscal leeway as figures in this domain can fluctuate from day to day.

Government officials have estimated that revenue from the EU’s Emissions Trading System could reach an annual sum of between 3.5 and 4 billion euros. This, however, will not suffice to fully cover the administration’s energy-crisis plan, meaning the government will also seek to utilize state budget money and all available EU support programs.

There is some concern about the government’s calculations for the second half of the year as they are based on the assumption of wholesale electricity price levels at 225 euros per MWh. However, the ongoing tension between the West and Russia over its invasion of Ukraine has driven wholesale electricity prices even higher, currently at 306 euros per MWh.

Gas conversion cost support key to further penetration of energy source

The government plans to soon launch a subsidy program offering households incentive to connect with natural gas networks, though coverage of conversion costs, Adonis Georgiadis, the minister for development and investment, has told an event staged by gas distributor Hengas in Kalamata.

The subsidy program will encourage a greater number of consumers, especially households, to make the switch to natural gas, Hengas officials pointed out to energypress.

According to Hengas’ business plan, entailing the development of natural gas networks and stations to cover 11 provincial cities around Greece, the Peloponnese cities of Kalamata and Sparta will be supplied compressed natural gas (CNG) by the first quarter of 2023.

Megalopoli, Tripoli and Corinth have been connected to the gas network ahead of schedule, Hengas has reported.

Hengas’ development plan, budgeted at 65 million euros and approved by RAE, the Regulator Authority for Energy, entails the development of natural gas networks and stations covering a total of 11 provincial cities – Tripoli, Corinth, Megalopoli, Edessa, Polykastro, Polygyros, Deskati, Naousa, Skydra, Kalamata and Sparti – either through direct connections with the country’s gas grid or CNG and LNG transportation.

Greece seeks over €3bn from new EU climate-change fund

The Greek government is seeking more than three billion euros from the EU’s new climate-change fund, roughly the cost of measures designed to reduce the cost of power bills, for its electricity subsidies program.

The distribution plan for the new climate-change fund, approved in European parliament last week, is expected to offer Greece 5.5 percent of its 57 billion-euro starting sum.

Distribution details are still being negotiated by the EU’s 27 member states. Environment ministers will meet in Luxembourg today.

The new EU fund is expected to gradually grow through contributions raised by an extension of the carbon tax system (ETS II), planned to also cover buildings and transportation. The rise in fuel prices is expected to contribute many billions of euros in extra revenues to the climate-change fund.

The plan to extend the carbon tax system (ETS II) into transportation has prompted a strong reaction from the sector, representatives fearing additional costs without incentives for a shift away from fossil-fuel usage.